Has New York City Recovered From the 1970s? Average (Median) Income

In my prior post in this series, I showed that even during its late 1970s nadir the mean earnings of private sector workers who were working in New York City, and the per capita income of city residents, remained well above the U.S. average.  These are measures of mean income, just total earnings and income divided by employment and population, and are thus heavily influenced by the ever-increasing earnings and income of those at the top, mostly those who live and work in Manhattan.

In this post I will consider measures of median income and earnings.  That is the income or earnings of the middle person or household if all of them are ranked in order.  This measure is little influenced by the income of the rich, and determined primarily by the income of the typical person or household. What we find is that for typical New Yorkers outside Manhattan, the recovery from the 1970s (and 1960s) is far from complete.

For data such as income and poverty, the annual American Community Survey has replaced the long form of the Census of Population, which takes place every ten years.  The attached spreadsheet is a download of a summary of income and benefits data 2011, for the U.S., New York City, the New York metro area, and the boroughs.  The data to be discussed here is highlighted in bold.

ACS_11_1YR_Income

The data show that in 2011 the median household income of New York City residents was still 2.1% lower than the U.S. average.  New York as an economic social entity, rather than a political entity, is more than the just city.  It is the metro area as a whole.  The median household income for the New York metro area as a whole was 23.4% above the U.S. average.  So in general the city remains a somewhat poor part of a very affluent metro area, despite the fact that median household income is 31.3% above the U.S. average in Manhattan, and despite the fact that the highest-paid jobs are concentrated there.

Median household income remains 36.5% below the U.S. average in the Bronx.  And despite all the talk of gentrification, it remains 15.3% below the U.S. average in Brooklyn.  Median household income is 6.1% above the U.S. average in Queens, and 39.8% above average on Staten Island, still the richest borough for average people (based on per capita income, Manhattan is by far the richest for those at the top).

On one hand it is no surprise that New York City’s median household income is lower than the metro area average, because the city’s households tend to be smaller and younger.  Whereas families with two middle-aged workers account for a larger share of suburban households, young singles and couples are more common in the city.  Family households, which are groups of two or more related people living together, account for 66.2% of total U.S. households and 66.4% in the New York metro area as a whole, but just 60.2% in New York City.

New York City’s families, however, have particularly low median incomes compared with the U.S. average. The city’s median family income was 11.6% below the U.S. average in 2011, while that of the New York metro area as a whole was 22.1% above average.  The median family income of the Bronx was 40.3% below the U.S. average; for Brooklyn it was 20.4% below average.  Queens was about average, with Manhattan and Staten Island well above.

In contrast with its families, the median income of New York City’s non-family households, single people and roommates living together, was 23.2% more than the U.S. average in 2011.  That is about the same as the 27.0% above average for non-family households in the NY metro area as a whole.  Median non-family income was well above the U.S. average in every New York City but the Bronx.  In Manhattan, which had more non-family households than family households, the median income of non-family households was nearly double the U.S. average.

Some policy analysts have blamed the structure of the city’s economy, and the shortage of middle class jobs, for the relatively poor economic situation of the city’s families.  But the data shows otherwise.  The median work earnings per worker living in the New York metro area, according ACS data, was 23.2% above the U.S. average in 2011.  The median earnings of workers living in NYC was less than the metro area average, but still 9.0% above the U.S. average.  Median family income is relatively low in New York City because most middle income and affluent families in the metro area still live in the suburbs, and most low- and moderate-income families still live in city.  Even though the highest-paid jobs in the metro area are located within the city, specifically in Manhattan.

Looking more closely at earnings per worker, among those living in New York City the median for full-time, year-round male workers was $45,969 in 2011, or 2.3% lower than the U.S. average.  For full-time, year-round female workers the city’s median was $42,897, or 15.5% above the U.S. average.    The median earnings for those living in the metro area as a whole was higher than it was for those living in the city, at $55,701 for males and $46,642 for females, each well above the U.S. average.  Since the metro area data includes the city, the medians for the suburbs were higher still.

Cash pay isn’t the only component of total compensation, and it seems the ACS has added data on health insurance.  (Perhaps that is why the Republicans have proposed to eliminate the ACS).  The data show that while 77.5% of all employed U.S. workers had private health coverage in 2011, just 68.3% of employed workers who lived in New York City did.  Presumably that includes public employees, who nearly all have employer-provided private health insurance if they work for NYC, though many of those workers live in the suburbs.  For the New York metro area as a whole, 75.9% of employed workers had private health insurance, or just slightly less than the U.S. average.

So it isn’t that New York metro area workers are much less likely to have private health insurance than those in the U.S. as a whole, it is that those workers within the New York metro area who don’t have private health insurance are more likely to live in New York City.  The good news is that public coverage, more common in New York City than the U.S. as whole, reduces (but does not eliminate) that gap among the employed.  The ACS reports 17.9% of employed U.S. workers were uninsured, compared with just 16.6% in the NY metro area as a whole and 19.1% in New York City.

So New York City’s typical families have less money than the U.S. average, and its workers are less likely to receive health insurance than the U.S. average.  Was it always so?  Let’s look at the history, to the extent information is available.

When I was working at the Department of City Planning back in the early 1990s, in the transition from the Dinkins to Giuliani Administrations, I found myself with nothing to do for months and months.  The Dinkins people didn’t want anyone doing anything for a year during the election, to avoid controversy, and the Giuliani people were focused primarily on crime.  So I spent the time going through the old books from the U.S. Census Bureau and putting data in spreadsheets.  One example is this file – median household income from each decade’s census as far back as I could get it (with an ACS-based update for 2004).

CPHOUINC-1

As the immigrant gateway to the U.S., New York was historically a relatively low wage city, a city of rich and poor.  Low wage industries such as the garment industry located here because it was where the cheapest workers were available.  High wage high skill and capital-intensive manufacturing industries were generally located elsewhere.

But by the time of the city’s heyday, that had changed.  Census of Population data show that in 1949 (the 1950 Census, which asked about income the year before), the median household income for New York City was 17.3% above the U.S. average.  Among the boroughs that were above average were Brooklyn (20.3% above average), the Bronx (25.9%), Queens (45.7%) and Staten Island (31.5%).  While Fifth Avenue was Fifth Avenue and Park Avenue was Park Avenue, Manhattan was the poorest borough overall back then, with a median household income that was 10.4% below the U.S. average.

Income growth soared across the U.S. in the 1950s and 1960s, allowing the rest of the country to close the gap with – and then surpass – New York City.  The city’s median household income was just 6.5% above the U.S. average in 1959, with Manhattan 18.1% below average.

By 1969, before the 1970s recession and fiscal crisis even hit, New York City’s median household income was 9.5% below the U.S. average, and it was well below that average in the Bronx and Brooklyn.  Median household income was still 15.5% above the U.S. average in Queens, but it was 20.8% below the U.S. average in Manhattan.  This was the year when the number of private sector workers who were working in New York City was at the high point, one that would not be surpassed until 2012.  Despite the strength of the city’s economy, middle class and affluent workers were living elsewhere.

I couldn’t find median household income data for places (such as New York City) in the 1980 census books, only for counties.  But the borough data show how poor New York City was relative the national average in 1979, with Brooklyn’s median household income 29.2% below average, the Bronx 35.0% below, and Manhattan 17.4% below.  Only Staten Island has had a consistently above average median household income over the decades.

The city’s recovery began in Manhattan in the 1980s.  By 1989, according to 1990 Census of Population data, New York City’s median household income was only 0.8% below the U.S. average, primarily because Manhattan was 7.3% above average.  This despite the fact that a relatively large share of Manhattan households are single people and thus benefit from only one income, as opposed to family households which could have more than one income.

Now consider this.  In 1989, New York City’s median household income was 0.8% below the U.S. average, according to the Census (long form).  In 2011, according to American Community Survey data, NYC’s median household income was 2.1% below the U.S. average.  Despite all the talk of “gentrification” in NYC, and despite the “disappearance of the middle class” in the U.S. at large, there is almost no difference between those two figures.

Yes, young people have been moving here. And in contrast with the 1950s through the 1970s, when many unskilled adults moved to the city and ended up on public assistance, most of those moving here today are not poor, most are working are trying to find work, and many are college-educated.  But they don’t have a lot of money, at least not yet, and perhaps not ever.

The 2011 ACS data includes measures of mean and per capita income as well as median income.  And that data, like the BEA data cited in the previous post, shows New York City’s average income is significantly higher than the U.S. average, if lower that the New York metro area average.  The reason is there are so many very wealthy people in Manhattan, pulling the mean income up.  If mean income, as discussed in the previous post, is heavily influenced by the number of those at the top, and median household income is more indicative of the situation of those in the middle, the poverty rate shows the situation of those at the bottom.  The poverty rate will be the subject of the next post.

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