Making Sense of Growing Income Inequality
While homes in Brownstone Brooklyn are selling for $6 million, the flip side to that pretty penny is not so bright. In fact, it’s pretty bleak. Unemployment is hovering around 9.5 percent in New York City and the the number of homeless individuals and families in shelters is at a record high.
Recent U.S. Census figures reported what may have been apparent to those that provide services to the needy. Not only are the poor worse off now than they were last year, but the poverty rate is the highest its been in a decade. At the same time, the rich are getting richer and the income gap in Manhattan rivals sub-Saharan Africa, according to The New York Times.
In New York City, the percentage of workers making less than $10,000 a year grew from 10.8 percent to 11.1 percent. Looking at state figures, in New York, it grew from 8 percent to 8.4 percent; in Connecticut, from 5.6 percent to 6.1 percent; and in New Jersey, the percentage grew from 5.3 percent to 5.7 percent.
The percentage of workers making more than $200,000 a year grew in New York City from 6.4 percent to 6.6 percent, though it remained at 6.3 percent statewide. In Connecticut, the percentage rose from 8.1 percent to 8.3 percent. New Jersey saw the only area decrease, where big earners fell from 8.7 percent to 8.3 percent.
Across the country, the middle class is shrinking, and the median income today is lower than it was a decade and a half ago, according to economist Joseph Stiglitz, a Nobel laureate and author of the bestseller, “The Price of Inequality.”
On the October episode of MetroFocus, economist Joseph Stiglitz speaks with MetroFocus host Rafael Pi Roman about the growing economic inequality in New York City and the United States.
In an interview with MetroFocus, Stiglitz said, “If as a result of how well the one percent were doing everybody was doing well that would be one thing,” he said. “The share that goes to that top 1 percent has doubled in the last 30 years.”
Earlier this year, the office of Comptroller John Liu similarly reported that income inequality in New York City is great. His report found that in 2009, 37 percent of New Yorkers took home $20,000 or less in income, and the top one percent of earners took home 32.5 percent of the city’s income, compared with 16.9 percent nationwide. The report also found that New York City had a “noticeably smaller number of filers” taking home middle class earnings of $50,000 to $200,000: just 28.2 percent.
Nicole Gelinas, a fellow at the Manhattan Institute and a contributing editor at City Journal, said the types of jobs that have been created in New York City is one reason why the middle class is shrinking. Most of the jobs created in recent years, she said, are service sector jobs that support the upper class, but doesn’t necessarily pay well. And while any job is better than no job at all, she said, “there’s something missing in the middle.”
“It’s good the wealthy want to be here but it makes it more difficult for people in the middle,” she said. “We’re in a dense area all competing for the same resources.”
But Gelinas also pointed out a positive way of looking at income inequality. Without the rich, the poor would suffer even more.
“It doesn’t help poor people to not have rich people,” she said. “They depend on social services [paid for through taxes.]“
Mayor Michael Bloomberg, one of the richest individuals in the city, said something similar in May, in response to Liu’s report in May.
“We need wealthy people to come here because they pay taxes,” Bloomberg said. “Keep in mind, that one percent pays fifty percent of the taxes in this city. That’s a very good deal for New York City.”
To hear more from Joseph Stiglitz on income inequality, tune in to the next episode of MetroFocus, premiering on THIRTEEN on Oct. 25 at 8:30 p.m. and NJTV on Oct. 25 at 10 p.m.