NYC’s Rising Poverty and Falling Incomes Since the Great Recession
September 27, 2012. The latest data from the Census Bureau on poverty and incomes in 2011 clearly show that New York City has a long way to go to make up for the erosion in living standards caused by the Great Recession of 2008-09. Since the start of the recession, 200,000 more city residents have fallen into poverty, bringing the total to 1.7 million out of a population of 8.1 million. For 2011, the federal poverty threshold for a 3-person family was $17,916.
Poverty has increased and incomes have fallen each year since 2008. NYC’s poverty rate climbed from 18.2% in 2008 to 20.9% in 2011, an increase of 2.7 percentage points, the same as for the nation as a whole (the U.S. poverty rate went from 13.2% to 15.9% over this 3-year period).
The number of city residents living in “deep poverty,” considered to be half the official poverty threshold, increased from 2008 to 2011 even faster than the city’s overall poverty increase (deep poverty grew 15.3% vs. a 13% increase in poverty overall).
NYC family incomes have been battered particularly hard by the recession and historically weak recovery. Adjusted for inflation, median family incomes dropped by 8%, falling by nearly $5,000 from $59,100 in 2008 to $54,300 in 2011. Nationally, median family incomes dropped by 7.2% from 2008 to 2011.
This dramatic income erosion among NYC residents largely results from a 7.8% drop in real median wage earnings, which went from about $35,000 in 2008 to $32,200 in 2011. Median wage earnings includes both full-time and part-time jobs held by city residents and reflects the increase in involuntary part-time work since the recession began, and the fact that most of the city’s net job growth since the recession began has occurred in industries paying below-average wages. Plus, real median wages for NYC full-time workers dropped in 2010 and 2011.
In 2011, 400,000 workers, or one in every 10, were paid wages that kept them in poverty. These 400,000 constitute the “working poor”, i.e., those who work either part-time or full-time but with family incomes below the poverty line.
While over a third of the city’s adults living in poverty had less than a high school education, the city’s weak labor market means that poverty is affecting more and more of New York’s college-educated population as well. Between 2008 and 2011, poverty rose 20 percent among the college educated, or one-and-a-half times as fast as the overall poverty increase. The poverty rate among those with a 4-year college degree increased from 6.6% to 7.6%.
The city desperately needs the sort of recovery that shares the fruits of economic growth with all workers, rather than continuing to be heavily concentrated in the hands of a small elite. According to the latest Census Bureau data for 2011, there has been no lessening of New York City’s extreme inequality since 2007.