ANALYSIS: Falls Church NOT That Rich, Comparatively

By GEORGE SOUTHERN
Falls Church Times Staff

December 27, 2010

From the December 15, 2010, edition of the Washington Post:

The Washington area’s affluence and education levels make it the wealthiest and most educated region in the nation, according to census data . . . .  Fairfax and Loudoun were the only two U.S. counties with median household incomes surpassing $100,000. Tiny Falls Church, which is an independent city and counted separately, had that median income level as well. . . . [T]he island of Falls Church stood out in the ocean of wealth that is suburban Washington. . . .  The median household income in Falls Church tops $113,000.

Reaction of a fellow staff member at the Falls Church Times: “But I don’t FEEL rich!”

In fact, an analysis by this writer indicates that Census Bureau statistics by no means substantiate the Washington Post’s claim that Falls Church is the “wealthiest region in the nation.”

For that matter, simply driving through the streets of the City and observing the houses is common-sense proof that Falls Church is hardly the richest area in the country (unless a lot of Warren Buffett-types live in those “ordinary” residences).

But how could news reports citing U.S. Census data be wrong? The answer is that while the reports technically are not “wrong,” they are highly misleading and poorly interpreted. The Washington Post, not the Census Bureau, labeled us “wealthiest in the nation.”  They drew that assumption from a list of counties with median household income above $100,000.

But “median household income” is a very imperfect indicator of wealth. For one thing, it leaves out net worth. For another, it favors homogeneous areas over disparate ones. Falls Church, like Loudoun and Fairfax counties, has few outliers. While there aren’t that many fabulously rich families, the great majority are quite comfortable. And remember that “median income” is not the average but rather the mid-point.

Net worth is the only real measurement of wealth, but the trouble is that it’s hard to get statistics on net worth and much easier to measure income.  So even Forbes Magazine takes the easy way out and uses median income to compile its list of “America’s 25 Richest Counties.”

The biggest statistical anomaly, however, is the fact that Falls Church City, although not a county and measuring only 2.2 square miles, is nevertheless ranked among counties. That’s because the state of Virginia, alone among the 50 states, prohibits cities from being part of a county.

There is no rural land in Falls Church, and City lines were drawn to exclude anyone living “across the tracks.” So little Falls Church is a “tenderloin” thrown into a comparison with other more disparate areas. Think of the Little City as the “Liechtenstein” of the United States. That also helps explain Falls Church’s #1 ranking in the United States with 69.5 percent of residents over age 25 holding a bachelor’s degree.

But if Georgetown, or Old Town Alexandria, or McLean, or Clifton, or hundreds of other places were considered a county for statistical purposes, their incomes would all outrank Falls Church City. In fact, in Wikipedia’s list of 100 “Highest Income Places” (vice counties ) in the United States, measuring per capita income, Falls Church doesn’t even appear.

For example, even Beverly Hills, CA, with a per capita income of $65,500, barely makes the list of 100 Highest Income Places, coming in at #99. Yet Falls Church City’s per capita income, at around $41,000, is less than two-thirds that of Beverly Hills.

The 98 other “places” with per capita incomes higher than Beverly Hills include Palm Beach FL, Chevy Chase  Village MD, Scarsdale NY, Sausalito CA, Weston (Both MA and CT), Great Falls VA, Malibu CA, Westport CT, and 89 more with a population of at least 1,000.

In conclusion, census data indicate that the City of Falls Church, along with Loudoun and Fairfax counties, enjoys a higher median household income than any other county in the United States. But that median income of $113,000 is typical of a white-collar, middle-class family with two wage-earners — the type of family that is attracted to Falls Church. The median income is high because there just aren’t very many low-income dwelling units in the City.

But for real “wealth,” look elsewhere than in Falls Church.

George Southern is a former international economist for the U.S. Department of State.