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Virginians’ Incomes May Be Rising, But Dramatic Gaps Between Richer And Poorer Continue To Widen

Dec. 22, 1999 -- Virginians’ incomes have shown a healthy recent increase, even after adjusting for inflation. This is the third consecutive year of gains in real income, according to a new study from the University of Virginia’s Weldon Cooper Center for Public Service.

Furthermore, the income gap between richer and poorer Virginians continues to show a dramatic increase, and incomes in many central cities and rural areas are staying well behind suburban incomes, according to the report by economists John L. Knapp and Stephen C. Kulp.

The report -- "Virginia Adjusted Gross Income, 1997" -- is published on the World Wide Web in the inaugural edition of an electronic publication, Research Notes, which can be accessed at www.virginia.edu/coopercenter/vastat/RNpubs.html

The study analyzes adjusted gross income (AGI) reported on Virginia tax returns for 1997, the most recent data available.

In 1997 the state median AGI for married couples was $48,087. This represents a 5.7 percent gain over the previous year, or after adjusting for inflation, a 3.4 percent gain. This was the third year of gains in real income. The 1997 figure was slightly below real income in the record year of 1988. According to Knapp and Kulp, if the series could have been adjusted for tax law changes, it is likely that the 1997 figure would have set a new record.

Median income for married couples is roughly equivalent to median family income. But, unlike census income data, it reflects capital gains from the recent runup in the stock market, the authors said. The median is the level at which half reported more income and half reported less.

The five localities with the highest median AGI for married couples were all located in Northern Virginia and all had incomes far above the state as a whole.

They are:

Fairfax County, $75,982
Falls Church, $75,474
Loudoun County, $74,376
Arlington County, $66,347
Prince William County, $62,541

The bottom five localities were in isolated rural areas of western or coastal Virginia.
They are:

Grayson County, $28,020
Northampton County, $27,773
Dickenson County, $26,770
Highland County, $26, 824
Lee County, $25,058

Roughly three out of ten returns in those localities showed incomes of less than $15,000, a figure below the federal poverty level for a family of four, Knapp and Kulp said.

The study shows the very large concentration of income in Northern Virginia. In 1992 the area accounted for 36 cents out of every dollar of Virginia AGI. By 1997, the area’s share had risen to 38 cents.

Income inequality "has increased dramatically" in the state, the economists said. An index of income concentration that reflects inequality rose steeply in 1997 for the third consecutive year and has been rising for two decades.

Factors include a growing number of single family households, a growing disparity based on education levels, and generally low wages in service jobs, the authors said. The booming stock market has resulted in large gains for many upper income households and added to the growing gap, they pointed out.

The index rose most rapidly in Albemarle County in central Virginia. Goochland County near Richmond showed the highest inequality.

For additional information or interviews John Knapp or Stephen Kulp may be reached at (804) 982-5604. The full report is available at www.virginia.edu/coopercenter/vastat/RNpubs.html.

Contact: Bob Brickhouse, (804) 924-6856

FOR ADDITIONAL INFORMATION: please contact the Office of University Relations at (804) 924-7116. Television reporters should contact the TV News Office at (804) 924-7550.
SOURCE: U.Va. News Services

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