Washington, DC elites prosper amid America’s rising income inequality

Comparing the Divide: Income dictates access to health care in the capital cities of Russia and the United States, where lawmakers debate policy mere miles from some of the country’s most underserved communities. Russia’s Gini coefficient, at 0.420, is actually better than that of Washington, D.C. at 0.435.

WASHINGTON — Two blocks from Capitol Hill, on the day after Congress passed the first significant tax increase on the wealthy in 20 years, Herbert, 63, who parks cars for a living, sits in the waiting room of a doctor’s office.

He pegs his level of concern over the Capitol’s looming spending battles, in which Democrats and Republicans will face off over cuts to the nation’s social safety net, at about a four out of 10.

He says he’s in good spirits and good health today, a small miracle for a man addicted to heroin and living in a homeless shelter with a history of considerable health problems.

Herbert, who asked that his last name not be used because he did not want to lose his job, receives free access to care provided by the city. It’s been available to him, he said, since he’s decided to start taking care of himself. His visit to the doctor on this day is for lower back pain, and he’s thankful to have some coverage.

Herbert’s valet work is for a company that services private events, and he’s parked cars for the likes of Bill Clinton and Donald Rumsfeld. It’s a busy weekend on the party circuit with President Obama’s inauguration. The people at these parties, D.C.’s wealthy, have prospered even as the nation as a whole has not. But Herbert doesn’t resent his clients’ wealth — far from it.

Herbert’s something of a stoic. He says he embraces the lot given him by God — “We park the cars,” he says. “You go and have a party.”

In the capital of a nation increasingly divided by both class and politics, Herbert’s story offers something of a litmus test.

To liberals, Herbert’s a man whose chemical dependency problem has been criminalized by the federal government and who, despite holding down a steady job, cannot escape homelessness. Two blocks from where he seeks health care from a medical center in the basement of the nation’s largest homeless shelter, the House of Representatives has put the country through considerable anxiety to protect tax breaks for people earning $300,000.

To staunch conservatives, Herbert’s a black drug addict unable to wean himself from the welfare state. Rush Limbaugh would have loved to hear that Herbert had the nerve to ask for Viagra from the government-funded clinic because life in an all-male shelter has taken a toll on the time for intimacy in his marriage.

Washington is a one-horse town, as they say, and just about everything is viewed through the prism of partisan politics. Health care is a lightning-rod issue and one that starkly defines how income inequality has created a society in which the wealthy have the resources for “valet” services that provide them full access to a nation with the greatest medical care in the world.

But the poorest are often in peril in a system that may help them scrape by with free clinics like the one Herbert attends, but leaves many in the rungs just above them, the working poor, uncovered and vulnerable.

But Washington, D.C. doesn’t just serve as a prime example of rising inequality. It drives much of it.

Indeed, there is a broad consensus among liberal and conservative economists that government policy — specifically a tax structure that favors the wealthiest Americans — has been a determinant factor in rising income inequality in America.

That machinery, fueled by powerful lobbyists who ensure that these tax breaks remain in place, is what has driven inequality through at least five successive presidencies, Democrats and Republicans, and earned America’s ranking as one of the worst for income inequality among the top, 34 developed countries, according to a 2011 report by the Organization for Economic Cooperation and Development.

First in War, First in Peace, Last in Equality

Washington’s poor are some of the sickest people in the country, and their lives among the shortest. Washington’s affluent, meanwhile, enjoy not only a good deal of power but also some of the longest lives of any group in the country. The state of affairs in the capital illustrates the real upshot of what’s at stake in America’s growing class divide: how long you live — and how well.

And when it comes to rich and poor in D.C., the difference is black and white. Washington’s racial divide by-and-large corresponds to its class divide, which is wide. At 27 percent, the poverty rate for blacks in D.C. is more than three times that of whites, mirroring national data on the discrepancy between the percentage of poor blacks versus poor whites.

The decisive marker of this divide is life expectancy. Blacks in Washington have a life expectancy of 71 years. Whites, mostly educated professionals, have a life expectancy of 83 years. The district’s blacks live shorter lives than blacks in any state while its whites live longer lives than whites in any state.

Washington’s Gini coefficient — a single measure that provides a snapshot of income inequality — is nearly the same as Russia’s, where over the last two decades an ideology obsessed with eliminating class has given way to the realities of crony capitalism in which the wealthy and the politically connected are provided for and the poor seem as vulnerable in Moscow as they do in Washington. In Russia, economists and political observers say a mutated health care system that survived the now-collapsed Soviet system reflects a growing inequality that is pulling apart a nation for whom the Communist slogans of equality ring as hollow as the capitalist assurances that a free market system will be the best way to provide for all.

Das Kapital

Unlike Herbert, Jim Abdo does have a home — and he’s built many more. A housing developer, he’s seen his own fortunes, and a real estate empire, rise with those of D.C.’s affluent class. His personal residence is in Washington’s wealthy Northwest quadrant.

Since its 1996 founding, his company has developed over 30 luxury condo and apartment properties and, Abdo estimates, seen “well over 1000 percent growth.”

His developments — “Ultimate Urban Condos” and “Deluxe Apartment Rentals” — cater to the professionals who, thanks in large part to high-end projects like Abdo’s, have been flocking back to D.C.’s urban core. Abdo’s known for restoring historic buildings, often in once-dilapidated neighborhoods, though demand is so strong that he also creates large new developments from the ground up.

Abdo says the renters and buyers his properties are designed for — “CFOs, COOs, partners in law firms”— value his attention to detail. “We create very dramatic living spaces,” he says.

Americans love few things more than blaming their problems on Washington, and in the case of inequality they’d be half-right.

The benefits of the last 30-odd years of technological advance have accrued almost entirely to the wealthy. Advances in computation, automation, and communications have allowed America’s skilled workers to create ever-more valuable output. At the same time, they’ve nearly eliminated a solidly middle-class category of clerical jobs. This is not the fault of the federal government.

But another important factor in the divide is the neoliberal philosophy that has held great sway in the capital since the 1980s.

Beginning with Ronald Reagan and running through to Barack Obama, successive administrations have consistently liberalized trade, creating economic growth but also making it easier to outsource manufacturing and other middle-class jobs.

Both parties also embraced financial deregulation, spurring growth in a sector where salaries are clustered at the top and fostering the conditions for a financial crash and recession that have hit the bottom and middle the hardest.

Over the same period, the federal tax code became easier on the rich, a trend reversed in part by Congress just this month by a last-minute fiscal cliff deal.

The net result: Between 1979 and 2007, the average income of the top 1 percent of households increased by 245 percent, while rising just 11 percent for the bottom fifth of households and 19 percent for the middle fifth, according to the non-partisan Economic Policy Institute.

A Tale of Two Cities

In D.C., the wealthy not only benefit from national trends they’ve helped create, they benefit locally as well.

Abdo credits D.C.’s thriving housing market, and the vibrancy it’s brought to much of the city, to improved municipal leadership and to people like himself “who took a chance on the District.”

But he also has government privatization to thank. Over the past 20 years, it has fueled the creation of wealth in D.C. in a big way. The amount of federal procurement spending going to private firms in the area has quadrupled since 1990 and reached $80 billion in 2011, Reuters reported last month.

Because of this outflow of public largesse to private companies, Washington has the highest concentration of America’s fastest-growing companies of any major metropolitan area in the U.S., according to a recent study by the Kauffman Foundation, which notes that half of those companies are in government services.

Unemployment in the Washington area is 5.3 percent, well below the national average of 7.9 percent, according to Department of Labor statistics.

Abdo says the trend has benefitted him by unshackling the local economy from the federal government’s pay scale and attracting “the best and the brightest.”

On the strength of the local economy, he’s more than recovered from the national housing bust. “We’re as busy as we’ve ever been right now,” he says.

Abdo Developments is hard at work on a million square foot project at Catholic University and a city block-sized condominium development just over the Potomac in Virginia — Abdo believes it’s the first such project of its scale in the mid-Atlantic since the housing market collapse.

The developments, and they aren’t just Abdo’s, keep going up here because the federal government insulates the region’s economy from the economic shocks felt elsewhere.

"This is an area that’s pretty resilient,” he says.

This is why D.C.’s own peculiar class of wealthy professionals has also fared extremely well through the economic downturn. At the turn of the last millennium, lobbying the federal government was a $1.5 billion industry, according to data from the Center for Responsive Politics. It’s now a $3.5 billion industry.

A stone’s throw from Anacostia, center of an AIDS epidemic that leaves D.C. with a higher rate of HIV infection that most African nations, lobbyists spend this money to influence hundreds of billions of dollars in federal health spending. Most of them go home at night to D.C.’s suburbs, which contain America’s three wealthiest counties and seven of the top 10.

Health is in fact the single biggest category of lobbying. It accounted for half a billion dollars in 2011. The health lobby’s clients are pharmaceutical companies, hospitals, professional associations, HMOs, and insurers.

Lobbying on behalf of the residents of D.C.’s Ward 8, the city’s poorest and home to Anacostia, is not big business. Here, unemployment hovers above 20 percent. At one point in 2011, Ward 8 had higher unemployment — 25.1 percent — than any metropolitan area in the country of comparable size.

“The lobbying dollars are just not there for our population,” says Vincent Keane, the CEO of Unity Health Care, the nonprofit charged with caring for D.C.’s poor regardless of their ability to pay. Seventy-nine percent of Unity’s patients are black and 76 percent live at or below the poverty line. The majority rely on Medicaid and one in five are uninsured.

“We certainly can’t compete with the big boys,” Keane says. And so the balance sheets of the insurers and the pharmaceutical companies remain healthier than Unity’s patients.

Not that this is all bad news for Herbert. He’s kept his job since 2003, through an economic downturn that hasn’t done much to blunt the capital’s appetite for private parties. The money in politics means more fundraisers. He recalls one he worked in Georgetown for D.C.’s last mayor, Adrian Fenty, as especially glamorous.

Herbert takes pride in taking care of partygoers’ Lamborghinis, but he also notes the difficulty of making it to work, doctor appointments, and weekly meetings of Alcoholics Anonymous, Narcotics Anonymous and Cocaine Anonymous without a car of his own. “It makes the timing thing rough,” he says.

Obstacles to Health

If you’re sick in Washington, D.C., treatment is available — it’s the making use of it that presents a problem. The city provides free health insurance to people making up to 200 percent of the poverty level, no questions asked. There’s a public hospital, and Unity serves patients in all eight wards — including at nine homeless shelters and in two jails.

It’s Unity that runs the clinic under the Center for Creative Non-Violence homeless shelter where Herbert has come to see a doctor.

The room Herbert waits in looks much like those found in doctors’ offices anywhere in Washington — a notice about patient confidentiality and a poster explaining sanitary food preparation on the walls, a television in the corner playing health and safety messages — except for a prominent sign warning, in capital letters, “DRUG USE IN THIS AREA WILL IMMEDIATELY BE REPORTED TO POLICE.”

Last year Herbert overdosed on heroin and received treatment at D.C.’s only city-run hospital. Thanks to free testing, Herbert knows he’s HIV negative — at one point, he reaches into his pocket and displays a handful of free condoms in candy-colored wrappers. He recently had a CAT scan of his liver performed at the George Washington University Medical Center and found out he does not have hepatitis C.

But today he might not get the treatment he’s seeking for his back. Unity’s staffers know their patients are savvy about obtaining painkillers, which they then re-sell on the street for ready cash. Playing cat-and-mouse over oxycontin prescriptions can strain doctor-patient relationships.

It’s not the only challenge of practicing medicine underneath a 1350-bed homeless shelter. Bill Harpster, a former army surgeon who has been practicing with Unity for 16 years, names another one: flooding. Disgruntled residents of the homeless shelter upstairs occasionally sabotage the toilets, flooding the health center below. At one point, the center was finding itself underwater about twice a month. The flooding forces Unity to divert patients to other centers and call in a mobile care unit.

Despite such obstacles, Harpster says D.C. does a good job providing health care to the poor.

But though care is here, D.C.’s poorest still face obstacles in accessing it that might not even occur to residents of Georgetown. Many who are eligible for free government insurance remain uninsured because they don’t know about their options, they don’t trust government, or they simply lack identification.

Herbert is not the only one who finds transportation to appointments to be an obstacle. Relying on transit is more difficult if you work an inflexible shift for an hourly wage, or if your shelter imposes strict curfews. So Unity offers patients transportation to appointments. But, as one Unity administrator points out, just going outside is difficult if you don’t own shoes.

So Harpster gets a lot of no-shows. “It does make the schedule chaotic sometimes,” he says, “but their lives are chaotic.”

Harpster’s patients are very sick — he estimates one in five are HIV positive — and managing serious medical conditions can be near impossible amidst such chaos. “If you have diabetes and hypertension and HIV, you have to take 15 medications a day,” he says. “I couldn’t do it.”

A lobbyist on K Street, with a stable family life and a new BMW, would be much better equipped to access and manage treatments for these conditions, but this is largely a moot point. Not many K Street lobbyists have diabetes, hypertension and AIDS.

Chronic Disease

Regardless of access to treatment, Washington’s poor residents suffer from chronic conditions at a far greater rate than its rich residents.

Though at-risk groups like gay men and white intravenous drug user have turned the tide on HIV, it remains a public health catastrophe for the city’s poorest blacks.

And in nearby Montgomery County, Maryland, where many D.C. residents pushed out by rising rents have relocated, blacks visit emergency rooms for both diabetes and hypertension at three times the rate of whites, and they visit for asthma at more than four times the rate.

Obesity is a major risk factor for all three conditions. In Washington, only 8 percent of white residents are obese, compared 31 percent of black residents. In this, too, D.C. leads the nation in disparity.

These vast gulfs are not explained just by different health care systems — but different ways of living.

Parallel Societies

Abdo, 53, says he and his family enjoy a healthy and active lifestyle — “Doing as well as I am, I could live anywhere and get great health care.” He’s covered by Blue Cross, Blue Shield through his company plan and says he’s avoided serious health issues.

Abdo’s family enjoys biking, and he notes that his wife runs marathons.

The affluent clientele his properties cater to demand the amenities that allow them to live the same type of lifestyle.

“It was a tougher sell in the mid-90s as the city was not going through what it has in the last 10 years,” he says. “There weren’t the Whole Foods in the neighborhoods, there weren’t all the yoga studios”

And if you want to understand the roots of D.C.’s gross health disparities, a yoga studio is a good place to start.

In parts of Georgetown and Glover Parker, where health activist Sariane Leigh once taught yoga and pilates, there are four to a block. But when Leigh began teaching yoga in 2009 in the impoverished neighborhood of Anacostia, she was the only show in town. She still found herself unable to draw customers.

“The first person who showed up on one of my first days of classes was a white girl,” she recalls with a laugh. “I was like, ‘this is not for you!’”

Leigh says the black women east of the Anacostia River don’t value their health the way her clients in Georgetown do. They may spiritually recharge by going to church, or pamper themselves with a haircut or new purse, but devoting time to the health of their bodies is not a part of their lifestyle.

Abdo recognizes the District’s disparities in health care — “Unfortunately, the quality of it depends on income” — But he also remains upbeat about the city where he builds housing. “The opportunities to be active and stay healthy are abundant here, he says.”

For for his part, Abdo recommends early childhood education as a remedy to the lifestyle differences that afflict D.C.’s poor.

“We’re dealing pretty much with social determinants of health that are way beyond the capacity of health centers or one entity to resolve,” says Keane, Unity’s CEO, of the herculean task facing the nonprofit.

Thus its initiatives — like free transportation to appointments and education about healthy eating —aim to widen the services offered in support of well-being.

But the net can only be stretched so far. The doctors at Unity’s clinics can’t open grocery stores, or guarantee employment, or build new schools and run the health classes. Leigh can offer yoga classes, but she cannot force anyone to take them. These, and a thousand other things, are part of the real health care system supporting Washington’s affluent class. As long as they exist only west of the Anacostia River, D.C. will remain a city divided by health in a country it’s helped divide by class. And that’s bad news for the capital’s poorest.

Not that Herbert’s complaining. He does what he can to take care of himself but feels that what happens to him, like what happens in Congress, is ultimately out of his control. In the most powerful city on Earth, Herbert embraces his powerlessness, and leaves his health in the hands of God.

“I’m happy,” he says. “We go through life as He writes it.” 

This story is presented by The GroundTruth Project.