The Gilded City of New York

April 18, 2013. In a special issue of The Nation that includes over 20 stories about New York City under Mayor Bloomberg, a picture is painted of a two-tiered urbanism. The lead story by The Nation’s editors describes the heightened income polarization in New York City and cites data from various FPI analyses, including Pulling apart: The continuing impact of income polarization in New York State.

Here is New York in 2013: a city of dazzling resurrection and official neglect, remarkable wealth and even more remarkable inequality. Despite the popular narrative of a city reborn—after the fiscal crisis of the ’70s, the crack epidemic of the ’80s, the terrorist attack of 2001, the superstorm of 2012—the extraordinary triumph of New York’s existence is tempered by the outrage of that inequality. Here, one of the country’s poorest congressional districts, primarily in the South Bronx, sits less than a mile from one of its wealthiest, which includes Manhattan’s Upper East Side. And here, a billionaire mayor presides over a homelessness crisis so massive that 50,000 men, women and children sleep in shelters each night. More New Yorkers are homeless these days than at any time since the Great Depression.

The numbers tell the story. Between 2000 and 2010, the median income of the city’s eight wealthiest neighborhoods jumped 55 percent, according to the Fiscal Policy Institute. Meanwhile, as the cushy precincts got even cushier, median income dipped 3 percent in middle-income areas and 0.2 percent in the poorest neighborhoods.

Image: Susie Cagle. Source: Fiscal Policy Institute. High income neighborhoods defined by median family incomes $91,000 and above, low-income neighborhoods defined by median family incomes between $24,000 and $47,000.

New York, of course, has always been a city of striking contrasts, but its wealth gap is growing ever more extreme. The richest 1 percent of New Yorkers claimed almost 39 percent of the city’s income share in 2012—up from 12 percent in 1980. The money pouring in at the top of the income brackets has simply pooled there, without trickling down to the bottom or even the middle. This great pooling has occurred as median wages have fallen, the cost of living has increased, and the poverty rate has risen to 21 percent—as high as it was in 1980. As a result, America’s most iconic city now has the same inequality index as Swaziland.

This isn’t entirely New York’s fault. Over the last three decades, the whole country has experienced similar tectonic shifts, thanks in part to the national economy’s increasing tilt toward finance—a sector that has an outsize presence in New York, which helps explain why the city has not only mirrored but exceeded the nation’s rush toward inequality. “To the extent that New York is the home base for a lot of financial institutions, we have a lot of people who are able to pay themselves very well,” explains James Parrott, chief economist of the Fiscal Policy Institute in New York.

But, Parrott adds, the stewards of New York City—its mayor, legislators and other influencers—could have made choices to counter this trend: “New York City’s government is significant enough in its breadth…that the policy tools exist and the wherewithal exists to do something at the margins to lessen inequality.” The choices, however, that might have corrected some of the skew—within education, economic development, labor rights, poverty policy, budgeting—have largely been ignored in favor of creating a very different model of metropolis.

Image: Susie Cagle. Source: Fiscal Policy Institute, based on Pilketty and Saez’s top 1% income share for the US and FPI analysis of NYS Department of Tax and Finance and Division of the Budget data for NYS and NYC top 1% income share, 2010-2012 projected.

In “Bloomberg by the Numbers, Aileen Brown cites several pieces of FPI research on the increase in business tax expenditures, the decline in city funding for human services, the decline in median wages, and other measures of well-being in NYC.

In “Interactive Map: Bloomberg’s New York”, graphic artist Susie Cagle also draws heavily on FPI research.