The incomes of middle-class Americans rose last year to the highest level ever recorded by the Census Bureau, as poverty declined and the scars of the past decade’s Great Recession seemed to finally fade. Median household income rose to $59,039 in 2016, a 3.2 percent increase from the previous year and the second consecutive year of healthy gains, the Census Bureau reported Tuesday.
While it is not a surprise that income is rising in an economic upturn, the claim is that this is more than a cyclical increase in income – even though wages are not rising.
The income increase extended to almost every demographic group, Census Bureau officials said. The figure the agency reported Tuesday was the highest on record. The agency reports that in 1999, median household income, adjusted for inflation, was $58,655.
And downloaded median household income for 2016 and 2006, a year at a similar point in the economic cycle. Adjusting the latter into 2016 dollars for an inflation-adjusted comparison. Downloaded it by age of householder. And found almost exactly what I expected.
In 1989 a new New York City Charter, developed by the equivalent of a state constitutional convention in response to a court decision invalidating the old Board of Estimate, gave city voters the power of initiative and referendum. The power to directly enact local laws that their representatives were unwilling to enact for them. That power has been used only once in the 28 years it has been in force – in 1993, to enact term limits for city officeholders. Since term limits are one thing the people are almost all in favor of, and politicians are almost all opposed to.
That initiative and referendum has created a double-blind test of democracy in New York City, an experiment that no one knew they were participating in when term limits were enacted. Because today, New York City residents are represented (or not) by two sets of non-federal legislative representatives. The 51 members of the New York City Council, who have turned over twice or more due to term limits. And its 91 member of the New York State legislature, with 26 State Senators and 65 members of the State Assembly. As we look toward a constitutionally-mandated November referendum on a possible New York State Constitutional Convention, something the entire New York State political class and its funders is opposed to and which basically seems to be hushed up, it is time to examine the results of this experiment. Because based on history, unless the powers that be manage to control the constitutional convention, term limits for state politicians is one provision that it might very well place before the voters for approval, and that those voters would almost certainly approve.
Suddenly, the hottest type of commercial real estate in the United States isn’t office buildings, or shopping centers, or apartments. It is industrial buildings – simple boxes, preferably as large and high-ceilinged and with as many truck loading docks as possible. And this isn’t because manufacturing is returning from overseas and “making America great again.” It is because distribution and logistics, the business of moving goods from producers to consumers as efficiently as possible, has been one of the two sectors with significant investment, innovation and productivity gains during the past two decades, along with information technology. (Education and health care have had a high level of investment, but without productivity gains in health care and without either innovation or productivity gains in education).
In the 2000s the innovation was super-efficient mega-warehouses serving large regions, with containers off ships and trains, reorganized into tractor-trailer-sized loads of pallets of goods with electronic and barcode tags, destined for big-box stores. The supply chain is so efficient that I am often amazed that the things I buy can be brought to me so for so cheap, even if the Chinese are producing it for free. For the Northeast, Eastern Pennsylvania and Central and Southern New Jersey has emerged as THE industrial center. This era corresponded with many of the final legacy operations, such was the warehouse serving Key Food, moving out of Brooklyn. The latest shift, just happening now, is being driven by one company, Amazon.com, and its growing legion of imitators. That shift has yet to really reach Brooklyn, but the rest of this post uses ZipBusiness Patterns data to show what the industrial trend was in that borough as of 2015 as compared with 2005.
In the previous post, which should be read first, I chronicled the location of and trends in Brooklyn’s office-based businesses. This post is about consumer-driven businesses. How hard is it to know the future? Consider the 1958 report from consulting firm Voorhees Walker Smith & Smith, Zoning New York City, which formed the basis of New York City’s current zoning resolution, passed in 1961.
Page 11. The growth of the supermarket has plainly reduced the role of the neighborhood food store. The efficiency of the large supermarket is such that a given volume of sales can be handled with sharply lower frontage requirements and, even allowing for parking areas, with appreciably lower land requirements…Simultaneously with the growth of the supermarket has appeared the integrated shopping center, ranging in scale from neighborhood units of ten stores to gigantic complexes with department stores and chain store branches. Since the main attribute of the shopping center is one-stop shopping for the automobile customer, the radius of retail trade areas has dramatically increased.
It is now a commonplace that both the downtown shopping district and the local string street have been adversely affected by these innovations in retail trade (resulting in) the excessive amount of retail frontage in the numerous strip developments of the city. A survey of frontages in sixteen shopping districts in widely scattered parts of the city indicated an average retail vacancy rate of nine percent, with an additional six percent of store frontage occupied by non-retail uses.
It is now 59 years later, and as a result of additional innovations in retail trade, the entire economic structure described by Voorhees Walker Smith & Smith is collapsing in suburban and Sunbelt America, as the strip districts of Brooklyn boom.
Brooklyn is one of the epicenters of the new, youth-driven economy. Employment, and the number of employed and self-employed workers, have soared, but the number of poor people living in the borough has also increased, and its average income remains far below the U.S. average.
Brooklyn’s economic base has long consisted of two things, commuting to Manhattan and bringing back money to be spent in the local consumer economy, and something else. That something else was once agriculture, and then manufacturing and the city’s seaport. With the city’s economic collapse in the 1970s, that something else was largely public assistance and government-funded health care and social services, which dominated the borough’s employment. The borough even lost a great deal of its local consumer-driven business activity, due to its falling relative income and the custom of its better off residents choosing to drive elsewhere to go shopping. Today, however, there is something of a turnaround, both in the economic base in the consumer economy. But where is it concentrated, and why? I had my daughter create some maps of data by zip code using GIS program CartoDB to find out. This post is about office-based businesses, and another will follow.
Across the country taxpayer pension costs for public schools are soaring, and state and local taxes are being increased while money actually spent on education is being cut to pay for it. You see it in California, where a huge tax increase “for education” went exclusively to pensions, and in Illinois, where the City of Chicago’s schools are on the brink of bankruptcy. You see it in Kansas and Oklahoma. In some cases soaring pension costs are the result of past taxpayers’ unwillingness to fund the pensions teachers had been promised, promised for some in lieu of Social Security, which those teachers will not be eligible to receive. In other cases pension costs are soaring because politically powerful teachers’ unions cut deals with the politicians they controlled to drastically increase pension benefits, beyond what had been promised and funded. In many cases there is a mix of both factors.
New York City happens to be the place where the teachers’ union, the United Federation of Teachers (UFT), is perhaps the most guilty, and taxpayers are the least guilty, with regard to the pension crisis. And it the place where the burden of teacher retirement is the greatest. The result is large class sizes despite extremely high public school spending, and a host of services that New York City children do not receive. With virtually all New York politicians in on the deals that have left the New York City Teachers’ Retirement System (NYC TRS) among the most underfunded in the country, however, there has been a desperate attempt to cover up the damage. So the consequences of retroactive pension increases for NYC teachers (and police officers and firefighters) have shown up not so much in education (and policing and firefighting), but in every other public service in New York. And all of this is under Omerta.
If you live in New York State, there is a lawsuit that claims you have it too good. Your taxes are too low, despite being the highest in the country at the state and local level combined, and too much money is being spent on public services other than public schools, such as mass transit, social services, housing, parks, libraries, everything else. The lawsuit has been filed by the Alliance for Quality Education (AQE), funded in part by the United Federation of Teachers (UFT), New York City’s teachers’ union, and the NYSUT, the New York State teacher’s union. It claims that New York State residents have stolen $billions for people working in New York’s schools each and every year for more than a decade. And that as a result we are getting what we deserve: schools that are so bad that at least in New York City and Syracuse, they violate the state constitution.
Of course the AQE is claiming it is suing “the state,” not the people who live in it. But where would “the state” get the additional $billions that those working in education demand be spent on schools? From higher taxes and lower spending on other things, that’s where. The same place that the additional spending on schools that has happened in the past came from. And note that while the claim is that the schools are bad, there is no admission that perhaps that New Yorkers are being cheated by those who work for the public schools. Instead the assertion is the other way around – that those who work in the schools are being cheated by New Yorkers, because they aren’t being given the money they deserve. But how much are the schools getting getting? Let’s go to the Census Bureau’s public education finance data and find out.