Rich Man, Poor People

The Billionaire Mayor and the Income Gap

Let this fact sink in: The United States has the most unequal income distribution of any advanced economy in the world, with the current gap between rich and poor now greater than at any time since 1929. In New York State, the disparity is by far wider than in the rest of the country, with the top fifth of families making 14 times what the bottom fifth do. In New York City, the problem is starker still. Despite the sense that the rising financial tide of the '90s raised all boats, only the richest 5 percent of New Yorkers increased their share of income between 1987 and 1997. * "New York is somewhat of a poster child for the inequality problem," says Jared Bernstein, an economist with the liberal Economic Policy Institute. "You have more poverty and far more extensive wealth." A magnet for poor immigrants who hope it will provide them with a better way of life, home to communities that have long been mired in poverty, the city has an underclass that is increasingly alien from the city's ultra-rich. Almost 1.6 million of the city's 8 million citizens fall under the poverty line. Meanwhile, says Bernstein, "there are tremendous earning opportunities for people like Michael Bloomberg." * Indeed, the unprecedented disparities in our current economy might be summed up by the strange fact that the city's entire projected budget deficit—now estimated at $4.5 billion—is roughly equal to the estimated net worth of the new mayor. With some $4.5 billion in corporate and real estate holdings, Bloomberg is both the city's most powerful political leader and its fifth rich-

est citizen. (With $7.5 billion, publishing magnate Rupert Murdoch ranks No. 1.)

While vast wealth is concentrated in the hands of individuals, the city is announcing a host of new cuts this week. It's tempting to think of Bloomberg—who once spent $2 million on a "seven deadly sins" party for his company, complete with a "gluttony bar" and entertainers who repeated the phrase "Money, ain't it gorgeous?"—wiping out the city's financial problems with a wave of a custom-made magic wand. In addition to a townhouse on East 79th Street, Bloomberg owns private homes in London's Cadogan Square; Vail, Colorado; Bermuda; Armonk; and a farm in North Salem where his daughter keeps her horses.

Imagine: Just by cashing in his Bermuda estate, worth an estimated $10 million, he could more than make up for the $2 million that was going to help uninsured patients at city hospitals pay for their medications before the last budget slashing. And there'd still be plenty of spare change to restore the $7 million cut from anti-smoking programs aimed at youth. Or, let's say he'd eliminated the direct mail part of his almost $70 million campaign. That $16 million would have been enough to avert cuts to the city's public libraries and keep them functioning at the level they were last year.

Of course, the mayor can't actually be expected to use his personal wealth to bail the city out. The prospect is unrealistic both because most of his fortune is tied up in his financial information company, Bloomberg LP, and because such a donation would inevitably be considered a bizarre conflict of interest. Instead, he has tried the next best thing, recently calling on his friends in the private sector for cash, offering to rename public facilities in exchange for donations.

But no matter how many Staples libraries and Warner Bros. community centers we get, the bulk of the looming deficit will translate into budget cuts. And inevitably, the city's plans to scale back services in the wake of the terrorist attacks and the Internet bust will disproportionately affect the poor—and deepen the already monumental chasm between the city's haves and have-nots.

Consider the proposed reduction in pay planned for Sylvia Rosado, one of 3500 single parents (95 percent are mothers) who have been working in the parks department since reaching their five-year welfare-benefits limit. If the city follows through on a cost-cutting plan hatched in the final hours of the Giuliani administration, a first round of these workers, who were originally hired for renewable 50-week-per-year jobs with benefits, stand to have their pay lowered from $9.38 to $7.95 an hour at the end of this month. By entering into a federally funded contract with a private temp company that will pay workers the lesser wage and provide no benefits, the city is saving millions.

But to Rosado, a 27-year-old mother of three who works picking up trash in Harlem's Jackie Robinson Park, the cost of the cut would be almost incalculable. At the higher rate, her pretax salary adds up to $18,760 a year. With that, the parks worker now pays rent on her two-bedroom apartment in the Robert F. Wagner Houses on East 122nd Street; clothes and feeds herself, her unemployed boyfriend, and her three children; and covers carfare and take-out food for her family on the all-too-frequent occasions that Timberlee, her youngest, lands in the hospital for asthma treatments.

When the cut goes through some two weeks from now, she'll be out $2860 a year—more than she's ever had in her bank account. The shortfall will mean forgoing all the extras—"goodbye, couch," she says, referring to the sofa set she's paying for on layaway—as well as a deep cut into the basics, like her food budget.

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