There is an exodus going on that has nothing to do with Moses or the Red Sea.
New York City’s shriveling middle class is taking to the hills, fleeing the city in the kinds of droves no one has seen in nearly a century.
“After decades of sharp income erosion in the face of relentless taxes, escalating living costs and wage reductions through technological changes, the full extent of this shocking exodus is laid bare in the latest US Census data,” the New York Post reported.
“The rich in New York City are getting richer; the poor are actually getting richer, but not rich enough to be middle class,” said Peter C. Earle, an economist at the American Institute for Economic Research, who has studied other data, noting the expansion in welfare and entitlement programs.
“Earle said it isn’t unreasonable to assume middle-class incomes are falling even faster in New York City than in other major US cities, because of the city’s high — and rising — housing and other living costs,” according to the Post. “New York City’s middle class comprises 48 percent of city residents, with median annual incomes between $30,000 and $60,000. Thirty-one percent make lower incomes, and the ranks of the rich account for 21 percent of New York City residents.”
The problem is hardly limited to New York City. The American middle-class ideal “was forged in the decades after World War II, when economic growth and wage increases climbed in lockstep for nearly 30 years,” Fortune recently wrote. “That pairing dissolved abruptly in the 1970s. Between 1973 and 2017, according to the Economic Policy Institute, the productivity of the economy grew 77%—but average compensation rose only 12.4%, adjusted for inflation.
“This divergence coincided with a shift in economic gravity, away from manufacturing and toward services and “knowledge industries,” Fortune continued, “That shift weakened the labor unions that had helped rank-and-file workers in many professions claim a bigger share of the bounty. Just as important were tax reforms that favored investment and real estate earnings over wage income. The upshot: an economic order in which the capital-owning class enjoys great advantages—and the costs of admission to and exclusion from that class grow ever higher.”
Zero Hedge was more pithy: “The American middle class is dying. In 2015, it dipped below 50% of the population for the first time since data collection started on the issue. It’s now an official minority group. Meanwhile, nearly half of Americans don’t have enough money to cover a surprise $400 expense. Many are living paycheck to paycheck, with little to no cushion. And US homes are less affordable than they’ve been in decades—possibly ever.”