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Wages Fall for New Yorkers at the Bottom of the Pay Scale

Moderate Job Growth Is Not Enough to Reduce Poverty in New York City

September 13, 2005, New York, New York—New York’s economic recovery has yet to reduce the city’s poverty rate according to Poverty in New York City, 2004 : Recovery? (PDF), a report released today by the anti-poverty group, the Community Service Society (CSS). Although the job market has been expanding since the summer of 2003, wages at the bottom of the pay scale are falling. Annual earnings and hourly wage rates dropped for New Yorkers at the bottom third of the earnings ladder. From 2003/2002 to 2004/2003, annual earnings fell by 5.1% and hourly wages declined by 5.5%. The report, which analyzes data from the Current Population Survey of the U.S. Bureau of Census tracks poverty rates and earnings trends in New York City.

According to Mark Levitan, Senior Labor Market Policy Analyst at CSS, “The decline in earnings explains why the poverty rate has not fallen in this recovery. A significant reduction in poverty requires not only more jobs, but higher pay.”

Key findings include:

• New York’s poverty rate is 1.7 times the nation’s. Over one-in-five (21.8%) New York City residents are poor compared with one-in-eight Americans (12.7%) nationwide.
• Poverty rates for persons of color are more than twice that of non-Hispanic whites: 12.9% for whites; 28.8% for blacks; 29.4% for Hispanics.
• Nearly one-in-three (32.5%) of the city’s children lives in poverty. Nationally, the rate is 18.3%.
• Children living in single mother households have dramatically higher rates of poverty than those living with two parents. Living with mother only: 55.8% (New York City); 40.6% (United States). Both parents present: 17.0% (New York City); 8.6% (United States).
• In both the city and the nation, poverty rates for working age adults (18 to 64 years of age) who lack a high school diploma are six times higher than for those with a college degree or higher.

David R. Jones, president of CSS, said, “We cannot ignore the needs of poor urban communities any longer. Poor people are paying more than 50% of their annual income towards rent. How will they survive if their earnings are further eroded by a weak economy? I am deeply concerned that the ripple effects of Katrina such as high gas and energy prices, overcrowding in already overburdened school systems absorbing people displaced by the storm, and unemployment in communities already suffering high rates of joblessness will compromise this population even further.”

CSS proposes the following recommendation for Congress the in light of these findings:

• Halt the plans for federal cuts to safety net programs, Food Stamps, Section 8, and Medicaid.
• Extend the welfare law as written.
• Refrain from tax reductions for the wealthy, which will financially starve the federal government’s ability to address the needs of the poor for years.

CSS is an independent, nonprofit organization that for more than 160 years has provided innovative solutions to help New Yorkers in need defeat the problems of poverty and strengthen community life for all. Through a combination of service initiatives, policy analysis, and advocacy we bring about systemic change that empowers those in need to advocate for themselves.

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