At this month’s summit on inequality, Mayor de Blasio told the nation’s mayors, “We’re still going in the wrong direction.” Actually, they can go in the right direction by taking lessons from New York.
Yes, New York has lots of inequality. The mayor was right to note that the numbers here “are quite shocking.”
The city’s top 1 percent — half a million households — earned 36.5 percent of income in 2011, more than the entire bottom 80 percent of New Yorkers earned. Wealth is concentrated, too — the rich took in 88.8 percent of money from stocks and other investments.
But if you’re poor and trying to get ahead, you may be better off in New York — not despite these disparities, but because of them.
Of poor children in America’s 50 largest cities — those born into the bottom 20 percent of families — New York’s kids had the sixth-best chance of moving into the top economic fifth in adulthood, Harvard prof Raj Chetty found in 2013.
How?
Money from the rich allows the city to invest in public assets: transit, parks, libraries. The same top 1 percent who bring in more than a third of the city’s income pay 45.7 percent of income taxes.
Think about the MTA. Three decades ago, New York was a more equal place. It had fewer millionaires and billionaires — and a transit system that was falling apart. Trains were covered in graffiti, broke down all the time, and were unsafe.
“I gave them the money, and they shot me anyway,” one late-night 1992 commuter, Arthur Young, told police just before he died. He’d ridden the subway after 10 pm — and became one of 20 murder victims in the transit system that year.
As New York has grown more unequal, its wealth has allowed it to invest nearly $80 billion into this public asset.
Trains are 24 times more reliable than they were three decades ago — breaking down every 170,000 miles, not every 7,186 miles. Thanks to broken-windows policing, the subways saw one murder in 2013.
Better trains help the poor the most. It costs $8,839 a year to own and operate a car, according to the American Automobile Association. If you can take the subway, that’s $7,500 in annual savings — cash that’s more precious to someone earning $20,000 than $80,000.
It’s not equal. Take the E train to the airport, and you’ll see global businessmen standing alongside minimum-wage airport workers.
But in much of the country, public transit is only for the poor — making it more equal but also shoddier, because nobody with power cares.
Another key to the city’s public wealth is charity.
The city’s top 1 percent donated $4.6 billion to charity in 2011 — 67 percent of New York’s charitable deductions. This giving transforms private wealth into public investments in:
- Libraries: The New York Public Library took in $78.7 million in donations last year — helping it teach immigrants English and tutor poorer public-school students. One of the library’s biggest donors was the late Helen Gurley Brown, the Cosmopolitan editor. She made New York more unequal — she was rich and lots of people are poor. But her success helped poorer New Yorkers.
- Parks: Central Park is a priceless asset — and one that’s been enriched by $700 million worth of mostly private investment over three decades. And it’s enjoyed by more locals than tourists. A visitor to the Harlem Meer will see local families picnicking and playing.
- Museums: The Museum of the City of New York offers a Saturday Academy for 450 Central and East Harlem kids to prepare for the SAT. Last year, 63 percent of participants who retook the exam after the class increased their scores by triple digits.
New York isn’t so much a tale of two cities as it is a place where the poor enjoy the same public amenities as the rich — cheaply or freely.
That’s not the case elsewhere, where you need a car to get around, a backyard to relax and a private tutor to help your kid study.
A city like Detroit would love to have such inequality.
Adapted from the summer City Journal.