Tuesday, August 11, 2009

Congratulations, New York!

From City Journal:

According to the self-help adage, you can’t fix a problem until you first admit that you have it. So it should be of interest to New York policymakers that if you adjust census data for cost of living, Gotham is the poorest big city in America, though Detroit could gain that unwanted distinction when new data become available. And New York State, at least by one reckoning, is the poorest state, substantially worse off than the runner-up, Mississippi. Seriously.

Let’s begin with the city. Based on data from C2ER, a company that has been producing cost-of-living estimates for years, someone earning $50,798 in Chicago or $62,741 in Washington, D.C. enjoys the same standard of living as someone earning $100,000 in New York City. Not surprisingly, housing is the biggest factor. In Chicago, the cost of housing is 69 percent lower than in New York. In Washington, D.C., it’s 46 percent lower. Utility costs are also lower—29 percent in Chicago and 39 percent in Washington. So are groceries, by 28 percent in both cities. The result is that New York City residents have far less purchasing power than anyone seems to realize. (What applies to New York City also applies to its suburbs. A person earning $76,256 in Chicago has the same standard of living as someone earning $100,000 in New York’s Nassau County. Once again, housing is the main reason: its cost is 42 percent lower in Chicago than in Nassau.)

The next step is to apply these cost-of-living differentials to the most recent census estimates for per-capita income. This calculation yields a measurement of each city’s average standard of living. Once you crunch the numbers, you find that the real standard of living in Washington, D.C. is 118 percent higher than in New York City. In Chicago, it’s 75 percent higher.

There's more to this analysis here.


Lino said...

First off, thanks for the article, while I suspect it may have a hidden agenda, the stats are interesting.

As both a resident and business operator I can say without question that the real estste lobby has the single greatest effect on cost-of-living.

The term "rent poor' has long been used to describe Manhattan residents. Well, business owners are in the same boat.

The gutting of residential rent regulations during the Guiliani-Pataki era allowed landlords to do (ofter false) renovations and then charge whatever the market will bear. That "market" now packs 'em in. If anyone thinks that "barracks" conditions are peculiar to immigrant communities such as those in Queens..They ain't see what happens here in Manhattan with young people, often with good jobs must still crown 4-5-6 people into a 2bdrm just to make rent "affordable".

The lack of commercial rent regulation means that businesses that don't own their buildings live in fear of lease expiration. Years of hard work lost to landlord greed as rents triple, often quadruple just to sate a leech.

These costs ripple through every expense here in town. When I am in Queens I often go shopping for groceries at places where prices are %20-30 cheaper then here on the UES.

As former Green Party Mayoral candidate (and 8th grade teacher of mine) Tony Gronowicz said "landlords have become parasitic" -they are driving out what is left of the working-middle class.

Anonymous said...

Like the song says," If you can make it here you can make it anywhere,New York New York."

Anonymous said...

New York City has a high degree of income disparity. In 2005 the median household income in the wealthiest census tract was $188,697, while in the poorest it was $9,320. The disparity is driven by wage growth in high income brackets, while wages have stagnated for middle and lower income brackets.

Wikipedia : Demographics section of New York City.

So a person making $15,000 would only be making (after the numbers are crunched) $7,000 in chicago..

Essentially you get double in Chicago for what you get in New york.

Anonymous said...

Costs are a killer here--especially the cost of rents. They have been wrecking businesses for years and now they have made the city increasingly unaffordable for the native Blue Collar workers who have built this city for generations.

Anonymous said...

At least the drugs are cheap.

"Honest" Joe Crowley's Friend said...

I doin no watcha tookin abou. En mi cootry theek its realli fook up - here en Queens es good.

The stanand of leevin es vera hi.