New York City remains the domain of the 1 percent (or, more precisely, the top 10 percent of the top 1 percent), according to a new study by the city’s Independent Budget Office that shows that the pretax earnings of the city’s richest residents represented 24 percent of income in the entire city. Looking at 2014, the most recent year that final data was available, the IBO found that the entire top 1 percent took home a total of 40.5 percent of the city’s paychecks, while the lowest 50 percent of earners in New York City took home just 5.6 percent of all income.
“Over the years 2006 to 2014, we can see evidence of growing income inequality in the city,” said Doug Turetsky, chief of staff and communications director for the IBO. “The share of income going to New York City’s highest earners, the top 1 percent — and even more specifically, the top tenth of a percent — has grown. At the same time, the share of income going to the city’s bottom 50 percent has fallen.”
The study found that the bottom 50 percent of income tax filers had their median income drop from $14,153 in 2006 to $12,360 in 2014. At the same time, the share of wealth garnered by the city’s top 1 percent has recovered steadily from a huge dive following the 2008 global financial meltdown. The share going to the top 1 percent topped out at 45.9 percent in 2007.
According to the study, $28.6 billion more are now flowing into the bank accounts of the top 10 percent of earners as compared to 2006.
Mayor Bill de Blasio swept into office in 2013 on a platform of “A Tale of Two Cities,” one rich and one poor, which resonated with New Yorkers seeing the manifestations of this widening inequality in the shape of massive, empty condos for the wealthy; widespread gentrification; and skyrocketing rents. The report covers de Blasio’s first year in office, although many of his programs aimed at decreasing this widening inequality wouldn’t have had time to make much of an impact by then, if the mayor can change inequality much at all.
“Mayors have a limited tool kit when it comes to addressing issues of income distribution, especially in the short term,” Turetsky said. “But Mayor de Blasio has reached for several of them, including the spearheading of legislation for paid sick leave, advocating for the increase in the state minimum wage to $15, and expanding the availability of pre-K for all four-year-olds.”
Earlier this year, de Blasio pushed the state to adopt a “mansion tax,” which would have put a 2.5 percent levy on home purchases worth $2 million or more. That tax idea was summarily squashed by Governor Andrew Cuomo, who said it “never went anywhere.”
Despite a setback in 2008, the gilded city appears to be finally complete.