How Inequality Hurts

Why Some No Longer Sing the Beltway Blues

How do unequal societies solve the problems — like traffic congestion — that make us miserable? They come up with solutions that make life easier for rich people.

By Sam Pizzigati

The Washington, D.C. region has more traffic congestion than any other U.S. metro area — and a wider gap between affluent and poor than any state.

Politicians and bureaucrats “inside the Beltway” that circles Washington, D.C., pundits like to prattle, simply do not understand the challenges of daily life that average Americans face “outside the Beltway.”

But here’s something the pundits have yet to realize: If you really want to understand everyday life in a deeply unequal society like the United States, the best place to look may now be on the Beltway.

Right there on the asphalt concrete, anyone who bothers to look can see all the tensions and frustrations that define daily life in an America ever more divided between a prospering rich and a shrinking, struggling middle class.

The highway officials who run the Beltway stretch that winds through Northern Virginia have just opened up the nation’s latest set of “Lexus lanes.” For a stiff fee, affluent motorists can now zip around the Beltway in “express toll lanes” while their less affluent fellow motorists sit stalled in rush-hour traffic jams.

The Washington area has become substantially more unequal since the early 1980s

And those fellow motorists do a lot of stalling. The Washington region has more traffic congestion than any other major metro area in the entire United States. In 2010, the latest national Urban Mobility Report details, commuters in the D.C. area lost an incredible 74 hours to traffic jams. In 1982, by contrast, Washington area commuters lost just 20 hours to slow traffic.

Something else fundamental — besides traffic — has changed around Washington since 1982. The area has become substantially more unequal.

The national capital region used to be a middle class haven, a place where average Americans, the Washington Post recalls, could take home “modest but steady paychecks” as federal employees.

But a string of White House initiatives, starting under Bill Clinton and accelerating in the Bush years, have outsourced a heavy share of federal jobs to private contractors. The dollars that the federal government is funneling to these contractors in the Washington area have, overall, quadrupled since 1990.

For average workers, this sea-change in federal employment practice has meant less secure employment and smaller paychecks. For Washington’s “growing upper class of federal contractors, lobbyists, and lawyers,” notes a recent Reuters analysis, this switch has brought a steady gusher of windfalls.

Two decades ago, a family had to be making $368,000, after adjusting for inflation, to enter the Washington region’s most affluent 1 percent. Top 1 percent status in the region today doesn’t kick in until a household is making $527,000.

In 2011, the top 5 percent of households in the D.C. region took home 54 times more income than households in the poorest 20 percent. No state in the entire nation has a wider top-to-bottom gap.

Economists see some powerful links between high levels of inequality and traffic congestion

Economists see some powerful links between levels of inequality this high and traffic congestion. The more wealth concentrates, they explain, the more speculative the housing market becomes. In deeply unequal regions, the wealthy bid up the price of the choicest real estate, and that forces cash-squeezed middle-class families to move further out to find decent housing.

The further away people live from their work, the more traffic on the roads. Those American counties where commuting times have increased the most, Cornell economist Robert Frank points out, just happen to be those counties “with the largest increases in inequality.”

How should we respond to all this congested commuting? Americans have traditionally battled traffic jams by building new roads and bridges, with the dollars for this construction coming primarily out of taxes on gasoline.

But state gas taxes in the United States, on average, haven’t increased in a decade. In 14 states, gas taxes haven’t increased in 20 years. In Virginia, the gas tax hasn’t nudged up in 25 years.

Highway officials, denied adequate gas tax revenues, have had to hunt for alternative solutions. Enter “Lexus lanes.” A dozen metro areas, USA Today reports, now have highways that “charge cars rising tolls as traffic increases.”

The constant goal: keep the traffic in Lexus lanes moving at a fast clip. If too many people start using the lanes and traffic slows, the tolls rise — and don’t start sinking until the car volume drops enough to get traffic moving again.

Tolls from the Beltway’s new Lexus lanes should be enough to keep the CEOs of the private firms that operate the lanes in considerable clover.

Toll fees on the new Washington Beltway Lexus lanes have no cap. In really bad traffic, officials acknowledge, tolls might jump to $1.25 per mile. For a 28-mile round-trip on the Beltway Lexus lanes, a motorist could face a toll over $20.

Some motorists — like the top execs at Fluor, the Fortune 500 construction giant — won’t have any trouble affording fares that rise that high. Fluor teamed with Transurban, another private company, and the Virginia Department of Transportation to build the Beltway Lexus lanes.

In exchange for its investment in this construction, the Fluor-Transurban consortium will now get all the toll revenue the Beltway Lexus lanes generate over the next 75 years.

That should be enough to keep the CEOs of Fluor in considerable clover. The current CEO, David Seaton, made $6.75 million in 2011. The five top execs at Fluor took in $23.4 million in 2011, up from $22.7 million in 2010.

A real solution to the Washington metro area’s chronic road congestion would, of course, bring public transportation into the mix. Interestingly, a project to expand the Maryland side of the D.C. area’s subway system with light-rail has been floating around for years — but still can’t find the funding to start.

This inaction in Maryland reflects a broader national trend. U.S. investments in infrastructure have fallen off dramatically, from 3.3 percent of the nation’s gross domestic product in 1968 to 1.3 percent of GDP in 2011, a long-term decline that began at almost exactly the same time as inequality in America started rising.

Researchers see no coincidence here. The U.S. states where the rich have gained the most at the expense of the middle class turn out to be the states that invest the least in infrastructure.

One explanation: Middle class people, a 2012 Center for American Progress report points out, have a vested interest in infrastructure investment. They depend on good public roads, schools, and transit.

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Wealthy people don’t. If public services frazzle, they can opt out to private alternatives. And the more wealth concentrates, the more political leaders will tilt toward the wealthy — and deny public services the funds they need to thrive.

And so, in an ever more unequal United States, we get more Lexus lanes. For the affluent, the lanes make for an ideal solution. The wealthy get speedy, tension-free commutes — at a cost they find negligible.

The rest of us do get something out of the deal. We get a reminder, as we sit and stew in horrific traffic, why inequality as deep as ours simply makes no sense.

Veteran labor journalist Sam Pizzigati, an Institute for Policy Studies associate fellow, writes widely about inequality. His latest book, The Rich Don’t Always Win: The Forgotten Triumph over Plutocracy that Created the American Middle Class, has just been published.

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