For more than 15 years, New York state has led the country in domestic outmigration: For every American who comes here, roughly two depart for other states. This outmigration slowed briefly following the onset of the Great Recession. But a recent Marist poll suggests that the rate is likely to increase: 36 percent of New Yorkers under 30 plan to leave over the next five years. Why are all these people fleeing?
For one thing, according to a recent survey in Chief Executive, our state has the second-worst business climate in the country. (Only California ranks lower.) People go where the jobs are, so when a state repels businesses, it repels residents, too.
Indeed, the poll also found that 62 percent of New Yorkers planning to leave cited economic factors — including cost of living (30 percent), taxes (19 percent) and the job environment (10 percent) — as the main reason.
Upstate, a big part of the problem is extraordinarily high property taxes. New York has the country’s 15 highest-taxed counties, including Nassau and Westchester, which rank Nos. 1 and 2.
Most of the property tax goes toward paying the state’s Medicaid bill — which is unlikely to diminish, since the state’s most powerful lobby, the alliance of the hospital workers’ union and hospital management, has gone unchallenged by our new governor, Andrew Cuomo.
New York City doesn’t suffer from outmigration to the extent that the state does; in fact, the city grew slightly in the last decade, thanks to immigration from other countries.
There’s also more work in Gotham than in the state as a whole. The problem is that the kind of work available shows that the city accommodates new immigrants much better than it supports middle-class aspirations. A recent report from the Drum Major Institute has the data: “The two fastest-growing industries in New York are also the lowest-paid. More than half of the city’s employment growth over the past year has been in retail, hospitality and food services, all of which pay their workers less than half of the city’s average wage.”
Worse, more than 80 percent of the new jobs are in the city’s five lowest-paying sectors.
Parts of the country are seeing a revival of manufacturing — traditionally a source of upward mobility for immigrants — but not New York City, where manufacturing continues to decline. The culprits here include the city’s zoning policies, business taxes and decaying physical infrastructure.
Then there’s the cost of living in New York City. A 2009 report by the Center for an Urban Future found that “a New Yorker would have to make $123,322 a year to have the same standard of living as someone making $50,000 in Houston. In Manhattan, a $60,000 salary is equivalent to someone making $26,092 in Atlanta.” Even Queens, the report found, is the fifth most expensive urban area in the country.
The implications of Gotham’s “hourglass economy” — with all the action on the top and the bottom and not much in the middle — are daunting.
The Drum Major report, which noted that 31 percent of the adults employed in New York work at low-wage labor, came with a political agenda. The institute wants the city to subsidize new categories of work by expanding the scope of “living-wage” laws, which require higher pay than minimum-wage laws do, to all businesses that receive city funds or contracts. But that would mean higher taxes on the middle class and a further narrowing of the hourglass’ midsection.
Gov. Cuomo is calling for a property-tax cap but has postponed the question of “mandate relief” for localities — for example, relaxing state laws that force localities to pay out exorbitant pension benefits. Mayor Bloomberg has pledged not to increase local taxes — but even at their current level, city taxes and regulations will keep serving as an exit sign for aspiring 20-something workers.
In short, we can expect New York to lead the country in outmigration for the near future.
Fred Siegel is a contributing editor of City Journal, from whose Web site this is adapted, and a scholar in residence at St. Francis College in Brooklyn.