New York, NY: If You Can "Make It Anywhere," Then Get the Heck Out
Eamon Moynihan at the Manhattan Institute's City Journal has some news that's news to me: New York City is the poorest city in America (poorer than Detroit) when you adjust its hapless denizens' income to the crazy cost of living. Some details:
Based on data from C2ER, a company that has been producing cost-of-living estimates for years, someone earning $50,798 in Chicago or $62,741 in Washington, D.C. enjoys the same standard of living as someone earning $100,000 in New York City. Not surprisingly, housing is the biggest factor. In Chicago, the cost of housing is 69 percent lower than in New York. In Washington, D.C., it's 46 percent lower. Utility costs are also lower—29 percent in Chicago and 39 percent in Washington. So are groceries, by 28 percent in both cities. The result is that New York City residents have far less purchasing power than anyone seems to realize. (What applies to New York City also applies to its suburbs. A person earning $76,256 in Chicago has the same standard of living as someone earning $100,000 in New York's Nassau County. Once again, housing is the main reason: its cost is 42 percent lower in Chicago than in Nassau.)
The next step is to apply these cost-of-living differentials to the most recent census estimates for per-capita income. This calculation yields a measurement of each city's average standard of living. Once you crunch the numbers, you find that the real standard of living in Washington, D.C. is 118 percent higher than in New York City. In Chicago, it's 75 percent higher….
Bettina Aten, a leading expert on purchasing power at the Bureau of Economic Analysis in Washington, D.C….estimates the cost of living in New York State in 2006 was 31.8 percent above the national average, second only to Hawaii, which, of course, is an island in the middle of the ocean. Once you apply that cost of living to 2006 estimates of median household income, you realize that New York State ranked last in the nation in purchasing power…..
It's clear that New York has a big problem. On a comparative basis, we're poor, thanks to a stratospheric cost of living—which itself is the result, I believe, of excessive and poorly designed regulation, most notably in the area of land use.
Joel Miller from Reason magazine's July 2006 issue on how land use regs in general make the cost of living, especially when it comes to housing, higher than it needs to be.
