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If you have any questions, please contact Bryan LaVigne at 518-786-3156 or blavigne@fiscalpolicy.org

Testimony Presented to the New York City Council Committee on Civil Service and Labor

February 27, 2014. In testimony presented before the New York City Council Civil Service and Labor Committee, FPI’s James Parrott summarized several employment, wage and cost of living trends affecting low-wage workers in New York City. He noted that 37 percent of all wage-earners in the city are paid less than $15 an hour, and that half of all black and Latino workers are low-wage by this measure. Parrott discussed several groups of low-wage workers and suggested policy steps the City could take to raise the wage floor and improve economic conditions in low-income neighborhoods. Parrott’s testimony also summarized academic research on the benefits to employers and communities from raising wage standards.

New report confirms New York’s profound income polarization

February 19, 2014. A new report from the Economic Analysis and Research Network (EARN) that presents data on income distribution trends for all 50 states from 1917-2011, confirms an analysis of income trends in New York that the Fiscal Policy Institute initially published in 2010. The report, by economists Estelle Sommeiller and Mark Price, builds on a groundbreaking study by economists Thomas Piketty and Emmanual Saez in 2003 that used data from income tax returns to document rising inequality in the United States since World War I.

FPI’s latest estimates of the share of income received by the top 1% in New York were published recently in its briefing book (p. 77) on the Governor’s proposed 2014-2015 state budget. Using data from the proposed budget and the latest published tax data, FPI estimates that the top 1% share rose to 30.4% in New York State and 38.7% in New York City in 2012, compared to Saez’s latest estimate of 22.5% for the top 1% share nationally.

FPI’s estimates for New York’s income distribution date to 1980, the first year that detailed tax data are available from the New York State Department of Tax and Finance. The new Sommeiller and Price report draws on Internal Revenue Service tax data back to 1917. The IRS data are often less detailed in reporting on high incomes than New York tax data. Still, the Sommeiller-Price report is invaluable in providing comparable annual estimates for all states over a nearly century-long period, and presents that data in an easily accessible format where readers can view summary income trends for individual states.

Highlights for New York include:

  • The top 1% income share rose to 32.6% in 2007, exceeding the previous peak of 29.4% reached in 1928, right before the stock market collapse triggering the Great Depression. While the one percent’s income share declined temporarily when capital gains plummeted from the 2008 financial collapse, it has risen again since 2009.
  • According to the Sommeiller-Price data, the incomes of New York’s top 1% increased by 11 percent (inflation-adjusted) from 2009 to 2011, while the total incomes of the bottom  99% shrank by 1 percent. Thus, all of New York’s income growth in the recovery’s first two years went to the very top.
  • Over the nearly 30-year span from 1979-2007, New York’s richest 1% garnered over two-thirds of all income gains; inflation-adjusted incomes grew by 355 percent over that span for the top 1%, compared to a 22 percent increase for the bottom 99%.
  • In 2011, the average income of New York’s 1% was $1.7 million, over 40 times the $43,202 average income for the bottom 99%. The top-to-bottom ratio for the U.S. was 24 percent. Connecticut’s top-to-bottom ratio (40.6) was slightly ahead of New York’s (40.5). New Jersey’s top-to-bottom ratio (23.9) ranked it 10th greatest among states.
  • The average income of New York’s very richest 1% of the top 1% was a shade under $50 million in 2011 ($49,737,418). The 1% of the 1% accounted for 8.3% of total New York income, more than one-fourth of the overall top 1% share.

The lop-sided growth in incomes seen in New York State since 1979 is true to some extent for all states, according to the new report, although it has been particularly pronounced in New York. The percentage point increase in the top 1% income share from 1979-2007 was 21.1 in New York, nearly twice the 11.8 percentage point increase in the top 1% share nationally.

FPI’s state budget briefing provides an overview of economic conditions in the Empire State, including income polarization, continued high unemployment, severe economic hardships, rising poverty and economic insecurity. FPI suggests several budget, tax and economic policy ideas that New York’s leaders should consider to address this heightened economic insecurity and the growing income polarization that has spawned that insecurity. See An Economic Policy Agenda to Address Income Inequality, pp. 83-89 in the budget briefing book.

Events Honoring Frank J. Mauro

Two events were held honoring the contributions of Frank J. Mauro, Executive Director Emeritus: Wednesday, March 12, 2014 in Albany and Thursday, May 1, 2014 in New York City.

Why New York State Should Let Cities and Counties Enact Higher Local Minimum Wages

February 14, 2014. While New York’s economy is gradually recovering, far too many workers still earn very low wages. Pay for the typical New Yorker has not kept up with inflation, and the majority of new jobs being created in New York and nationally are in low paying fields. As communities in New York struggle with these serious economic challenges, other states have empowered localities to respond by adopting higher local minimum wages. From California to Maryland, growing numbers of cities and counties are enacting higher local minimum wages to fight poverty locally. They have found that these policies have improved jobs and local economies, without hurting business growth.

This joint report from the Fiscal Policy Institute and the National Employment Law Project provides an overview of the positive experiences in other states with higher local minimum wages and makes the case for empowering cities and counties in New York to do the same. The report presents data on the needs of low-wage New York workers and their families, and the potential broad benefits of allowing higher city or county minimum wages. With millions of New Yorkers earning low wages, allowing cities and counties to raise the wage floor above New York’s current minimum wage would have a significant and positive impact on low-wage workers, their families, and local communities.

Testimony at the New York City Council Education and Women’s Issues Committees

February 11, 2014. James Parrott testified before the New York City Council Education and Women’s Issues Committees on Feb. 11, 2014, on the subject of Mayor deBlasio’s Universal Pre-Kindergarten and After-School Proposals. Parrott supported the notion that there should be a dedicated funding stream to pay for these proposals financed by an increase in the top rate on the City’s personal income tax. He examined the proposed increase in historical perspective, reviewed the issue of migration in response to local and state tax differentials, and summarized FPI’s data showing the increase in New York’s national share of millionaire households over the past decade.

Testimony at the Joint Legislative Public Hearing on the 2014-2015 Executive Budget – Taxes

February 10, 2014. Executive Director Fred Floss testified before the Senate Finance and Assembly Ways and Means Committees on the Governor’s 2014-2015 Proposed Budget and Financial Plan. Floss noted the proposal for FY2015 is contractionary, since it cuts $2 billion in expenditures and only reduces taxes by $480 and will therefore be a drag on economic growth in New York State. He also commented on a number of tax proposals including the property tax freeze, corporate tax reductions and the estate tax proposal. If implemented, the financial plan leads to at least a “Decade of Austerity,” which hurts lower and middle class residents while giving the biggest benefits to the wealthiest New Yorkers.

The testimony also looked at the Governor’s circuit breaker proposal and found it was not targeted enough to give real relief to those in the most need, recommending (S3266/A5884 and S1002/A1941) as better alternatives. Floss also commented on a number of analytical flaws in the Ernst and Young study on corporate and manufacturing tax cuts which caused them to overstate the number of jobs and economic activity that would be created by these cuts.

Immigrants and Detroit’s Rebirth

February 5, 2014. In an opinion piece that ran in the Detroit News, Andrew Wainer makes the case that immigrants can be an important part of a strategy for economic revitalization of Detroit. While the jumping-off point of the article is Michigan Governor Rick Snyder’s proposal for highly skilled immigrants who would be tethered to Detroit by a geographically restricted Visa, Wainer makes the case that it’s not just highly skilled immigrants who count, and that regular immigration, without special Visas, have been an important part of the country’s economic growth since its beginnings.

In addition to supporting communities that are experiencing overall population loss, immigrants — including low-skill — are making disproportionate contributions to Rust Belt economies. Research by the Fiscal Policy Institute found that although immigrants make disproportionate contributions to the U.S. economy overall, they make even more disproportionate economic contributions based on their population in Rust Belt cities like Detroit.

As they have been throughout much of U.S. history, immigrants are also a disproportionate number of our country’s entrepreneurs and their business initiative is evident in revitalizing Rust Belt commercial corridors.

 

Testimony at the Joint Legislative Public Hearing on the 2014-2015 Executive Budget Proposal – Human Services

February 4, 2014. Submitted by Carolyn Boldiston, FPI’s Senior Fiscal Policy Analyst. Testimony includes: recommendations for the 2014-2015 state fiscal year; review of actual and proposed reductions in human services spending; use of federal Temporary Assistance for Needy Families (TANF) funding in the 2014-2015 Executive Budget; and, the impact of decline in the purchasing power of the monthly cash assistance grant.

Regional Insights: Pittsburgh Could Use Some Immigrants

February 1, 2014. An opinion piece in the Pittsburgh Post-Gazette suggests that, since immigrants are somewhat more likely than U.S.-born workers to be business owners, immigration could also hold economic growth potential for Pittsburgh. FPI has data suggesting that this potential shouldn’t be exaggerated, but that there is also real potential there.

The article quotes FPI’s report on immigrant small business owners, saying:

National data show that foreign immigrants are more likely than U.S. natives to form small businesses. A study by the Fiscal Policy Institute found that nearly 1 in 5 small business owners (18 percent) in the U.S. in 2007 were immigrants, and immigrant-owned businesses collectively employed 4.7 million workers.

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