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Gap Between Rich and Poor in NYC Wider Than Ever
By
John Del Signore
Published Jan 19, 2011
Modified Jan 19, 2011
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By
John Del Signore
Published Jan 19, 2011
Modified Jan 19, 2011
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Some armchair economists like to argue that a rising tide lifts all boats, but these days the tide's just lifting the yachts, and the rest of us are actually working for minimum wage to manually raise the tide with buckets. According to a new study [pdf] from the Fiscal Policy Institute, the gap between the rich and poor was widened dramatically in NYC ever since the middle class's post-war golden era ended with the Reagan era. Since 1990, the income share of the top 1 percent of New Yorkers has doubled from 21.5 percent to 44 percent—this is almost double the historically high national level of 23.5 percent.
This is also the first time that an economic "recovery" has not restored family incomes and median wages to the peak of the previous business cycle. But the top one percent has recovered quite nicely from their slight dip, and that money hasn't exactly "trickled down"—but that's only to be expected, because furnishing deluxe underground bunker cities can be costly. FPI's Chief Economist James Parrott says:
In New York City, there are about 34,500 households, representing about 90,000 people, in the top 1 percent. On average, these households have annual incomes of $3.7 million. At the same time, about 900,000 people in New York City—about 10.5 percent of city residents—live in deep poverty. Deep poverty is half of the federal poverty line; for a four-person family, that means an income of $10,500. An annual income of $3.7 million translates into a daily level of $10,137—more than the average annual family income of those living in deep poverty...
Jacob Hacker and Paul Pierson persuasively argue in their book, Winner-Take-All Politics, that incomes have risen so high at the top not because of education or other economic factors but because of national policy changes that have favored the wealthy and certain institutions, such as the largest financial companies. Hacker and Pierson point to several national policy changes involving labor markets and labor unions, financial deregulation and taxation that were largely unique to the U.S.
The study also wonders what the average incomes of each group would look like if each group had maintained their 1980 income share: "The average income of the bottom half would have doubled from $14,000 to $28,000. The 'middle' 45 percent would have seen their average incomes rise by 43 percent, twice the growth that was realized. This would have pushed the average incomes of the 'middle' 45 percent to over $100,000 in 2007, instead of the $72,300 level they did reach."
But we couldn't let that happen, because then the top five percent would only have seen an income gain of $150,000, putting their incomes on average at $343,300. You try making ends meet on that! Thankfully, they were spared that grim fate, and the upper crust's actual 2007 incomes averaged out to $764,700. But how do these greedy bastards sleep at night? In the words of Rainer Wolfcastle, "On top of a pile of money with many beautiful ladies."
Tagged
income polarization
kill the poor
Rainer Wolfcastle
rich people
John Del Signore
Originally from the Albany area, John Del Signore has called NYC home since 1995. In addition to his thousands of meticulously-crafted bespoke blog posts for Gothamist, his writing has also been published in The Awl, Deadspin, The Nervous Breakdown, and performed at The Brick Theater in Brooklyn.
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