2 Cents ON THE DOLLAR?

September 4, 2005
In Manhattan, Poor Make 2¢ for Each Dollar to the Rich
By SAM ROBERTS
Trump Tower on Fifth Avenue is only about 60 blocks from the Wagner Houses in East Harlem, but they might as well be light years apart. They epitomize the highest- and lowest-earning census tracts in Manhattan, where the disparity between rich and poor is now greater than in any other county in the country.

That finding, in an analysis conducted for The New York Times, dovetails with other new regional economic research, which identifies the Bronx as the poorest urban county in the country and suggests that the middle class in New York State is being depleted.

The top fifth of earners in Manhattan now make 52 times what the lowest fifth make - $365,826 compared with $7,047 - which is roughly comparable to the income disparity in Namibia, according to the Times analysis of 2000 census data. Put another way, for every dollar made by households in the top fifth of Manhattan earners, households in the bottom fifth made about 2 cents.

That represents a substantial widening of the income gap from previous years. In 1980, the top fifth of earners made 21 times what the bottom fifth made in Manhattan, which ranked 17th among the nation's counties in income disparity.

By 1990, Manhattan ranked second behind Kalawao County, Hawaii, a former leper colony with which it had little in common except for that signature grove of palm trees at the World Financial Center. The rich in Manhattan made 32 times the average of the poor then, or $174,486 versus $5,435.

The analysis was conducted for The Times by Dr. Andrew A. Beveridge, a sociology professor at Queens College of the City University of New York.

The growing disparity in Manhattan helped drive New York from 11th among cities with the biggest income disparities in 1980 to fifth in 1990 and fourth in 2000, behind Atlanta; Berkeley, Calif.; and Washington, according to the analysis. "The gains are all going to the top," Dr. Beveridge said. "It's a massive class disparity."

Last week, the Census Bureau reported that even as the economy grew around the nation, incomes stagnated and poverty rates rose. The Bronx, with a poverty rate of 30.6 percent, was outranked only by three border counties in Texas where living costs are lower.

Swollen, in part, by the earnings of commuters who work in New York City, median household income among the states was highest in New Jersey ($61,359) and Connecticut ($60,528). It was $47,349 in New York State, also above the national median.

A separate analysis, being released this weekend by the Fiscal Policy Institute in Albany, warns that the middle class is being depleted while the rich are getting richer and the poor are growing in number and barely getting by - more so in New York State and particularly upstate.

The loss of good-paying jobs, especially in manufacturing, "has meant that the 'hollowing out' of the middle of the income distribution continued at a rapid pace," the institute, a union-backed research group, concluded. It said the number of families earning between $35,000 and $150,000 declined by 50,000 from 2000 to 2003 while the number that earned above $150,000 and below $35,000 increased.

Dr. Mark Levitan, senior policy analyst for the Community Service Society, a liberal research and advocacy group, said he did not believe the city's economy was "uniquely weak," but said an increase in the poverty rate from 19 percent to 20.3 percent, as measured by the census's new American Community Survey, "is fundamentally a story about stagnant wages."

Edward Wolff, a New York University economist, attributed the growing disparity to ballooning Wall Street incomes and declining wages for lower skilled workers. "Though these forces are at work across the country," he said, "the heavy preponderance of corporate headquarters, the financial sector and the legal sector in New York City has made the increase in the ratio of income between the top and bottom quintile more extreme than in other parts of the country."

Jared Bernstein, senior economist at the liberal Economic Policy Institute, said the income gap, which in Manhattan has historically been large, can endure indefinitely.

"The elites, the top sliver of the income scale, can drive consumption and investment forward while the bottom half slogs along," he said. "If inequality had embedded within it its own seeds of destruction, it would implode sooner than later. But that doesn't appear to be the case. Many who have fallen behind have a skewed notion of their prospects for upward mobility."

Manhattan, he said, is "an amplified microcosm" of conditions elsewhere in the country.

The income gap in Manhattan was far wider than in any other county. In tiny Clay County, Georgia, which has only 1,355 households and ranked second, the rich, on average, made about 38 times what the poor made.

Compared with the poorest Manhattanites, those in the top fifth are disproportionately male, non-Hispanic white and married. Roughly equal proportions among rich and poor are immigrants, are employed by private profit-making companies and work in sales.

The lowest-income census tract in the city is a triangular patch of East Harlem east of First Avenue and north of East 119th Street, where, despite a hint of gentrification in a renovated brownstone or two, the neighborhood is dominated by the mammoth though generally well-tended public housing project called the Wagner Houses. The median household income there is $9,320, most of the residents are black or Hispanic and do not have high school degrees, 56 percent live below the poverty level and about one in 10 are foreign born.

Darryl Powell, a 43-year-old automobile mechanic, said that most were struggling just to get by. "They're trying to keep a roof over their head," he said. "People are trying to hold onto what they've got."

Sheila Estep said she was facing eviction because she was working as a full-time mother raising three sons rather than returning to her earlier jobs as an electrician, plumber and cosmetologist. "If I fail at my job, they'll fail at theirs," she said.

Sharon Hammond, who sells cosmetics, said she and other tenants wished their neighborhood were better and that she had a working stove instead of a temporary hotplate in her apartment, but added: "Everybody can't be rich."

Manhattan's highest-income census tract is a six-square-block rectangle bounded by Fifth and Park Avenues and East 56th and 59th Streets. The median household income in this mostly commercial section of East Midtown is $188,697 (average family income is $875,267); none of the residents identified themselves as black; nearly one-third have advanced degrees and more than one in three are foreign born. Even there, though, the poverty rate is 16 percent.

"The income gap, while supposedly increasing, seems to be a natural phenomenon," said the developer Donald J. Trump, who lives in Trump Tower. "Times have been good, but times have been good for many people and many classes of people. I think there is a very large middle class - but not in this section, by the way."



Copyright 2005 The New York Times Company