Feb
24
Income Inequality in NYC-Class #4-Gerald Lizzo
February 24, 2015 | Leave a Comment
The readings on income inequality for this class were rather interesting because they specifically discussed the issue and its relation to New York City, not just on a national and global scale. For me, while there is no denying that vast income inequality is ever present in our society, the way in which the CNN article quantified the issue was particularly shocking. From 1990 to 2010, the richest 1% saw their median income rise over $250,000 annually to over $700,000 while the lowest 20% only saw their income rise approximately $1,000 to $14,000. What was so shocking was not only the great disparity in change over time, but also just how little the lower 20% are making. As college students in New York City, we all know just how expensive it is to live here. It really makes you wonder how 20% of the population is doing just that on income of under $15,000 a year. According to the U.S. Census Bureau, the median national income in the U.S. is just north of $50,000. If you are making only 30% of the median, how can you live in one of the nation’s most expensive cities?
Yet, viewed from a different perspective, the disparity perhaps does not seem to be so surprising. The City-Journal article raises an interesting point from data collected in 2011. It states, “the top 1 percent took in 88.8 percent of money made in the city from capital gains—the sale of stock and other assets—as well as 64.7 percent of money made from dividends (payments made by companies to stockholders) and interest (payments made to bondholders).” I found this to be quite interesting because it goes back to a point Thomas Piketty raised in his argument about income inequality. Piketty said it is capital gains that generate the most amount of income, not money from salaries. The data seems to support Piketty’s assertion. So, while there is no denying this point, perhaps here in New York City, home of Wall Street and the finance capital of the world, seeing such a large disparity should be completely expected and, furthermore perhaps represents a more extreme example of the issue of income inequality.
However, all of this being said, I think Gelinas’ article does make a strong point that I think is not argued as much as the other. This is the idea that having a group of very wealthy individuals actually works to help advance the city as well. She points out that the top 1/3rd of the city’s wealthiest individuals also contribute nearly half of the total income taxes for the city. Furthermore, she mentions how roughly 2/3rd of the money given to charity, amount of more than $4.5 billion, come from the city’s upper 1%.
Perhaps most interesting, Gelinas points out the effect the wealthy have had on the city’s transportation system, the city’s lifeline. She discusses how in times when millionaires were not as prominent, the subway was less reliable and very dangerous. But thanks to private investment, all of that has changed. I think this is a very interesting point to raise especially in light of recent winter weather. I am not saying there were not any problems because there were, but the city largely operated normally despite heavy snowfall and brutally cold temperatures. This may not bode so well for us because it seems Baruch just never closes and we always have classes while other schools are closed. But it is nonetheless a testament to the overall improvement of the transportation system and thus our city. An effective transportation system provides many opportunities that we now may take for granted and it is all largely due to private funding.
Ultimately, for me however, it is not the wealthy few that necessarily present the issue with income inequality. In fact, I agree that living in an area with a lot of wealth creates more opportunity for everyone. For me, it is the rate at which the wealthy continue to get wealthier while the poor get poorer. I mentioned earlier from the CNN article about the drastic change in the average median income of those in the U.S. Well, if you look at the same time period and look at how much wealth the wealthy control, the numbers become quite staggering. The upper 1% went from 20% to nearly 34% while the middle class fall from 11.9% to 8.8%. Eventually a pattern such as this has to stop, no? It seems we are on a pace where eventually there simply won’t be much left for anyone not in the upper echelons of society and is that something we all think is healthy for everyone?
