Three Big Reasons why Middle Class is Leaving New York City
NEW YORK – December 24, 2018
According to analysts, large swaths of people are leaving New York City in numbers not seen since the Depression. Unfortunately, it is mainly the shrinking middle class that is now in full retreat, the New York Post reports.
The city is losing 100 residents a day — with departures exceeding new arrivals. Researchers see a few reasons for this decline.
First, relentless taxes lead to decades of sharp income erosion. Second is escalating living costs. And last but not least--wage reductions thanks to technological changes.
For example, of the estimated 175,000 net new private-sector jobs that have been created in New York City since 2017, fewer than 20% are paying middle- class salaries. Middle-class incomes are falling even faster in New York City than in other major US cities because of the city’s high — and rising — housing and other living costs, said Peter C. Earle, an economist at the American Institute for Economic Research.
Earle said that the rich in New York City are getting richer; the poor are actually getting richer too, but not rich enough to be middle class.
New York City’s middle class comprises 48% of city residents, with median annual incomes between $30,000 and $60,000.
31% earn lower incomes, and the ranks of the rich account for 21% of New York City residents.
By contrast, in the early 1970s, about 61% of New Yorkers were ensconced in the middle class; today, fewer than half are.
“The middle class is getting squeezed,” said Earle, noting the expansion in welfare and entitlement programs.
The persistent shrinking of the middle class nationwide — and especially in cities like New York — is evident in boarded-up retail stores, reflecting rising rents and slackening consumer demand, NYPost’s analysts concluded.