Feb
23
Income Inequality NY – Post #4 – Josh Hirth
February 23, 2015 | Leave a Comment
Today’s articles discussed income inequality in New York City. Although the numbers were truly troublesome, I don’t think they paint the whole picture of the situation. After reading the city-journal article they were put into perspective. I maintain that income inequality is a true problem, but it appears to be a side effect of capitalism. If we were to try and manipulate it, we would be walking a fine line, and change the very definition of the capitalistic democracy America has enjoyed for 100s of years. There needs to be a bottom so there can be a top. Just like in a large class, not everyone can get an A, there has to be a B, C, D to make an A worth having. If everyone was rich there would be no concept of “rich vs. poor” and there would be no free market capitalism in this country.
Though the income difference was sharp in the New Yorkers article, it quite frankly is not surprising. I think everyone that walks through midtown Manhattan or Wall Street, realizes the absolute wealth that exists there. Specifically when referring to “The highest median household income of any census tract the subway has a station in (for Chambers Street, Park Place, and World Trade Center, all in Lower Manhattan). “ So although the numbers are high, I truthfully expected them to be higher.
Regarding the CNN article, as I mentioned I find the statistics alarming. More specifically the fact that 50.5% of the city’s income is earned by whites which make up only 37.1% of the population. I also was surprised to see the extent to which the upper 1% wealth grew relative to the lower 20% from 1990-2010. While the lower 20% grew by about $1000 in 20 years, the upper 1% grew by over $250,000. That represents a difference of less than 10% vs. about 50% growth respectively, a truly problematic discrepancy.
The article entitled What the Rich Give to New York makes the point that I have been getting at over my past few blog posts. That while income inequality is a problem; the wealth that the upper class brings to the table enhances the quality of life for everyone. And without them, many of our social programs would largely not exist. In fact Raj Chetty a Harvard Economics professor says “of poor kids in America’s 50 largest cities—those born into the bottom-fifth income percentile—New York’s had the sixth-best chance of moving into the top economic fifth in adulthood.” That’s a tremendous piece of information, and while we should strive to be number one on that list, the fact that there is stillroom for upward mobility in this city is a testament to how well our system works.
Our parks, subways, and museums all rely on private funds to keep them at the top of their game. In fact a while back I read an article about a luxury building on the upper west side of Manhattan, that was only allowed to build if and only if they took responsibility for the upkeep of the subway station below. That shows how much we rely on the wealthy, there would be no subway upkeep, or the city would have had to pay for it, if not for the wealthy city dwellers living in that apartment building. “The same top 1 percent who bring in more than a third of the income in Gotham pay 45.7 percent of the city’s income taxes, a share disproportionate even to their high pay. A second answer: private charity. According to their tax filings, the city’s top 1 percent donated a whopping $4.6 billion to charity in 2011—67 percent of New York’s itemized charitable deductions.” There is a reason that if we opened up our boarders, we would see people flood in from all corners of the world because after all, here in America (and more specifically New York), we have the greatest opportunity, in part thanks to our wealthiest citizens.
