With Amazon adding to the region’s arguably already robust tech sector, and local leaders focused on diversifying the professional landscape, the economic forecast for Northern Virginia looks promising for those on the search for an even better salary.
Northern Virginia. It’s been one of the best places to live and work, with some of the highest average salaries, some of the most sought-after real estate and some of the best amenities available in any area of the country for at least the last 10 years.
Wow. That statement may read like typical economic development marketing bluster. But in this region, facts consistently bear out the reality behind the hype.
In fact, Northern Virginia has not just done well in the past few years, but is just entering a new era of serious boom times (hello, Amazon). According to the U.S. Census Bureau’s 2018 American Community Survey, Loudoun County ranks No. 1 by median household income in the entire nation. Yes, the outside-the-Beltway county outpaces the San Francisco-adjacent suburban communities and the suburban enclaves where New York City commuters typically live, in terms of salary. Loudoun’s median household income is just under $140,000, while Arlington and Fairfax ($122,394 and $122,227, respectively) are also in the mix with California and New York/New Jersey bedroom communities. For comparison’s sake, the median household income for the entire state of Virginia, according to recent Census data, is $72,577.
But hold on—there are caveats.
“We are about 18.4% more expensive in terms of cost of living than the national average,” says Jeannette Chapman, deputy director and senior research associate for the Stephen S. Fuller Institute, an economic think tank based at George Mason University. “If you look at where we rank in terms of other large employment metros, we are third behind San Francisco and New York,” she says. “So what that means is that the top-line average wage or household income doesn’t purchase as much here as other areas in general.”
In short, salaries in Northern Virginia are relatively high, but so is the cost of living.
Despite the impressive NoVA numbers, local economic development leaders have made it their mission to see those salaries climb even higher.
The goal, according to Stephanie Landrum, president and CEO of the Alexandria Economic Development Partnership (AEDP), is to create more jobs with a higher average wage so that residents can work and live here.
With 2018’s announcement that Amazon had picked Crystal City as its second headquarters, it’s fair to say things are heading in the right direction.
Landrum and her team were instrumental in the dealmaking process with Amazon’s HQ2, which will take up 6 million square feet for its new campus that stretches between Alexandria and Arlington.
That huge development will positively affect many workers and businesses in Alexandria, with a lesser but similar ripple effect to be felt across the entire Northern Virginia region.
One thing representatives from AEDP discussed with Amazon was the pay. “They ended up coming up with an average wage of $150,000,” Landrum says. “That is significantly higher than Alexandria’s prevailing wage, which is about $72,000. This single employer is going to bring at least 25,000 employment opportunities literally right here to our doorstep,” she says. She notes that also translates to another 25,000 indirect employment opportunities.
An economic impact report from the Fuller Institute showed that approximately 15% of new Amazon workers (7,265 to 8,218) would choose to reside in Arlington, with 69% of these workers (34,578 to 34,727) residing somewhere in Virginia.
The remainder would largely reside in Maryland and DC. These new households—ranging from 7,100 to 8,000 in Arlington County and approximately 34,300 in Virginia overall—are expected to generate a total household income ranging from $7.9 to $9.5 billion.
According to Victor Hoskins, president and CEO of the Fairfax County Economic Development Authority, the ripple effect from Amazon will change salary levels across the area. For professional services, salaries in the DC area average $121,000. Professional services wages in Fairfax County pay $125,000 on average. “That Amazon average wage will probably lean those wages forward,” Hoskins says.
The “Amazon factor” will certainly have its impact on the region, but Northern Virginia has already been adding between 20,000 and 30,000 jobs each year going back to 2015, Chapman says.
Buddy Rizer, the executive director of Loudoun County Department of Economic Development, has witnessed that steady growth before Amazon became a factor.
He says Loudoun County has had a unique economic success story in the last decade. “It’s been big on investment but also big on jobs,” Rizer says. “Traditionally, our economy has not been the big one-shot job creation. We had a few of those, like Raytheon and others. But what we have seen is a ton of organic job creation, averaging more than 3,000 new jobs a year.”
Loudoun County has diversified its economy over the last few years and is now less dependent on government work as it becomes more of a tech-based economy, Rizer says. For example, the county has become the world’s largest location for data centers, with 14.5 million square feet of data centers in the county now and 13,000 jobs in or around the data center industry. “This year we will make more than $300 million in local tax revenue from the data centers,” Rizer says. “And we have reduced taxes by 25-and-a-half cents” over the last six years.
That’s all good news for the Northern Virginia economy to be sure. The growth charts are all going in the right direction, but chatter about a potential recession has some nervous.
However, Chapman says there are recent examples to provide predictors of how a recession could play out locally.
“There was a minor recession regarding sequestration because of federal policy changes,” she says about the 2013 automatic government spending cuts. “And government shutdowns disrupt things across the board, like retail workers and Uber drivers. So I would say that we are recession-resistant, but not recession-proof.”
Chapman says that what could jeopardize this area’s super-charged economic growth is the failure of the private sector to grow and pivot away from the federal government. “We were able to grow in the past 50 years because of the federal government,” she says. “But forecasts show that is going to flatten out, and so that source of growth is gone. It needs to come from somewhere else, and that is the role that Amazon plays. Not the number of jobs, but getting that sort of work here that tends to cluster around each other.”
Richest Counties in the United States, by Median Household Income
According to the most recent American Community Survey, from the U.S. Census, released in September 2019, three of the richest counties in the nation are in Northern Virginia.
Loudoun County, Virginia – $139,915
Santa Clara County, California – $126,606
Marin County, California – $126,373
San Mateo County, California – $124,425
Arlington County, Virginia – $122,394
Fairfax County, Virginia – $122,227
Somerset County, New Jersey – $121,378
Douglas County, Colorado – $119,615
Howard County, Maryland – $116,984
Nassau County, New York – $116,304
Median Home Sales Prices
Arlington County: $637,300
Fairfax County: $508,200
Loudoun County: $489,900
Prince William County: $371,300
Average Credit Card Debt in the DC Metro region: $7,687
Median Student Loan Debt in the DC region: $22,803
With one in two people over age 25 in the region with a post-grad degree, the number of people with student loan debt runs high. In fact, the DC region ranks No. 1 for student debt holders who owe more than $100,000.
Median debt for millennials in the DC region (can include student loans, car loans, credit card debt): $25,810
Child Care Costs
Average cost of child care in Virginia, for one child: $13,728 per year
Average cost of child care, for two children: $24,929 per year
(That’s 42.5% more than the average rent in Virginia.)
Average cost of public college in Virginia: $12,820 per year
Median Income in the DC region: $102,180
The budget you need to live comfortably in the DC region, according to Economic Policy Institute’s Family Budget Calculator:
For a two-parent household with two children
Child Care: $3,279
Health Care: $950
Other Necessities: $982
Monthly Total: $8,795
Annual Total: $105,539
For a two-parent household with one child
Child Care: $1,021
Health Care: $764
Other Necessities: $957
Monthly Total: $7, 374
Annual Total: $88,484
For a one-parent household with one child
Child Care: $1,021
Health Care: $463
Other Necessities: $860
Monthly Total: $6,505
Annual Total: $78,059
For a two-adult household
Child Care: $0
Health Care: $603
Other Necessities: $814
Monthly Total: $5,232
Annual Total: $62,787
Sources: Median home sales prices via Zillow; Debt stats via ValuePenguin and LendingTree; Stats of child care costs via Child Care Aware of America and Economic Policy Institute