Most New Yorkers would agree that poverty and inequality are bad, and the data confirms that both are far above average in New York City. Advocates for the poor report this constantly. Their solution: more money for their organizations, and more places for the poor to live.
As I wrote here, poverty and inequality may be explained by economic and social conditions and public policy at the national level. At the local level, however, the level of poverty is primarily a product of migration: who moves in (or is kept out), who moves out (or is pushed out), who is born and who dies off. Local changes in the poverty rate may have nothing to do with whether individuals are getting richer or poorer whatsoever. Even if the city succeeded in helping every poor person within its borders to advance out of poverty, its poverty rate would not go down if those formerly poor people moved out and were replaced by new poor people seeking to move up. When people advocate for more low-income housing in New York City, they are advocating for the opportunity for more low-income people to live here, and thus a higher poverty rate. Places with low poverty rates are generally affluent suburban jurisdictions that seek to exclude the poor, through zoning rules that keep the price of housing high (more on that in future essays). Thus, the city’s high poverty rate is an inevitable by product of its accessibility to the poor, something that is in other ways desirable.
The same may be said of income inequality. Nationally, the level of inequality is a product of economic and social conditions and public policy, but locally it is a product of migration. Yes New York City has lots of poor people, and lots of affluent people. That means it has a high level of income inequality. Affluent Scarsdale, where the poor are not permitted to live, has much less income inequality. Newark, where the non-poor do not want to live, also has less income inequality. In Levittown all the houses were the same, and were sold at the same price, so all the people who lived in them had about the same income.
Although at one time some believed New York City would end up like Newark, it continues to have poor, middle income, affluent, and wealthy people. One might wish that in the United States everyone were middle income, but given that they are not, who would those who object to local inequality wish to be excluded from out city? The poor? The rich? The merely affluent? The middle class?
Maddeningly, while some poverty advocates object to the level of income inequality at a citywide level, others (hopefully not the same people) object to the lack of income diversity at the neighborhood level, claiming segregation. At other times, there have been objections to the close proximity of concentrations of wealth and poverty, as at the border of East Harlem and the Upper East Side.
Looking beyond the ranks of the poverty advocates, one still finds middle income people who object when less well off people move to their neighborhood, although most such people now live in the suburbs. And there are now politicians and pundits who object to those with more income moving to a neighborhood, ie. gentrification. Sometimes race is involved. When the Daily News’ Dennis Hamill objected to college-educated people moving to the formerly working-to-middle class Irish neighborhood of Windsor Terrace, it is not.
All the complainers need to calm down and ask the question: should people with different incomes live near each, other or not?
My view is economic integration is good, but people at different income levels don’t live in the same building or on the same street to get its benefits. If rich, middle income and poor live in the same local tax jurisdiction, and the places where they work are there as well, then the local taxes paid by the affluent and businesses may be used to provide public services to the middle class and benefits to the poor, rather than being reserved for themselves. If the affluent and businesses, and the middle-class and the poor, live within an easy commute of each other, then the former can benefit from the labor of the latter, and the latter can benefit from the jobs generated by the former.
With the burdens of the poor partially localized, the more poor people you have in your local tax jurisdiction, the less money you have for benefits for each of them, the less money is available for services for yourself, and the higher taxes you must pay. Thus, I wouldn’t mind if New York City’s poverty rate was lower – closer to the national average. But not too much lower. If we wanted to live in an exclusive suburb, I would have done so. We chose otherwise.
There are poverty issues that New York City needs to do better on, and I’ll discuss these later. In general, however, New York City’s high poverty rate and income inequality is a real condition, but a phony issue. Complaints about poverty and inequality should be directed to Washington.