The Middle Class Is Missing (New York)

Alan Berube
Alan Berube Interim Vice President and Director - Brookings Metro

July 8, 2006

Increasingly in N.Y., there are rich and poor—and nothing in between.

When most people think of “Middle America,” New York City isn’t the first place that springs to mind.

That’s due to the city’s mammoth size, its coastal location or its status as “blue” America’s cultural capital.

Now, New York’s economic middle also has gone missing.

According to a new study published by the Brookings Institution, only 16% of the city’s families have a “middle” income. That is, just one in six earned an income that came within 20% of the city’s median, or typical, family income in 2000 (about $42,000)—one of the lowest rates in the nation.

It wasn’t always this way. In 1970, nearly 25% of the city’s families had middle incomes. Even then, New York wasn’t exactly Middle America, but on this measure its families did look a lot more like those in the rest of the U.S.

Even more striking, however, has been the long-run decline in middle-income neighborhoods within New York. In 1970, these neighborhoods—where the typical family earned a middle income—comprised nearly half of all neighborhoods citywide. By 2000, only three in 10 New York neighborhoods fit this profile.

This pattern—a dwindling middle class, accompanied by an even faster disappearance of middle-class neighborhoods—is repeated in city after city nationwide. New York, dubiously, leads this trend. What has happened?

At one level, the decline of middle-class neighborhoods reflects larger national trends: trade globalization, technological advances, the shrinking power of unions and changes in family structure. These forces have combined to produce fewer jobs that pay middle-class wages, and more families who inhabit both the lower and higher ends of the income distribution.

On top of this, families have physically sorted themselves by income more than ever before. Middle-class flight from cities over the past three decades caused many neighborhoods to “tip” toward low-income status. For instance, Mount Hope, in the Bronx, was solidly middle-class in 1970. Today, most of its residents earn less than two-thirds of the typical New York family’s income.

Other neighborhoods have moved in the opposite direction. Brooklyn’s Park Slope and Windsor Terrace neighborhoods housed mostly middle-income families in 1970, but attracted wealthy in-movers in the 1980s and 1990s. Today they rank among the most expensive neighborhoods in the city, and contain relatively few low-income or middle-income families.

Middle-income, economically integrated neighborhoods are important ingredients for a healthy city. Areas like Richmond Hill, Queens, provide a critical rung on the housing ladder for working families who are moving up, but can’t afford neighborhoods like Park Slope. They also form a kind of “social glue” that bonds lower-income and higher-income areas, mediating the interests of residents at the economic extremes.

New York can do more to create and nurture families and neighborhoods in the middle.

Housing is part of the equation. The increasing number of city workers commuting each day from eastern Pennsylvania underscores the challenge. Preserving affordable options for middle-income families, such as apartments created under the Mitchell-Lama program, should remain a priority for the city.

So, too, should basic services like public schools and safety. Their deterioration in the 1970s and 1980s fueled the flight of middle-class families, and the dissolution of middle-class neighborhoods; their resurgence could reverse the trend.

Finally, New York can restore its middle class from within, by helping less-skilled workers access good-paying jobs. As the Center for an Urban Future recently argued, an aging city workforce will create tremendous opportunities for younger workers trained in construction, health care and technology occupations. The city must ensure that its workforce system is up to the task.

New York will probably never be mistaken for “Middle America.” But stronger middle-class families and neighborhoods would make New York a healthier city—and the envy of many middle Americans.