Just thought youse guys should know what's going on out here these days
January 25, 2006
As Manhattan Booms, Inflation Squeezes Rest of New York
By JENNIFER STEINHAUER
As the pay and purchasing power of Manhattan residents have moved higher and higher, incomes in all four of the boroughs outside Manhattan have trailed inflation over the last few years, in a stark example of the increasing income disparity in New York City. In terms of wages, Manhattan families are doing better on average than those in the rest of the nation, while families in the four other boroughs are doing worse.
http://www.nytimes.com/2006/01/25/nyregion/25wages.html
In Manhattan, real wages - earnings adjusted for inflation - rose 5.4 percent between the first quarters of 2002 and 2005, led by the finance and information industries, while the national average was flat.
Soaring year-end bonuses seemed to play a major role in the Manhattan increase. Economists generally look on first-quarter results as providing the best indicators of trends.
But in the rest of the city, those wages fell at least 2.9 percent, according to the Bureau of Labor Statistics. The drop was biggest on Staten Island at 8.3 percent, although that figure may be more volatile because that borough has the smallest population in New York City.
Real wages are one of the best indicators of how people are doing financially. Driving the buying power of these wages down, it appears, is inflation. There is also an absence of serious upward pressure on wages in most industries, especially those that employ the lowest earners. The number of both high- and low-wage jobs has grown, but there is little mobility between the two.
Stories of financial frustration abound in the boroughs outside Manhattan.
Joshua Henderson, who is 29 and works in Queens as a case manager for a welfare-to-work company, said his salary had gone up about $10,000 since he left his former teaching job.
But a rise in rent on his apartment in Crown Heights, Brooklyn - to $950 a month from $850 - and increases in telephone, cellphone and utility costs have eaten up much of his salary increase, he said.
Mr. Henderson feels "priced out of Brooklyn, where I was born and bred," he said, adding: "I feel disgusted. I feel like the 'Sex and the City' set has taken over, spending most of their money on rents, which puts pressure on the rest of us."
Limits on opportunity have also contributed to the trend toward lower real wages. Low-skilled workers - many of them immigrants - now tend to get the lowest-paying jobs in the market, like restaurant jobs, in contrast to unskilled laborers of the past, who often found work in manufacturing, shipping and other industries that offered benefits and a chance for advancement.
"The typical jobs for immigrants with health benefits and union benefits don't exist anymore," said Frank J. Franz, president of the Belmont Small Business Association in the Bronx.
"My father had no skills at all, but he worked in a paper manufacturing plant on Bruckner Boulevard and ended up at the post office, bought a house, sent us to Fordham, and threw my sister a big wedding," he said. "You think a guy who works at a post office now who has a wife who doesn't work can send a kid to Fordham University today?"
New data compiled by the federal government suggests that New Yorkers who work outside Manhattan are being increasingly squeezed by inflation and slow wage growth - the bookends of economic struggle. And while inflation may vary somewhat from borough to borough, economists say that those variations do not affect the overall trend.
"There are two dynamics at work," said Michael L. Dolfman, the regional commissioner of the Bureau of Labor Statistics in New York. "You had, in all boroughs except Manhattan, increases in wages and salaries that were less than in the rest of the country but inflation being greater. And this has had a significant impact on the purchasing power of people who live in the city."
Workers who toil in Manhattan but who live in the four other boroughs may be earning more than those working in Brooklyn, Queens, Staten Island and the Bronx, Mr. Dolfman said, but their wages would not change the data, because by and large those earners tend not to have the highest-earning jobs in Manhattan.
To be sure, most workers in New York City benefited from the economic boom of the 1990's, and the recovery after a recession in 2001. From 1996 to 2005, the real wages of Manhattan workers grew almost 40 percent, and grew 2.5 percent in Queens and Staten Island. They were flat in the Bronx and fell 1 percent in Brooklyn.
But while prices have risen on health care and education around the country in recent years, and housing prices in major cities have also soared, inflation has hit harder in New York in other areas.
The Consumer Price Index rose 24 percent from 1996 to 2005 nationwide but grew 27.6 percent in every borough of New York. In the last three years, New Yorkers saw fuel prices rise 27 percent, while they grew 19 percent nationwide. And while the housing prices rose 8.4 percent nationwide, they went up 14.7 percent in New York. At the same time, benefits have decreased in many professions.
"My salary has gone up 40 percent over the last several years because I have had several promotions," said Loreto Porte, a professor at Hostos Community College in the Bronx who lives in Queens. "But my expenses have gone up 50 percent. We have lost health benefits." She said that the electricity bill for her house had climbed, adding: "Property taxes have gone up. It's everything."
While Manhattan workers were not impervious to inflation, their wages helped shield its blow. Indeed, the number of families in Manhattan earning more than $200,000 a year rose almost 20 percent from 2002 to 2004 alone, according to the Federal Bureau of Labor Statistics.
Economists are divided on what this data means. Some say that rising tides still lift all economic boats, even if some of those are actually ships with giant lido decks and an open bar while others remain dinghies bobbing precariously.
They argue that low crime, which has led to soaring real estate prices, has helped improve nearly every corner of the city.
"The tangible C.P.I. and income is good summary measure," said Jason Bram, an economist at the Federal Reserve Bank of New York. "But then you have to ask, if you take a family in Bushwick and you look at them and their income in mid-90's and now it is this much higher but prices have gone up more than their average in income. The next question you have to ask is does that fully capture their quality of life."
"Because," Mr. Bram continued, "one statistic that really strikes me is that in the poorest neighborhoods the rate of crime and other indicators like abandoned houses have improved more dramatically than in New York City as a whole."
Copyright 2006The New York Times Company Home Privacy Policy Search Corrections XML Help Contact Us Work for Us Site Map Back to Top
As Manhattan Booms, Inflation Squeezes Rest of New York
By JENNIFER STEINHAUER
As the pay and purchasing power of Manhattan residents have moved higher and higher, incomes in all four of the boroughs outside Manhattan have trailed inflation over the last few years, in a stark example of the increasing income disparity in New York City. In terms of wages, Manhattan families are doing better on average than those in the rest of the nation, while families in the four other boroughs are doing worse.
http://www.nytimes.com/2006/01/25/nyregion/25wages.html
In Manhattan, real wages - earnings adjusted for inflation - rose 5.4 percent between the first quarters of 2002 and 2005, led by the finance and information industries, while the national average was flat.
Soaring year-end bonuses seemed to play a major role in the Manhattan increase. Economists generally look on first-quarter results as providing the best indicators of trends.
But in the rest of the city, those wages fell at least 2.9 percent, according to the Bureau of Labor Statistics. The drop was biggest on Staten Island at 8.3 percent, although that figure may be more volatile because that borough has the smallest population in New York City.
Real wages are one of the best indicators of how people are doing financially. Driving the buying power of these wages down, it appears, is inflation. There is also an absence of serious upward pressure on wages in most industries, especially those that employ the lowest earners. The number of both high- and low-wage jobs has grown, but there is little mobility between the two.
Stories of financial frustration abound in the boroughs outside Manhattan.
Joshua Henderson, who is 29 and works in Queens as a case manager for a welfare-to-work company, said his salary had gone up about $10,000 since he left his former teaching job.
But a rise in rent on his apartment in Crown Heights, Brooklyn - to $950 a month from $850 - and increases in telephone, cellphone and utility costs have eaten up much of his salary increase, he said.
Mr. Henderson feels "priced out of Brooklyn, where I was born and bred," he said, adding: "I feel disgusted. I feel like the 'Sex and the City' set has taken over, spending most of their money on rents, which puts pressure on the rest of us."
Limits on opportunity have also contributed to the trend toward lower real wages. Low-skilled workers - many of them immigrants - now tend to get the lowest-paying jobs in the market, like restaurant jobs, in contrast to unskilled laborers of the past, who often found work in manufacturing, shipping and other industries that offered benefits and a chance for advancement.
"The typical jobs for immigrants with health benefits and union benefits don't exist anymore," said Frank J. Franz, president of the Belmont Small Business Association in the Bronx.
"My father had no skills at all, but he worked in a paper manufacturing plant on Bruckner Boulevard and ended up at the post office, bought a house, sent us to Fordham, and threw my sister a big wedding," he said. "You think a guy who works at a post office now who has a wife who doesn't work can send a kid to Fordham University today?"
New data compiled by the federal government suggests that New Yorkers who work outside Manhattan are being increasingly squeezed by inflation and slow wage growth - the bookends of economic struggle. And while inflation may vary somewhat from borough to borough, economists say that those variations do not affect the overall trend.
"There are two dynamics at work," said Michael L. Dolfman, the regional commissioner of the Bureau of Labor Statistics in New York. "You had, in all boroughs except Manhattan, increases in wages and salaries that were less than in the rest of the country but inflation being greater. And this has had a significant impact on the purchasing power of people who live in the city."
Workers who toil in Manhattan but who live in the four other boroughs may be earning more than those working in Brooklyn, Queens, Staten Island and the Bronx, Mr. Dolfman said, but their wages would not change the data, because by and large those earners tend not to have the highest-earning jobs in Manhattan.
To be sure, most workers in New York City benefited from the economic boom of the 1990's, and the recovery after a recession in 2001. From 1996 to 2005, the real wages of Manhattan workers grew almost 40 percent, and grew 2.5 percent in Queens and Staten Island. They were flat in the Bronx and fell 1 percent in Brooklyn.
But while prices have risen on health care and education around the country in recent years, and housing prices in major cities have also soared, inflation has hit harder in New York in other areas.
The Consumer Price Index rose 24 percent from 1996 to 2005 nationwide but grew 27.6 percent in every borough of New York. In the last three years, New Yorkers saw fuel prices rise 27 percent, while they grew 19 percent nationwide. And while the housing prices rose 8.4 percent nationwide, they went up 14.7 percent in New York. At the same time, benefits have decreased in many professions.
"My salary has gone up 40 percent over the last several years because I have had several promotions," said Loreto Porte, a professor at Hostos Community College in the Bronx who lives in Queens. "But my expenses have gone up 50 percent. We have lost health benefits." She said that the electricity bill for her house had climbed, adding: "Property taxes have gone up. It's everything."
While Manhattan workers were not impervious to inflation, their wages helped shield its blow. Indeed, the number of families in Manhattan earning more than $200,000 a year rose almost 20 percent from 2002 to 2004 alone, according to the Federal Bureau of Labor Statistics.
Economists are divided on what this data means. Some say that rising tides still lift all economic boats, even if some of those are actually ships with giant lido decks and an open bar while others remain dinghies bobbing precariously.
They argue that low crime, which has led to soaring real estate prices, has helped improve nearly every corner of the city.
"The tangible C.P.I. and income is good summary measure," said Jason Bram, an economist at the Federal Reserve Bank of New York. "But then you have to ask, if you take a family in Bushwick and you look at them and their income in mid-90's and now it is this much higher but prices have gone up more than their average in income. The next question you have to ask is does that fully capture their quality of life."
"Because," Mr. Bram continued, "one statistic that really strikes me is that in the poorest neighborhoods the rate of crime and other indicators like abandoned houses have improved more dramatically than in New York City as a whole."
Copyright 2006The New York Times Company Home Privacy Policy Search Corrections XML Help Contact Us Work for Us Site Map Back to Top