Update On Bill de Blasio Report Card -- Income Inequality

Last month, shortly after New York Mayor Bill de Blasio reached his seventh anniversary in office, I had a post giving him a “report card” on his achievements, or lack thereof. As you may know, de Blasio is term-limited at eight years, so he is now in his last year. In fact the contest to replace him is well under way, with the primary (that will likely determine the result) scheduled for June 22.

My February post on de Blasio covered subjects like taxes, spending, crime, schools, and rent regulation. On all of those, his performance has been abysmal, if not worse. But recently it occurred to me that the post had omitted to cover another subject that de Blasio himself has consistently emphasized as being his signature issue. That subject is income inequality.

How has de Blasio done on this issue? The answer is, disastrously. Despite — or maybe because of — de Blasio’s policy initiatives and greatly increased public spending, measured income inequality has actually increased. That result will of course not come as any surprise to Manhattan Contrarian readers. Things like income inequality are just not subject to cure, or even amelioration, by government tax-and-spend programs. So de Blasio’s failure was inevitable. But that has not stopped him and his supporters, let alone his most likely successors, from continuing to believe that the next round of such programs and spending is finally going to work.

If you were around at the time of de Blasio’s first campaign for Mayor in 2013, you cannot have forgotten how he harped and harped on the issue of income inequality. He called it the “defining challenge of our times,” and spoke over and over about his “tale of two cities,” one rich and the other poor, that would be magically transformed by his progressive policies. This quote is from de Blasio’s victory speech given on election night in November 2013:

That inequality, that feeling of a few doing very well while so many slip further behind — that is the defining challenge of our time. . . . But the challenge today is different. The creeping specter of inequality must be confronted, and will not weaken our resolve.

So has de Blasio achieved any success on this issue? The most recent Census data on the subject, covering the year 2018, came out in the fall of 2020. On October 6, 2020, City Limits reported on the results from that data: “NYC’s Growing Income Inequality Threatens Pandemic Recovery.” Yes, under de Blasio’s mayoralty, New York City’s income inequality has been growing rather than diminishing. Excerpt:

New data from the Census Bureau reinforce a disturbing trend: over the last decade, New York City’s income inequality has worsened. The growth of incomes at the top continued to outpace growth at the bottom, expanding the gap between.

But maybe New York City was improving its standing relative to other states and cities? Again, it’s the opposite. On September 17, 2020, a website called My Twin Tiers put together Census information (again from 2018) showing that New York is “the state with the greatest income disparity between the top 1% of earners and the remaining 99%”:

The state with the greatest income gap is New York, where the highest tier makes 44.4 times as much as the rest. Average annual income of New Yorkers in the 1% is $2.2 million, compared to about $50,000 per year in the lower brackets.

OK, but that’s the whole state. Could the City be doing better? No:

Manhattan accounts for most of the disparity. There, the income average for the top 1% is 113 times that of the bottom 99%.

So which states come out the least unequal in these income inequality rankings?

Alaska is ranked as the state with the smallest income disparity. Florida took second-place honors among states.

Funny, isn’t it — it’s two very red states. Alaska you might dismiss as a very small population state and not very comparable to New York in many ways. But Florida? That is the state most comparable to New York in population and ethnic breakdown, but with a state government budget only about half of New York’s and a small fraction of the desperate and obsessive spending on “programs” intended to fix every human problem. If this doesn’t prove that New York-style progressive programs and blowout spending are not the solution to “income inequality,” I don’t know what does.

Back at City Limits, they look at the data on increasing income inequality in New York, immediately blame that for a higher level of mortality from the Covid 19 virus among the poor, and come up with this as the solution:

To overcome the wounds of this public health crisis, the city and state need additional funding to address the social and economic vulnerabilities that existed prior to the pandemic, which are heightened now and risk widening income inequality even further.

No amount of contrary evidence will ever dent their conviction that additional (taxpayer) funding is the solution to all human problems.

The information cited here so far comes from Census data released in September 2020 and covering the year 2018. Unfortunately, Census data come out with substantial lags. Can we get anything more recent?

What we know about 2020 is that the Covid 19 pandemic hit, and New York responded with the strictest versions of lockdowns and business closures. The large office tenants that drive the City’s economy — banks, financial institutions, law firms, accounting firms, advertising firms, and so forth — were almost entirely able to continue operating remotely. And their high-income workers continued to get paid. But in-person service operations — things like restaurants and small retail stores, the places that employ workers toward the lower end of the income distribution — those places got substantially shut down by government orders, which emanated from both the State and the City. In other words, our political masters who claimed to care about nothing more than fixing income inequality, instead took action that intentionally put many of the low income people out of work for an extended period of time.

The Wall Street Journal has a report today, with the headline “One Year Into the Pandemic, New York City Faces a Lopsided Economic Recovery.” Excerpt:

New York City counted 626,400 fewer private-sector jobs by the end of January compared with a year earlier, boosting the unemployment rate to 13.1% from 3.8%. The Bronx, which already had the city’s highest jobless numbers pre-pandemic, suffered the worst, with unemployment jumping to 17.7% from 5.3%, according to the state Department of Labor. “It’s hard to imagine how things could be any more lopsided,” said James Parrott, an economist at the New School. “Half or more of the economy is relatively unscathed. The other part of the economy, where face-to-face services are conducted and most workers are paid by the hour or on a project basis—that sector has just been devastated.”

In short, even though Census income inequality statistics for the full year 2020 won’t come out until some time in 2022, it couldn’t be more clear that the policies adopted by Mayor de Blasio (and to some degree also by co-Democrat Governor Cuomo) had the effect of further increasing income inequality that was already highest in the nation. Potentially, those two might argue that the increase in income inequality is unfortunate, but was necessary in the effort to contain the virus. But once again, they run up against the comparison with Florida. In Florida, Governor DeSantis announced back in September that “every business has the right to operate.” As a lead example, restaurants and bars in Florida have been open at full capacity since then, even as here in New York City restaurants were only allowed to have outdoor dining in January and February, when the temperature was mostly in the 20s (F).

By comparison to New York City’s unemployment rate of 13.1% as reported by the WSJ, Florida’s most recent rate is 4.8% (for January 2021). Meanwhile, Florida’s rate of deaths per million from Covid 19 is 1529 per million; New York’s is 2557 per million.

It is hard to come away with any conclusion other than that de Blasio’s endless blather about income inequality was just a sick joke. He had no idea how income inequality had originated, and no idea how to diminish it. What he has done in 7+ years in office is increase the City budget from about $73 billion to $94 billion annually, in a time of little to no inflation. Another $20+ billion per year to the bureaucracy to accomplish absolutely nothing. It’s the very definition of progressivism.