Economic inequality has gotten much worse over the several decades. Workers’ wages stagnate while productivity soars. The major reason for this situation is government policies. Any attempt to address the problem must be multi-dimensional.
Our focus on economic inequality has to do with whether New Yorkers at the lowest income rungs have access to minimally decent life conditions and opportunities for upward mobility.
The situation for the black community is dire. The poverty rate in the city for blacks is 23.3 percent, nearly twice that of whites (12.8%). The unemployment rate is 16.0 percent compared to 6.7 percent for whites.
Opportunities for Advancement
There is a need for a minimum wage for New York City because of the vast difference in the cost of living between the city and upstate. The minimum wage in New York State is $8.00 an hour, about $16,000 a year for a full time worker. The federal poverty level for family of four is $23,850. Over 1.7 million city residents live below the federal poverty level. Mayor de Blasio was rebuffed in Albany when he attempted to raise the city’s minimum wage.
Workers’ benefits are crucial to closing the gap in economic inequality. A living wage – at least for those workers employed in city contracted jobs – should be instituted by the city. A family leave bill passed the Assembly in Albany, but it is stuck in the State Senate. The importance of unionization for low-wage workers cannot be overstated. Without collective strength, low-wage workers are easily susceptible to exploitation.
The city needs to expand its Career and Technical Education courses and schools. Last year 800 high school students wanted to take CTE courses, but there was no room for them. And CTE should be linked to apprenticeship and jobs in expanding local industries.
The city should institute better policies for the GED. Almost one million workers are without a high school diploma or a GED, inhibiting their opportunities for advancement in the labor market. Yet few take the exam and even fewer pass it. Nearly one out of five black adults lack a high school diploma or GED.
Distribution of Resources
Another concern of income inequality is whether our resources being distributed fairly, so as to minimize the gap between the bottom and the top. The NYU Furman Center just released a report, “The State of New York’s Housing and Neighborhoods in 2013,” which examined trends in income and how they relate to disparities in neighborhood conditions and services.
In New York City, we must combat the very strong tendency of the real estate market to segregate people by income. This creates neighborhood inequality, the unequal distribution of resources that affect the quality of life and the opportunities for advancement – primarily adequate public schools and decent affordable housing.
We know from the Furman report and our work that low-income New Yorkers — those under twice the federal poverty level — bear the most severe rent burdens, draining resources they need for other purposes. We applaud the ambitious goals of the Mayor’s Housing New York Plan, but we would like to see benefits more deeply targeted by income. While 92 percent of low-income renters bear severe rent burdens (at least half of income for rent), they will receive only 20 percent of the affordable units under the mayor’s plan.
NYCHA – the New York City Housing Authority - runs the largest public housing program in the nation, a critical local affordable housing resource. NYCHA has been in serious financial and physical decline for years. Residents pay affordable rents, but they live in abysmal conditions, many apartments deteriorating.
We need long-term capital investment from the city and state in infrastructural improvements to aging NYCHA buildings - a “Marshall Plan for NYCHA.” If the city can invest in stadiums and casino construction, it can invest in public housing. Help won’t be coming from Washington for the foreseeable future, if ever again.
Most low-income New Yorkers depend on the private rental market. Many face increasingly unaffordable rents, even in rent-regulated apartments. On average, they pay at least half their income for rent.
The Rent Guidelines Board should hold the line on rent increases in stabilized units. The Board continually overcompensates owners with rent increases that exceeded actual increases in operating costs. Given the high rent burden among low-income New Yorkers, it is time for the Board to freeze rents.
Our tax system exacerbates income inequality by providing benefits for the wealthy while disregarding the plight of low and moderate income families. This is true in Washington, where homeownership income tax deductions result in annual tax expenditures more than triple the HUD budget. And it is true in Albany, where the STAR property tax relief program provides billions of dollars of benefits for homeowners — regardless of income — while it disregards renters who pay property taxes through their rents.
In each of these cases, actions by public officials can help to close the huge gap in economic inequality that exists in this city and state. They should focus on aiding low-income New Yorkers rather than securing another break for the wealthy.