Wages not increasing enough to make NYC affordable for most

From Epoch Times:

A shortage of talent for mid-skill jobs in New York City is linked to low wages and an inadequate education system, experts say.

A mid-skill job is one that requires a high school diploma and a post-school certificate, but not necessarily a four-year degree—for example, many technology, health care, and trades jobs.

“Tech in particular, while growing, is not at levels of mid-tier cities like Seattle and Austin due to higher cost of living,” said Jessica Walker, president of the Manhattan Chamber of Commerce, in an email. “So figuring out how people in tech, health care, and business and finance can live with families in NYC and the state is important.”

The shortage of talent prompted job search website Indeed.com to dig into its vast database for answers.

A big problem in New York City is labor market polarization, or “a hollowing out of middle wage jobs,” said Daniel Culbertson, an economist at Indeed.com.

The company separated its job database into 800 different categories, then ran the data through two filters: The first was whether a wage had kept pace with inflation, and the second was whether a wage was higher than the unadjusted median amount for that job in the year 2000.

Only 35 percent of New York City jobs made it through the filters.

The origin of talent shortage lies in the education system, said Allison Armour-Garb, senior fellow at Public Policy Institute of New York State.

In New York City, only 35 percent of high school graduates are college-ready, she said, and at least 50 percent of students have to take at least one remedial class when entering college.

The city spends more than $70 million on remediation classes at CUNY alone, Armour-Garb said. “[We’re] paying millions for material they should have already mastered in high school.”

A different Hallet's Point perspective

From DNA Info:

City officials celebrated the start of construction on the Hallets Point project Thursday, hailing the future development as a means of transforming the isolated Astoria waterfront.

The development, to be built by The Durst Organization and Lincoln Equities, will bring 2,400 new apartments to the Hallets peninsula, a parcel of land on the East River south of Astoria Park that officials describe as largely cut off from the rest of the neighborhood.

The area is home to the Astoria Houses but is otherwise mainly industrial, lacking in retail options and — with the exception of a baseball field — public green space.

"A community that’s not only underutilized, but a locked waterfront," City Councilman Costa Constantinides said. "This project changes the entire paradigm here."

It certainly does.

We can dream, can't we?

From the Daily News:

The hammering of New York’s working and middle classes is reaching emergency proportions.

While the state and city economies are modestly creating jobs, paychecks are stagnating or worse — with all too many New Yorkers facing a diminished standard of living for themselves and their children.

A Wall Street Journal analysis found that average incomes declined over the past decade in wide swaths of the United States — including in the heart of working New York City.

In Brooklyn, the average annual paycheck, when adjusted for inflation, stood at $43,724 in 2004. By 2013, it had shriveled to just $39,959 — a devastating 8.6% drop.

In Queens, the inflation-adjusted average lost 5.7% over those 10 years, falling from $49,050 to $46,238. In Staten Island, the average shrank 5.1%, from $44,189 to $41,917.

Huge forces are at work. Among them are the loss of manufacturing jobs due to globalization and automation, health-care costs that take an ever-bigger bite out of employers’ budgets and the concentration of job growth in low-paying sectors like retail and home health care.

The only solution: robust economic growth.

What’s called for is an aggressive push to roll back the high taxes and onerous regulations that make New York one of the least business-friendly states in the country.

To invest in roads, mass transit and other infrastructure that would create jobs while catalyzing future growth.

To demand far better performance from schools — so they send out graduates prepared for college and careers, especially in science, technology, engineering and math.

And more — much, much more.

Middle class blacks are leaving

From the Daily News:

The city's black middle-class population is receding, according to a study.

The report, prepared by the nonprofit Citizens Housing and Planning Council, showed that the black middle class declined 18%, as the black population dropped across the city by 5%.

Once solidly middle-class strongholds in Hollis and Jamaica, Queens; East Flatbush, Brooklyn; and Woodlawn, the Bronx, had significantly fewer middle- and upper-income black families in 2010 than they did in 2000, and significantly more low-income families, the study reported.

In Hollis, longtime residents said they had felt the change.

“All of our neighbors have left,” said Peyton Smith, 81, who’s lived on 205th St. since he bought the corner house at 109th Ave. in 1965 for $23,000.

Smith said his neighbors have largely have packed up and left town in the past 10 years, pushed out by rising property tax rates.

Most have headed back to the South, Smith said, where many like himself hail from originally.

“We’ve had brand-new neighbors for the last 10 years,” he said.

Other residents said that after the foreclosure crisis, real estate agents and speculators descended on the community, buying up houses and splitting single-family homes into two or three units.

We’ve had brand-new neighbors for the last 10 years.

“Every day, you see people stopping you, or putting things in your mailbox, wanting to buy your house,” said Winston Byndloss, 73, who moved up the block from Smith in 1978.

“How they cut them down nobody knows. I would love to see what size the bedrooms are.”

Good jobs sit out there unfilled

From Crains:

Thousands of New York City health care and technology jobs that require middle-level skills could be filled if companies embrace an employer-led, sector-based workforce development initiative, according to an analysis by JPMorgan Chase.

The financial powerhouse crunched data on the misalignment of jobs and skills in the two sectors as part of a five-year, $250 million New Skills at Work initiative. Among the findings: About 45% of all open job postings listed in the city between July 2013 and June 2014 were middle-skill jobs in health care and information technology.

Those health care postings go unfilled for more than a month, compared with a few weeks for entry-level positions. Analysts estimated there will be 44,000 new job openings annually for middle-skill workers in the city over the next five years.

The health care and technology sectors both have a strong concentration of high-demand, high-growth, middle-skill occupations. There are about 423,000 health care workers in the city, with a projected 14% growth rate over the next five years. In the technology sector, middle-skill jobs account for 16% of all of middle-skill job postings in the city, or about 8,100 jobs.

Maybe if middle class residents weren't taxed to death and had housing they could afford, they'd fill these jobs faster.

Duh.

DeBlasio will continue to rely on the rich

From the Daily News:

Mayor de Blasio has his work cut out for him if he really wants to end New York’s “tale of two cities.” Gotham has become the American capital of a national and even international trend toward greater income inequality and declining social mobility.

There are things the new mayor can do to help, but the early signs aren’t promising that he will be able to reverse 30 years of the hollowing out of the city’s once vibrant middle class.

As the cost of living has skyrocketed while pay has stagnated except for those at the very top, New York has shifted from a place people go to make it to a place for those who already have it made, or whose families have.

And once here, the rich are indeed getting richer even as the rest of the city is barely holding on.

Between 1990 and 2010, the city’s 1% saw their median income shoot up from $452,415 to $716,625 in 2010 dollars, even as the bottom 60% hardly saw their incomes budge at all, according to a recent City University study. The trend precedes Michael Bloomberg, the billionaire mayor who envisioned New York as a “luxury city,” and it won’t be easy for de Blasio to reverse — especially as he rolls out pricey new public-employee contracts and programs like universal pre-K that further expand the city’s dependence on its wealthiest citizens.

Rather than forge a more upwardly mobile society, New York epitomizes what Citigroup researchers have labeled a “plutonomy,” an economy and society driven largely by the investment behavior and spending of the uber-rich. This creates great demand for low-end service workers — dog-walkers, baristas and waiters — but not much for New York’s middle or aspiring middle class.

Adjusting for the cost of living here, the average paycheck in New York is one of the lowest of any major metropolitan area. Put otherwise, working New Yorkers pay a huge premium to live in the five boroughs, one that repels middle-class individuals and families who aren’t compelled to be here.

The exodus of the middle class has been ongoing for 30 years, with New York by one measure now having the second lowest share of middle-income neighborhoods of America’s 100 largest cities.As the middle class has waned, even exemplars of the celebrated creative class — musicians, artists, writers — find the going increasingly rough, and unrewarding. Laments rock icon Patti Smith: “New York has closed itself off to the young and the struggling. New York City has been taken away from you.”

Certainly some middle class jobs could be created by boosting such things as the port and logistics, resuscitating industries such as food processing and specialized household goods, and rolling out policies that encourage, rather than overregulate, smaller firms in the business-service industry.

But de Blasio’s press to bring in more tax revenue to pay for ambitious new programs, more generous social services and new contracts for city workers have the perverse effect of doubling down on Bloomberg’s bet on the wealthy.

His ambitious ramping up of green-energy policy could be the straw that breaks the back of what remains of the logistics and manufacturing industries in New York, something that has already occurred in California.

And his kowtowing to the teachers union and attempted assaults on charter schools threaten to further undermine the effectiveness of public education, something vital to middle and working class residents.

In fact, the effect of de Blasio’s policies may turn out to be more neo-Victorian than progressive. Rather than new homeowners, the city may see a greater concentration of people dependent on government largesse.

Prepare to be blockbusted

From the Daily News:

The City plans to attack economic segregation in its affordable housing plan — placing the poor in middle-class neighborhoods and the more affluent in high-poverty spots.

Housing Preservation and Development Commissioner Vicki Been said the plan to build 80,000 new affordable apartments and preserve 120,000 units would create a more diverse city.

“We really have to make economic diversity a cornerstone of that plan,” she said at a City Council budget hearing Wednesday.

“That means that in some neighborhoods that have mostly middle or upper-income housing, that we would need to put affordable housing at the very lowest income,” she said.

“But in some communities where we have a great deal of poverty . . . we would try to bring more moderate (-income housing) into those neighborhoods, to try to achieve the kind of diversity that we want,” Been said.

Quinn, the developers' handmaiden

From the NY Times:

A centerpiece of Christine C. Quinn’s plan to keep housing affordable in New York City is a variation on a proposed tax subsidy for landlords that Mayor Michael R. Bloomberg forcefully rejected two years ago as an unacceptably generous giveaway to the real estate industry.

Aides to Ms. Quinn, the speaker of the City Council and a leading Democratic candidate for mayor, acknowledged that the idea had come from the city’s real estate industry, one of Ms. Quinn’s closest allies and biggest campaign donors.

But, the aides said, Ms. Quinn had altered the proposal in important ways since it was heavily criticized by the Bloomberg administration, and predicted that it could, over time, preserve the dwindling supply of apartments that are within reach of the city’s middle-class families.

She unveiled the plan in her State of the City speech on Monday.

The measure and its origins highlight a recurring tension in Ms. Quinn’s rise to political power, between her passion as a former housing activist for liberal causes and her growing willingness to work with the corporate interests that control the levers of power in the city.

City developers and landlords, led by their powerful trade group, the Real Estate Board of New York, have long sought a real estate tax cap, which would guarantee them a discounted and predictable long-term tax bill in return for renting out some apartments at below-market rates.

Which still won't make them affordable enough.

Quinn makes City unlivable then spends tax money to fix it

From DNA Info:

City Council Speaker Christine Quinn vowed to build 40,000 affordable, middle-class apartments over the next 10 years during her final State of the City speech as speaker Monday.

Quinn, who is widely expected to officially launch her bid for mayor soon, described the initiative — which was one of a series designed to bolster the city's middle class — as “the biggest commitment to middle class affordability that this city has seen in two generations."

“We face an affordability crisis in our city,” Quinn told the audience gathered in the City Council chambers. “We need to make sure that the people who want to stay in our great city can afford to stay.”

Quinn said she would pay for the effort through a combination of government efficiencies and more debt, arguing that borrowing was "the right move at the right time" because of record-low interest rates.

“This is a once-in-a-lifetime opportunity to invest in our middle class,” she said.

Who pushed through the rezonings that caused the City to become even more unaffordable to the middle class?

You did. Didya think we forgot about that?

End of the coastal lifestyle?

From the NY Times:

New York and New Jersey residents, just coming to grips with the enormous costs of repairing homes damaged or destroyed by Hurricane Sandy, will soon face another financial blow: soaring flood insurance rates and heightened standards for rebuilding that threaten to make seaside living, once and for all, a luxury only the wealthy can afford.

Homeowners in storm-damaged coastal areas who had flood insurance — and many more who did not, but will now be required to — will face premium increases of as much as 20 percent or 25 percent per year beginning in January, under legislation enacted in July to shore up the debt-ridden National Flood Insurance Program. The yearly increases will add hundreds, even thousands, of dollars to homeowners’ annual bills.

The higher premiums, coupled with expensive requirements for homes being rebuilt within newly mapped flood hazard zones, which will take into account the storm’s vast reach, pose a serious threat to middle-class and lower-income enclaves. In Queens, on Staten Island, on Long Island and at the Jersey Shore, many families have clung fast to a modest coastal lifestyle, often passing bungalows or small Victorian homes down through generations, even as development turned other places into playgrounds for the well-to-do.

While many homeowners are beginning to rebuild without any thought to future costs, the changes could propel a demographic shift along the Northeast Coast, even in places spared by the storm, according to federal officials, insurance industry executives and regional development experts. Ronald Schiffman, a former member of the New York City Planning Commission, said that barring intervention by Congress or the states, there would be “a massive displacement of low-income families from their historic communities.”

Only rich or poor will be left in NYC

From the NY Times:

The wealthiest 1 percent of New York City residents took in nearly one-third of the personal income in the city in 2009 — almost double the comparable proportion nationwide, a new study shows.

In a report scheduled to be released on Monday, the city comptroller’s office found that large percentages of New Yorkers earned high incomes and low incomes, leaving a smaller middle class than in the nation as a whole.

The report analyzed tax filings by city residents for income earned from 2000 through 2009, the most recent data available, and compared them with the national numbers. All of the numbers were adjusted for inflation.

The most striking difference between New York and the rest of the United States, the report showed, was the concentration of earning power at the high end.

In 2009, nearly 15,000 filers reported adjusted gross income of $1 million or more. They accounted for less than half of 1 percent of the total number of filers, but they took in 26.7 percent of the income in the city. Nationally, people who earned at least $1 million in 2009 collected less than 10 percent of all the income.

The comptroller’s report also revealed that New York had a smaller bulge in its middle than the rest of the country. Nationally, about 31 percent of filers earned $50,000 to $200,000, and they took in 52 percent of all the personal income in the country. In New York, just 28 percent of filers fell into that income bracket, and they collected only 36 percent of all the personal income in the city.

Globalism hurting American workers

From The Business Insider:

The 22 statistics detailed here prove beyond a shadow of a doubt that the middle class is being systematically wiped out of existence in America.

The rich are getting richer and the poor are getting poorer at a staggering rate. Once upon a time, the United States had the largest and most prosperous middle class in the history of the world, but now that is changing at a blinding pace.

So why are we witnessing such fundamental changes? Well, the globalism and "free trade" that our politicians and business leaders insisted would be so good for us have had some rather nasty side effects. It turns out that they didn't tell us that the "global economy" would mean that middle class American workers would eventually have to directly compete for jobs with people on the other side of the world where there is no minimum wage and very few regulations. The big global corporations have greatly benefited by exploiting third world labor pools over the last several decades, but middle class American workers have increasingly found things to be very tough.

Click the link to read the scary stats...

The outer boroughs are NYC's future

From Newsweek:

New Yorkers have long had an outsize view of their city; historically, its mayors have touted mottos that encouraged that view, from Rudy Giuliani's "capital of the world" to Mike Bloomberg's "luxury city." But as Bloomberg begins his new term, New York needs to reexamine its core economic strategy.

The city cannot simply rely on inertia and the disbursements of Wall Street megabonuses to save its economy. Instead, it needs to rebuild its middle-class neighborhoods and diversify toward a wide range of industries that can capitalize on the city's unique advantages—including its appeal to immigrants; the port; and its leadership in design, culture, and high-end professional services.

It's also time to get rid of the Sex and the City image and start making New York a city where people can have both sex and children. This will become more important as the millennial generation enters its late 20s and early 30s later this decade. This is when many young migrants to the city, including upwardly mobile immigrants, typically become ex–New Yorkers.

Despite all the "back to the city" hype, New York over the past decade suffered one of the highest rates of out-migration of any region in the country. Young singles may come to New York, but many leave as they get older and have families. An analysis by the city controller's office in 2005 found that people leaving the city were three times more likely to have children than those arriving.

If New York is to thrive, it will need to keep more of these largely middle-class families. To do that, it needs to diversify its economy beyond Wall Street, which in 2007 provided roughly 35 percent of all income earned in the city. Since the recession, the city has lost 40,000 financial-service jobs, but the industry has been quietly downsizing for years: over the past two decades, more than 100,000 financial-services jobs have disappeared from New York. In good years, financial services provided an enormous cash engine, but it can no longer provide enough jobs. According to an analysis by the Praxis Strategy Group, finance now accounts for barely one in eight jobs in New York City. Most job growth has come instead in lower-paying professions like health care and tourism.

To become economically sustainable, New York needs to create policies that help encourage development in areas where its less wealthy citizens live. Most outsiders identify New York almost exclusively with Manhattan, yet roughly three out of four New Yorkers actually live in the outer boroughs: Queens, Brooklyn, Staten Island, and the Bronx. Neighborhoods like Bay Ridge, Whitestone, Flatbush, Howard Beach, and Middle Village are really New York's middle-class bastions.

Over the past decade, these communities have provided a critical middle ground between the bifurcated Bloombergian "luxury city" with its high-end enclaves and the many distressed neighborhoods throughout the city. Although the mayor, some urbanists, and many developers would like to make these middle-class enclaves ever denser, their very appeal often lies in their moderate scale, proximity to work areas, decent schools, and parks. Those attributes hold sway, even in a recession. "Brand- new and expensive places have not held up as well as the established family neighborhoods," says Jonathan Bowles, director of the New York–based Center for an Urban Future.

Nurturing these neighborhoods will require a distinct shift in public policy. During the Bloomberg years the big subsidies have gone to luxury condo megadevelopments, sports stadiums, or huge office complexes.

It's time to cut the bloat

From the Neighborhood Retail Alliance:

Just when most Americans-or at least the "working families" who toil away on behalf of the government-are getting fed up feeding the pig, along comes Professor Matthew Dallek in this morning's NY Daily News to instruct us that we need to get over our aversion to being taxed: "Americans have not always hated taxes. The marginal tax rate was approximately 90% for the wealthiest Americans during World War II, but 85% to 90% of the public still described their tax rate as fair. In the mid-20th century, new payroll taxes were enacted to help pay for Social Security and Medicare, while federal taxes helped fund the Interstate Highway System, strengthened research and education at America's premier public universities and built the world's most powerful military."

It's as if Dallek hasn't been awake and aware for the past decade as NY City and NY State have borrowed us into an unsustainable debt - as Nicole Gelinas points out in the NY Post this morning. Or as more and more middle class Americans and small business owners have been forced to fork over more and more of their income in order to maintain - not vital services or infrastructure improvement - but a bloated state bureaucracy.

He's just like one of us! (Part 5)

Bad news for Bloomberg?

GOPers may vote Bloomy off the Island
by David Seifman, NY Post

IF there's one place where Mayor Bloomberg shouldn't have to worry about winning votes it's Staten Island, where more than seven out of 10 people who went to the polls in both 2001 and 2005 pulled the lever for Bloomberg.

But some Republican leaders say the mayor had better be concerned because there's a surprising backlash brewing among his middle-class base.

"People feel they're getting nickel-and-dimed to death," said one veteran Republican official. "They're upset about higher property taxes, higher water bills, traffic tickets. They might just stay home [on Election Day]."

The mayor's abandonment of the Republican Party during his flirtation with a presidential run didn't go unnoticed.

Over the summer, the official said, campaign workers rounding up signatures on Bloomberg's GOP petitions ran into resistance.

"People would sign for other politicians, but not Bloomberg," the official recalled.

Although it represents less than 10 percent of the vote citywide, Staten Island proved critical to Bloomberg in 2001, when he narrowly lost Manhattan, Brooklyn and The Bronx to Democrat Mark Green and became mayor thanks to large margins in Queens and Staten Island.

How Bloomberg relates to Queens homeowners

From the Daily News:

Maybe this is Mayor Bloomberg's plan to out help middle-class homeowners.

Hizzoner wanted a blue-collar house in Queens for his newest TV ad - and paid an eye-popping Manhattan rent to use it Thursday for just seven hours.

Bloomberg's campaign shelled out $3,000 to a Forest Hills homeowner to shoot scenes in the garage, living room and bathroom of his 2-1/2-story, single-family residence on a tree-lined block.

The mayor was a no-show.

Middle class treats Bloomberg like an alien

From Politicker NY:

At the moment, New Yorkers are watching a new campaign ad for Mr. Bloomberg currently in heavy rotation on seemingly every television channel, depicting a mayor who works for the “benefit of middle-class families” just like the one he comes from.

“The middle-class issue is clearly his greatest vulnerability,” said Jonathan Bowles, the director of the Center for an Urban Future and the co-author of the February study “Reviving the Middle Class Dream in NYC.” “You can grasp that just by looking at his campaign materials. He has become the middle-class candidate, which is kind of funny because he certainly hasn’t been the mayor of the middle class.”

City Councilman Jimmy Oddo, marching a few feet behind the mayor, with a wooden baseball bat resting on his shoulder, said, “There was a lot of antipathy on Staten Island to his administration after the property tax votes. But look at him, when he comes here, he’s treated like a conquering hero.”

Actually, they treat him like an alien. But they have determined that he is an alien they must live with. At times, Mr. Bloomberg marched alone, and he looked absolutely flummoxed when Mr. Oddo pinched his stomach, approving of his weight loss.

Middle class leaving in droves

From the NY Post:

New York City's 700,000 middle class families are being squeezed as never before, and they are leaving.

Although their earnings are far higher than the US middle-class average, their cost of living expenses far exceed the national average.

A family of four in the five boroughs is considered middle class with a median income of $105,000, and the figure for a single is $67,500, according to the Drum Major Institute.

As most city residents know, the city is far more expensive to live in than any other US city. A NYC household earning $80,000 would not have the comforts of living; in fact it would barely cover basic needs.

The city's middle class wealth is tied to home values, yet the average home sale price in New York City dropped 22 percent in the last year, according to the Real Estate Board of New York.

The outer boroughs have lost more than 40,000 families where a member held a bachelor's degree - a factor in determining middle-class status, in 2007, according to the Center for an Urban Future.

More than 151,000 middle-class residents left the city in 2006 alone, according to the study. Many have opted to take the much longer commute from the Poconos or Philadelphia in order to live middle-class lives.

A reader says goodbye to Queens

"My ancestor first came to Queens in the early 1600's as an indentured servant, hoping for a better life. Generations have worked its soil on small farms. Family members have left to go to war from Queens, some never to return. Others have survived circumstances like the Great Depression. One was the sheriff of a small Queens town before there was an NYPD, and others were volunteer firemen before there was a FDNY. Still other family members have served the city well as bus drivers and token clerks. All have been homeowners and proud to be living here. But we have always been middle class, and because of that we can no longer afford to live in Queens. It seems vultures have tightened their circle over my house. The city tow truck driver visits my block in the wee hours of the morning hoping to find an expired registration sticker. Every day two traffic agent cars wait two blocks away for the clock to strike eleven and race to give tickets to those unfortunate to have forgotten to move their cars for alternate side of the street parking. The sanitation police make their rounds waiting for a piece of garbage to blow within fifteen feet of my property. The cops wait on the train station for people to spit so they can give out a ticket. And the patrol cars go up and down Northern Blvd., stopping cars to give out tickets. Middle class, a blessing and a curse? Too well off to humbly ask for assistance, too poor to be able to weather this storm and pay higher prices and taxes. Where did we go wrong? Maybe we should have divided up our house and rented it illegally like most of the other houses have done on my block. That seems to be the only thing you can get away with these days. Like my ancestors, I too have taken pride in working the soil. I have enjoyed working in my small garden for over forty years. I like to feel the soil in my hands, and reap its harvest. But it is this garden that I must now leave because I can no longer afford to live here in Queens.

A very sad farewell.

Denise