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The issue with these assessments of living wage in NY is that, if you're poor and desperate, there are many ways to "live" that, while not particularly desirabl

by gen220 4y ago

The issue with these assessments of living wage in NY is that, if you're poor and desperate, there are many ways to "live" that, while not particularly desirable to most people, are certainly available. This is true both on the "cost" side (i.e. expenses related to food and housing) and on the "income" side (reported wages). There is a large, technically illegal, economy to NYC which doesn't appear in W-2s, 1099s or self-reported census income, that most people outside of it generally aren't aware of. I'm not saying that the situation is good, but "60% of New Yorkers are not earning a living wage" is inaccurate. The existence of this grey economy makes it very difficult to measure income and expenses for a large proportion of New Yorkers. [edit]: As an example, I have a friend who grew up in a working class family in south Brooklyn. His mother's job was "on the books" and his father's construction work was completely off-the-books, paid in cash. Everybody in the family was very aware of the amount of money you could deposit in a bank account, in a given time period, without attracting IRS attention. Recently, they bought a building in Brooklyn for a low million dollar figure, after pooling together informal loans from family members and friends. But their household was probably below the "living" wage, from the point of view of this data set, for the past 25 years.

yunohn 4y ago
Let me get this straight: your point is that some people run off-the-book businesses, and that explains the severe poverty and lack of living wage?
rektide 4y ago
It makes me so sad to see how many people chime in, to sign on to this complete willingness to take some obvious exceptions & caveats & use them to decide there's no problem, that everything is fine. The effort gone through to wring out excuses for having no empathy, for ignoring the truth is revilesome. I had a number of friends who sometime after highschool or college moved to NYC area & lived in ridiculously illegal cramped over-stuffed loud living spaces & struggled to eat, to be in the city. Struggling for jobs & work but feeling like they had to be in the city. These are mostly quite privileged folks who had good educations at good public schools, and still struggling to stay standing at all. NYC is absurd to me, is shocking in extreme in it's cost of living, limited housing options, in how hard it can be to get by. There's a huge question in my mind of how many people fare & make it, transplants & many many natives raised there. The findings here completely lines up with my expectation & the unfortunately stark reality of life in such an amazing place. There may be some light grift, and some higher scale grift such as buying whole appartments, but by god, it hardly seems to change how hard it can be to find place, to gain income of sufficient scale for that grift to be of any real scale.
mnky9800n 4y ago
What is this illegal economy and why is it unknown outside of NYC?
- peruvian 4y ago
  Cash businesses and a lot of cheating on taxes/income reports. I have some NYC-native friends whose parents make less than $20k a year on paper but own homes and generally live comfortably. This is common in their immigrant community. On top of that, people rent apartments to each other cash only, pay with cash at restaurants or grocery store, etc.
  - konschubert 4y ago
    Must be fun to pay your taxes knowing that you are subsidising this BS. EDIT: I think my comment was't clear: I pay my taxes, just not in the US. :) I think that by tolerating tax cheating (withdrawing IRS funding), the US is punishing those who are honest. My comment was triggered by the very nonchalant way how the above comments made it seem like a normal NYC thing to steal tax money. If taxes are too high then they should be lowered. Selective enforcement is bad.
    - p0pcult 4y ago
      Just because other people cheat, doesn't mean that you should. Taxes are the price of civilization.
      - ben_w 4y ago
        While true, it can still cause resentment if $subpopulation appears to be able to get away with "cheating" — scare quotes because it's not well-defined, and the resentment still happens even when the "cheating" is necessary to maintain existence rather than comfort, e.g. "Why do disabled single mothers get paid to look after their kids?" and "Why do we pay to house these people who fled a war and don't know if their families are still alive?" etc. I don't have any solution here. Lots of resentful people claim to follow a specific dude that told rich people to pay their taxes, to give all their money to the poor, etc., and if a lifetime of religious practices don't persuade them what on earth can a random internet stranger like me do?
GordonS 4y ago
> There is a large, technically illegal, economy to NYC which doesn't appear in W-2s, 1099s or self-reported census income, that most people outside of it generally aren't aware of Can you say some more on what this means? (I'm an outsider, and have no idea!)
- topkai22 4y ago
  Lots of economic activity in New York is not reported to the government
- tristor 4y ago
  This exists in many places, it's not unique to New York City. In general what this means is one of three things: 1. Cash businesses that don't report income for taxation, so get to make effectively 40-50% more income from their revenue. In this case, I am using the term "business" to refer any income-generating activity for which you are not employed by another person. Yes, this counts the dude selling loosies. 2. A business which is itself illegal because of the nature of what you are selling. This could be as deep as narcotics, or as simple as trucking in cigarettes from out of state so you can sell them at a street news stand and pocket the difference in what would be otherwise taxes going to the state/city. 3. Being paid under the table, this includes things like illegal immigrants working on construction crews, as hotel maids, and back of house in restaurants, getting paid out at the end of the night on a daily basis ("day labor") in cash, never reporting any income for tax purposes. Generally speaking, when someone says "illegal economy" in a place like New York City, what they mean is the sort of petty tax evasion that naturally occurs amongst immigrant communities and the poor who would otherwise not be able to afford to reside/live there if they paid their taxes in full. New York City is effectively the highest taxation regime you can live in within the US. Major metros in California come close, but are not quite there. If you avoid every tax except sales tax, you can significantly improve your income potential at lower wages. It's the difference between taking home $17/hr or taking home $12/hr after tax, that extra $5/hr is nothing to be sneezed at, and amounts to an extra $10k/yr in your pocket if you work enough hours to be considered "full time" (which in the illegal economy usually means multiple "jobs" or hustles).
  - 4y ago
giraffe_lady 4y ago
That may be a problem with the assessment but I don't see how that allows you to redefine what "the actual problem" is. To me it still very clearly seems to be that people don't get paid enough? Even the grey economy you mention is caused by that actual problem, is not a replacement of it.
- gen220 4y ago
  Sorry, I'm not meaning to say that people aren't getting paid enough. My phrasing choice was poor. I mean to say, it's very difficult to inform policy from data with big inaccuracies. I'd say the grey economy is caused by myriad issues. But it's a space where people are able to meet their needs (on the employer and employee sides). Even though most of us on this forum wouldn't accept those conditions, hundreds of thousands of people do. It's a nuanced issue that requires a lot of thought and research, before jumping to conclusions about whether it's bad or not. Anyways, IMO, if we want to understand whether peoples' lives are sustainable with their present wages in NYC, we have to measure their actual wages, which is inclusive of this grey economy, unlike the reported data source.
  - giraffe_lady 4y ago
    Not really. I mean if you want to have a stupendously high bar of confidence, and continually raise it so that no action is ever necessary or possible, then yes you need to spend many more years to understand every nuanced economic detail. For me idk, I've lived a lot of my life in poverty and on the edge of it, and large swathes of my social and family communities still do. I don't need more proof. It's very obvious that most workers are not compensated adequately and this data confirms it unless you really really don't want it to.
    - gen220 4y ago
      I agree that we don't need the full picture to take meaningful action. I thought it was important to bring attention to the grey economy aspect, because so much of NYC would literally not function at all without it, and its existence and scale does have a meaningful impact on how you interpret this report (i.e. that the report is directionally correct, but its unbelievable magnitude is evidence that we can't reduce something as complex as poverty to a single number, especially when that number is essentially employee and employer-reported income).
disintegore 4y ago
I find it hard to believe that the amount of tax fraud in NY is enough to throw this figure off. Even if what you're describing is true, it would hardly be "the actual problem" here.
- gen220 4y ago
  Snippet from my reply to a similar sibling comment: Sorry, I'm not meaning to say that people aren't getting paid enough. My phrasing choice of "actual problem" was poor. I'll leave it up so this thread makes sense. My intended point was: if we want to understand whether peoples' lives are sustainable with their present wages in NYC, we should be measuring their actual wages, which is inclusive of this grey economy, unlike the reported data source. The amount of "tax fraud" required to impact the figure is less than one might imagine, because the "living wage" standard is quite low.
  - disintegore 4y ago
    That's fair, but your post might have been more prescriptive than you intended. Your wording insinuates that New York doesn't actually have a problem with incomes relative to cost of living because most people make up for that through an informal economy. There is ambiguity, granted, but on the surface that looks like a massive stretch. The figure might be impacted, but for it to be completely eclipsed is another order of magnitude entirely.
    - gen220 4y ago
      You're right! I went ahead and edited it to hem closer to my original intent. I totally agree that NY has a significant (income:cost of living) problem. My main objective was to draw attention to the difficulties in measuring the size and distribution of this problem, caused by the unmeasured informal economy and unbalanced access thereto. I definitely don't think that the informal economy makes up for low reported wages, but it definitely is a ballast that we'd be better off understanding, given its scope and entrenchment.
- settrans 4y ago
afavour 4y ago
Not saying this doesn't happen, obviously, but is it really going to be anything more than a rounding error?
- TuringNYC 4y ago
  It is probably a rounding error for white collar and technology workers (the crowd here.) However, I'd doubt this is a rounding error for other trades (construction, electrical, plumbing, etc) -- so many repairmen demand cash or demand premiums if paying via Zelle/etc.
themitigating 4y ago
Do you have proof of widespread tax evasion?
- kube-system 4y ago
  The last official estimates of the tax gap is $496 billion, and the IRS says that the number is likely approaching $1 trillion. https://www.irs.gov/pub/irs-pdf/p1415.pdf https://www.irs.gov/pub/irs-pdf/p1415.pdf https://www.reuters.com/article/us-usa-treasury-irs-idUSKBN2C0255 https://www.reuters.com/article/us-usa-treasury-irs-idUSKBN2...
  - themitigating 4y ago
    That's for the country, we are discussing ny
    - kube-system 4y ago
      That's how widespread it is! :)
  - alistairSH 4y ago
    But how much of that is low-wage workers? And how much is wealthy individuals trading in crypto, or hiring expensive lawyers/accountants to move their money around?
    - kube-system 4y ago
      Page 20 breaks it down by source a bit, and you can probably gain some insight from that. > And how much is wealthy individuals trading in crypto The total of all unreported capital gains are 18% of the tax gap, according to the document. So, significantly less than 18% > hiring expensive lawyers/accountants to move their money around? Tax avoidance wouldn't be capture in these figures, so zero.
    - adolph 4y ago
      > trading in crypto That would make it a negative number or more accurately an imaginary amount of tax evasion, right?
malfist 4y ago
> There is a large, technically illegal, economy to NYC which How do you know that? Your next statement is that there's no good way to measure that income, how do you know how large that economy is? It's either measurable, or immeasurable. You can't claim the know it's dimensions and also that you can't measure it's dimensions.
- kube-system 4y ago
  One can determine that something is large without measuring it accurately.
  - rootusrootus 4y ago
    Yes, but there'd still be something more than conjecture and a single anecdote.
    - kube-system 4y ago
      There's this: https://www.irs.gov/statistics/irs-taxpayer-compliance-research https://www.irs.gov/statistics/irs-taxpayer-compliance-resea...
      - rootusrootus 4y ago
        That's a lot better than anecdotes, for sure. The short answer seems to be about 83% tax compliance.
    - InitialLastName 4y ago
      Anyone who has lived in the (NYC metro) region can almost certainly provide you more anecdotes. Filtering by circumstances I can personally attest to in NYC proper: - 3 situations where nannies were being paid entirely under the table (this one is less common now that everyone I know is over 26 and needs health insurance) - a small (legitimate) business owner who regularly employs a handyman under the table - restaurant staff who don't report cash tips (too common to count) - Street vendors all over the place (including those who were openly selling cannabis prior to legalization) - Tour guides working entirely for cash - Lots of technically-illegal off-the-books living situations (a living wage goes a lot further when you're willing to live in a basement studio apartment with no windows). - Small stores with a "regulars" discount that never hits the register
onlyrealcuzzo 4y ago
> The issue with these assessments of living wage in NY is that , if you're poor and desperate, there are many ways to "live" that, while not particularly desirable to most people, are certainly available. I came here to say this is merely evidence that a lot of people are willing to put up with a lot of BS to live in NYC. If it wasn't "worth it" to them - for whatever reasons that may be - they'd be living elsewhere.
- htag 4y ago
  I hear this a lot. I'm inclined to share the sentiment for the young student going to NYU, the intern at a museum/art gallery, or the actor waiting tables while auditioning and doing off broadway. They made a choice, and clearly think the city can offer them enough to deal with poverty and desperation. I'm less inclined to share the sentiment about people that were born and raised in NYC and have their entire social network there. They had less choice in the matter, and they might be even more desperate if they lost connection with their social support group. In addition, many people born and raised in NYC are missing skills that would be considered essential almost anywhere else in the US, such as how to drive a car. Regardless of how/why someone arrived in NYC, the prosperity of it's population is a direct concern of cities. The income of it's tax payers directly correlates to a city's tax base, and we've seen what happens when a city's tax income falls short of projections. Poverty and desperation also seem to go hand in hand with expensive problems (for the city) such as crime and poor public health.
  - mattzito 4y ago
    > I'm inclined to share the sentiment for the young student going to NYU, the intern at a museum/art gallery, or the actor waiting tables while auditioning and doing off broadway. They made a choice, and clearly think the city can offer them enough to deal with poverty and desperation. Perhaps I missed these personas in the original article, but these are very charitable examples of "poverty and desperation". Most people interning at museums and art galleries (in my experience) come from families who can at least afford to subsidize the cost of living in NYC. Waiting tables while auditioning and doing off broadway is actually a pretty decent way to earn a living - I had/have friends who have been doing that for 15-20 years and earn solid incomes, in some cases enough to raise a family. I went to nyu, and while it was a while ago, I'm told that if anything, NYU students are more privileged than they were when I went there. The real examples of poverty and desperation are the immigrants who are effectively forced to work in sweatshop conditions, or the women who pick up hours here and there in childcare in their neighborhood, or the security guards who live out of their cars or in homeless shelters because they don't get paid enough to end up in a stable living environment. In some cases, they don't have a network outside of NYC they could lean on, or don't have the resources to get to another city, or are (justifiably) scared of what would happen when they got there.
Brian_K_White 4y ago
If the problem is not that you can't live, but that you can't live officially, I would say that is still a problem.
- rr888 4y ago
  A good 5-10% of the population are illegal immigrants so that isn't a good start.
- malandrew 4y ago
  Yeah, it's still a problem, but the problem is with the powers that be that set the rules for what it means to live officially. The wages are less of a problem here than the theft by government of the fruits of ones labor. The wages payable are still at the mercy of what the market will bear. If these people could not find a way to live officially, in many cases it's highly unlikely that the wage could rise to cover their cost of living and the taxes to be paid, meaning the job would no longer exist. At the end of the day, you can't tax a society into prosperity. Every tax dollar spent needs to be justified on an ROI for society.
- simonh 4y ago
  It's many problems. It's not a simple situation because it's one that has evolved over many generations. Is it working people defrauding the government? Is it the government abrogating it's responsibility to manage the economy and tax people fairly and provide effective services to the community? Is it a haven for criminality of a more sinister and even violent kind that inhabits the grey economy and turns it black? All of the above, but it's hard to reform because the people who live this way and suffer many of the disadvantages that result from it are also deeply complicit in it's operation.
i_am_proteus 4y ago
From my experiences living in NYC, this seems directionally correct and very difficult to measure. Tack on that cost of living in NYC varies wildly depending on rent-stabilized and rent-controlled apartment arrangements (rent control is more strict than rent stabilization, rent stabilization is more common than rent control). There are millions of New Yorkers living in rent-stabilized apartments, and they might earn enough to live in their current pad but not be able to move somewhere else at market rate. Similarly, property values have skyrocketed, so people living in homes they bought decades ago might be comfortable, while earning a wage that is technically not "living" by the standards of thhis academic research.
- woodruffw 4y ago
  Excellent summary. I have a lot of friends who grew up in rent controlled (in the 1940s law sense) units, and they'd probably be considered "below the living wage" according to these sorts of metrics. Combine that with the massive informal economy, and it becomes very difficult to perform accurate econometrics on the city as a whole.
  - klyrs 4y ago
    If those people living in rent controlled units move, can they find a place with the same rent? Or would they need to move to a different state, away from their friends, family, community and job?
    - woodruffw 4y ago
      Probably the latter. There are many senses in which it's not ideal; at the same time, I think most people in NYC would happily take a rent controlled unit (if they're not already living in one).
      - klyrs 4y ago
        Yep. And what rent-controlled units exist, have huge waiting lists. If you don't like the place, or if your landlord is negligent or an abusive jerk, then too bad, them's the breaks. You're "happy" to take such a place because the alternative is worse. That doesn't mean it's good.
boredumb 4y ago
I lived near a bodega in east harlem that was cash only and had a bitcoin ATM in the corner.
theGnuMe 4y ago
If only someone studied this... https://budgetmodel.wharton.upenn.edu/issues/2021/4/30/map-income-underreporting-by-state https://budgetmodel.wharton.upenn.edu/issues/2021/4/30/map-i... New York is about 11k undeclared on average per taxpayer. Now living wage rates: https://livingwage.mit.edu/counties/36061 https://livingwage.mit.edu/counties/36061 Living wage for an adult with 0 children is $25.42 per hour and minimum wage is $15. So let's say that difference is $10. $11k is 1100 hours which is 137.5 eight hour days just do bring you up to a living wage. Note that this excludes any dependents. Factor in a non-working spouse or kids and the discrepancy is worse.
Eumenes 4y ago
[flagged]
- Supermancho 4y ago
  Some taxes are. Taxation is the only methodology to manage large modern populations, that are not effectively self-sufficient.
- kube-system 4y ago
  If taxes are theft, is it immoral to use tax subsidized goods and services?
  - roflyear 4y ago
    I think it would be!
- 0xbadcafebee 4y ago
  Found the anarchist!
quijoteuniv 4y ago
Do you think that people will choose illegal out of whim? I saw in manhattan that people where struggling behind low paid jobs. Low pay in scandinavia is above that threshold and people can afford a (more than decent) living.
johnchristopher 4y ago
"Akshually, poor people are cheating on taxes and are way richer than you'd think".
- notch656c 4y ago
  Not necessarily poor people, but something like half of the world's workforce is "informal." Not formally recorded. The on-the-books view is way different than the total view.
- tetromino_ 4y ago
  Actually, in NYC it's not just poor people who are cheating on taxes. Tax fraud here can get pretty wild.
- woodruffw 4y ago
  This isn't a kind or charitable way to respond. The GP isn't making any sort of moralizing claim about "cheating" or the city's underclasses being "way richer" than measured.
  - johnchristopher 4y ago
    Went straight from "if you're poor and desperate [..] there are many ways to "live" that, while not particularly desirable to most people, are certainly available" to "I have a friend "whose family know how to work off the books and avoid the IRS [..] bought a building in Brooklyn for a low million dollar figure [..]. But their household was probably below the "living" wage, from the point of view of this data set, for the past 25 years." That's a sleight of hand. "But look, I know some poor people who cheat !". Yeah, a minority cheats. Now if someone can come up and say there are way less poor people than we think in NY and back it up it'd be another story.
- deleted 4y ago
  [deleted]
zehaeva 4y ago
The fun part of your example is that the top line numbers they talk about are for NYS, not for NYC. In fact they call out NYC for having Manhattan boasts the state’s highest percentage of residents – more than 80% – earning a living wage. Which seems to not line up with your assessment
- endtime 4y ago
  Manhattan is only one of five boroughs of NYC, and it's the wealthiest of the five.
- woodruffw 4y ago
  Manhattan is 1/5th of NYC by municipality, and about 1/6th of the city by population. It's historically the wealthiest borough, so it's not particularly surprising that its residents would have a higher-than-average living wage attainment percentage.
- wikfwikf 4y ago
  Manhattan is not NYC. Most poor people live in the other 4 boroughs. Most wealthy people live in Manhattan (and Brooklyn).
  - onemoresoop 4y ago
    New York City is composed of five boroughs: The Bronx, Brooklyn, Manhattan, Queens, and Staten Island. Each borough is coextensive with a respective county of New York State.
    - the-printer 4y ago
      I think what he means is that Manhattan alone does not comprise the entire city.
rospaya 4y ago
How do you comment on more than 100 thousand homeless children in NYC? Are they also a part of some cash scheme? https://www.nytimes.com/2022/10/26/nyregion/nyc-homeless-students.html https://www.nytimes.com/2022/10/26/nyregion/nyc-homeless-stu...
- woodruffw 4y ago
  Your own article addresses this: NYC (correctly!) counts students as homeless even if they're living long-term with other families or in family shelters, of which the city has many. "100,000 homeless children" does not mean "100,000 street urchins." It means that many of the people who make up NYC's informal economy have living situations that the city (again, correctly) classifies as unstable, or who are dependent on the city for stable housing.
  - PaulHoule 4y ago
    The eye-popping numbers of "homeless" in NYC are not comparable to the situation in California. Many of the "homeless" in NYC are immigrant families in shelters. As NYC is a portal for immigrants coming to the US and some of them end up in difficulty, this is how it is. This is different from the situation in California where the "homeless" really are sleeping outside.
    - woodruffw 4y ago
      Precisely. There are very few things that I give the city credit for with respect to how it treats its homeless and unhoused populations, but categorization is one of them: the city doesn't attempt to sweep the problem under the rug by pretending that shelters (including family shelters) are long-term housing solutions that offer stable lives for their residents.
0xbadcafebee 4y ago
Have you viewed the map? https://blogs.cornell.edu/livingwage/ https://blogs.cornell.edu/livingwage/ Almost all of the red sections are outside of NYC. They don't have access to this NYC underground economy. Though The Bronx and Queens are some of the worst-affected areas, Erie and Rochester come up right behind. The racial and ethnic slant is also hard to miss. If the NYC underground economy is indeed the only thing keeping minorities afloat, that means the economy is dependent on exploiting minority communities (keeping them working in illegal ventures, preventing upward mobility). If you select the Finger Lakes region (5 hours away from NYC), and then select Race-Ethnicity, it couldn't be starker. Workers of Color lights up most of the map in red, with a median income of $16.80-$25.00. Select White Worker, and it's very light red and mostly green, centered around the city, with $21.48-$32.49. White people do well and everybody else struggles.
- SilasX 4y ago
  >The racial and ethnic slant is also hard to miss. If the NYC underground economy is indeed the only thing keeping minorities afloat, that means the economy is dependent on exploiting minority communities (keeping them working in illegal ventures, preventing upward mobility). Or, alternatively, that the tax structure of the area is so abusive that the economy depends on tax evasion.
- scarmig 4y ago
  > If the NYC underground economy is indeed the only thing keeping minorities afloat, that means the economy is dependent on exploiting minority communities (keeping them working in illegal ventures, preventing upward mobility). The flip side of the coin is that there's a reason people work in illegal ventures: making them fully legal would make them uneconomic, because of a combination of taxes and regulations, and also hurt upward mobility. You see that in places like France, where the youth unemployment rate tends to fall in the 20-25% range. (Though that too gives an overly negative representation of the state of things: France also has a significant shadow economy, so things aren't actually as bad as they might look there.) It's a game of tradeoffs. What's probably ideal is to move as much as possible into the formal economy, regulate only those things which you can actually afford to regulate and enforce, and tax to the extent you don't drive things underground or out of jurisdiction.
malandrew 4y ago
This raises the point that I don't think gets enough attention: taxes for many are a barrier towards life goals. For some like the folks you mentioned, it's a barrier to putting a roof over your head or buying your first home. For others, they can afford housing, but taxes are the difference between being able to save for retirement or not. That's not to say that there aren't things of value we get for our taxes, but there are a LOT of ways that our taxes are squandered, especially at the federal level, which sadly is the largest chunk of taxes. We all pay the most in federal taxes and get the least in return for federal taxes. State taxes are the second most paid and we get see benefits from them than federal but less than local. Local taxes are often the least amount but the most likely to be spent on things that actually benefit you personally. We could help everyone make better progress towards life milestones like owning housing and saving for retirement if we collectively held government accountable for how it spends our taxes and reduced taxes across the board.
- konschubert 4y ago
  If the law is bad, you have to change the law. If you instead choose to selectively enforce the law, political power is transferred from the legislative to the individuals who selectively enforce the law. That's how you get Russia.
- ryanwaggoner 4y ago
  Eh, a huge percentage of the population pays no federal income tax at all. They pay payroll taxes, but they also get a specific benefit from those taxes, it doesn’t disappear into some black hole of defense spending or whatever. Edit: https://www.cnbc.com/amp/2022/03/25/57percent-of-us-households-paid-no-federal-income-tax-in-2021-study.html https://www.cnbc.com/amp/2022/03/25/57percent-of-us-househol...
- pjc50 4y ago
  In general, "not having enough money" is a barrier towards life goals, whether that's from the taxman, rent, commuting costs, fuel, wage suppression, wage theft, or whatever. > taxes are the difference between being able to save for retirement or not In countries with state pensions, some of the taxes are saving for retirement. There's a lot to be said for the idea of reducing the friction of income taxes and shifting instead to property or land value taxes, though. It's a lot harder to conceal a building or move it offshore.
eatsyourtacos 4y ago
> but "60% of new yorkers are not earning a living wage" is inaccurate If we define living way as proper healthcare, paid time off, paid sick leave, adequate income to put into savings/retirement.. enough money for education, childcare.... then do you think that number is inaccurate? I sure don't. And this doesn't have much to do with new york. At least half of the US population lives under these conditions.. probably even more. The term living wage means more than putting a roof over your head and having a job. It's being able to not feel basically like a slave.
- gen220 4y ago
  The (uncomfortable for us) reality is, for many people living in NYC, the things you mention are not considered minimum standards for a happy or fulfilled life. 4.4 million people in NYC are immigrants, many of them coming from situations where the phrase "standard of living" carries no water. These people want their children or childrens' children to have the life you describe, and see that as fair. I'm not saying it's a good thing or an acceptable thing, merely calling it what it is. I agree with you that the government should be funding a higher standard of living for all. But reality as it exists today is more complicated than the platonic ideals we'd like it to be.
abeppu 4y ago
This economy exists, but I think it's still arguable whether the people you're talking about are "earning" a living wage. Setting aside the measurement problem, consider 2 households: - household A takes in (1+C)X dollars of W2 income, keeps X after taxes, and steals Y = CX/(1-C) to get to the "living wage" level of income. - household B makes X + Y in off-the-books cash, and thus doesn't pay C(X+Y) in taxes. Both have the same take-home pay. Household A steals the same amount household B saves from tax fraud/evasion. We wouldn't say that household A "earned" their living wage, even if we could measure it. If Y of their income is ill-gotten, it isn't "earned". Neither should we say that the household B is "earning" their take-home pay amount. Meanwhile, they're benefiting from a government which is subsidized by their more law-abiding neighbors. Said otherwise, for the same level of state + city per-capita spending, their neighbors could have a lower tax rate if the illegal economy were smaller. We casually like to think that not paying taxes is victimless, but this is an illusion; the victims are literally everyone who is paying taxes.
- pdonis 4y ago
  > they're benefiting from a government Are they? Is the government actually benefiting the people we are talking about, on net? I strongly suspect that the answer to that question is "no". And if that is the case, the people who aren't paying taxes could justly respond that the people who are paying taxes are enablers, keeping a government in existence that does not provide the benefits the taxes are supposed to be paying for.
  - abeppu 4y ago
    If you disapprove of the way funds are being spent, the appropriate response is to campaign and vote for what you think are more reasonable policies. Saying that tax-payers are the criminals by propping up a system with abuses is just as nonsensical as saying that non-thieves are criminals for propping up a system of property rights which creates abuses. NYC has persistently been an economic hub and a place where people sacrifice a lot to live and work. NY as a state and NYC both have quite significant public spending. I think on a per-capita basis, the NYC municipal budget alone is is in the range of ~$11k/head and the state budget is another $10k/head. Do you think those facts are unrelated? If you look at NYC's evolution over history, it has repeatedly needed active government programs to make a dense city function, and to actively support trade, commerce and finance. In the absence of coordination and expenditure, I think Manhattan's growth would have been capped by sanitation issues or the limited water supply centuries ago. There are plenty of places (most) in the country with lower per-capita public expenditure, but none of them have succeeded in creating NYC's economic success. Do you think that's an accident?
CivBase 4y ago
> "60% of new yorkers are not earning a living wage" is inaccurate Sure, but "60% of New Yorkers break the law to make a living wage" isn't any less scathing. Either way, the situation looks pretty bleak. At this point, I can't see a future where NYC doesn't become the next Detroit.
- atyppo 4y ago
  I don't think you know much about how Detroit collapsed if you're saying that. While crime and public safety have become issues, I think most of the blame can be assigned to police too lazy to do their jobs.
  - 988747 4y ago
    And NYC is one of the prime examples of "defund the police" movement, isn't it?
    - atyppo 4y ago
      [dead]
- woodruffw 4y ago
  You can't see a future in which the US's (and arguably the world's) financial and cultural capital doesn't have the same fate as an industrial city?
whywhywhydude 4y ago
A lot of NYC benefits- subsidized or free health insurance, subsidized housing, food stamps, free child care benefits, etc only kick in if your income is below a certain threshold. It’s very easy to work off the books in NYC and collect the benefits while still making a decent amount of money in cash.
wcunning 4y ago
Additionally, it would appear that the Cornell data set, coming from the Census Bureau, suffers from the typical problem in most of these data sets -- it is income only, not income net of taxes and transfers. About 1/2 of the US population pays no direct income tax, and of that 1/2 many receive a large share of transfer from government in the forms of Medicaid, food stamps, EITC, etc. After taking into account all of those non-taxes and transfers, this group is much better off than a lot of the publicly available data sets would indicate. This is mostly due to the difficulty of getting all of that information together on each individual in the data set, whereas looking at a reported W2 value is comparatively easy.
no_wizard 4y ago
I've heard of this being prevalent in NYC in particular. I remember reading a story, and it was corroborated by some folks I knew at the time, in particular about car repair shops and adjacent activities (like pick n pull style places, part resellers etc). The police, in large, know that a lot of these places use gray area sources for getting parts and sometimes labor, but they're not really itching to do much about it on that level, because it provides this type of employment across the board in the burroughs where its most prevalent. I have no idea how true this is today, but in circa 2015 or so, seemed to very much be the norm.
gorwell 4y ago
It's also wordplay to cover for the fact that many live beyond their means. Earn more, spend more. Lifestyle inflation is more common than we like to admit. When I made $30k per year I lived paycheck to paycheck. When I made $50k per year I moved into a larger apartment and lived paycheck to paycheck. When I made $80k per year I bought a new car and starting ordering food with UberEats, and well, you get the point.
- sterlind 4y ago
  my partner managed to save up over a period of a year until their car died, and had to spend all their savings buying a used one (the most they could afford) which will probably not last long. they also spend a majority of their income paying off debt, mostly the monthly minimum on credit cards they ill-advisedly used to pay rent when they lost their job. being poor is expensive.
  - autoexec 4y ago
    > mostly the monthly minimum on credit cards they ill-advisedly used to pay rent when they lost their job. What is advised in that situation? Homelessness? A lot of people found themselves dealing with that during the pandemic and they ate up all their savings and/or ran up debt just to keep a roof over their heads and food on their tables. If I had found myself in that situation I'd probably have broken the lease and moved in with friends/family but not everyone has others who they can depend on to take care of them like that.
- ModernMech 4y ago
  When you almost tripled your income, you surely started saving more though, right? It's not really living paycheck to paycheck if you're putting away savings. The multimillionaire in the mansion down the street lives paycheck to paycheck too - he's got a lot of homes and properties to maintain - but if he loses his job he has millions in assets to cushion him. It's not the same thing as someone making $30k living paycheck to paycheck.
  - jandrewrogers 4y ago
selimthegrim 4y ago
Surely dollar vans are still a thing for example
yieldcrv 4y ago
Man, I love tax deductions too much to do things off the books I could have earned 7 figures that year and still get every stimulus check but I understand the need to go off the books if you are living in NYC state subsidized housing one city, two systems
gear54rus 4y ago
Well that definitely sounds like a dream haha How did they know what amounts attract attention? Trial and error? That would be pretty bad
- gen220 4y ago
  Not sure about it being a dream! They've constructed for themselves quite a nice life, but because it's technically in the shadows, there's a lingering paranoia that it can all be taken away. Re amounts: it's actually documented by the IRS to be $10,000 [1]. The bank is required to report cash deposits and transfers of $10k within a 24 hour period. [1]: https://www.irs.gov/newsroom/understand-how-to-report-large-cash-transactions https://www.irs.gov/newsroom/understand-how-to-report-large-...
counttheforks 4y ago
> As an example, I have a friend who grew up in a working class family in south Brooklyn. His mother's job was "on the books" and his father's construction work was completely off-the-books, paid in cash. Everybody in the family was very aware of the amount of money you could deposit in a bank account, in a given time period, without attracting IRS attention. I hope you reported them?
siftrics 4y ago
> The existence of this grey economy makes it very difficult to measure income and expenses for a large proportion of New Yorkers. Disgusting that your first thought is about how difficult it is to measure income and not the fact that working class people (your words) would lose a third of their income or more, if their work was in the formal economy. It's even worse if you look at it the other way: working class people's wages would be 50% more, rather than 33% less. Working class people (literally anyone who must work to have a modest lifestyle) should not be paying a larger percent of their wages than those who do not have to work.
- stevemk14ebr 4y ago
  Their comment is illuminating the current way things work, that's hardly disgusting. That status quo you may not like, but that's saying nothing about the author of the comment, or their views on that fact. Your anger should be at the system, not the author pointing out a fact.
- esrauch 4y ago
  The people with income levels in question don't have a marginal tax rate anywhere close to 33%. More like 11% for federal and 6% for NYS before any credits.
vagabund 4y ago
To this point, I dated a Russian girl from Brooklyn whose family had all their medical, dental, cosmetic, car repair, etc. work done by an extensive network of unlicensed Russian immigrants operating out of their apartments and garages. All cash obviously. I'd have never known it existed.
meroes 4y ago
My coworkers and I do not earn a living wage for our locale from our company. That’s easily tens of thousand of employees at one of the largest companies in the world. I doubt most locales earn living wages working there in our job and similar descriptions. But, some receive thousands in tips per year which go unrecorded. Plus the job easily provides side work with the same customer network which also provides thousands in unrecorded income. All to save the parent company some money, this huge grey network is spawned.
lifeisstillgood 4y ago
Off the books is getting harder and harder. I live in an area of the UK with basically no uber coverage (just to avoid confounding factors) and every taxi driver wants me to pay cash even though I never carry any - simply because taxi drivers have always had a small or large undeclared income. The corollary of this is that taxi drivers cannot raise their rates because that is regulated - and regulated at a level that was set when cash was common and so would be a level that baked in the tax fraud. A strange catch-22 but one I suspect is growing. As more of the world is online payments or nfc payments the less wriggle room there is.
Manuel_D 4y ago
I point this out to people all the time. How many businesses operate cash-only in places like Chinatown? Why do you think that is?
gernb 4y ago
That just reminds me of a conversation last night. A friend's parents live in South East Asia and have a live in helper (common). He was describing the helper's bedroom as small and I was like "you just described a common apartment size in Japan". Meaning, it was small because he's used to American sizes where the average residence size is 210 square meters where as in Japan is 93sqm add it's trivial to find apartments of 15sqm. No one blinks an eye because it's normal where as American often sees that and thinks it's some kind of exploitation. Some of you might have lived in a space that small for a few years in dorm room in collage. You likely survived and weren't traumatized for being in that space. This isn't to detract from the idea that many people in NYC might not be making enough money. Only that it's common to think people need more than they do ... And also that not being able to build smaller places means people end up having to pay for more than they could get by with.
JumpCrisscross 4y ago
> if you're poor and desperate, there are many ways to "live" that, while not particularly desirable to most people, are certainly available They make the same mistake everyone does when running living-wage statistics nationwide and blindly applying that methodology to New York: “assum[ing] that a one adult family would rent a single occupancy unit (zero bedrooms) for an individual adult household” [1]. Nobody does this. You get roommates. It’s a luxury to have a studio to yourself in New York, and there’s nothing shameful in that. [1] https://livingwage.mit.edu/resources/Living-Wage-Users-Guide-Technical-Documentation-2022-05-10.pdf https://livingwage.mit.edu/resources/Living-Wage-Users-Guide... page 6
nunez 4y ago
1000%. Restaurants in NYC are especially infamous for this (paying under the table) as are the trades
Valakas_ 4y ago
Some people on HN are living in a bubble, with their level of empathy akin to those of pwASPD. Sometimes I get sick reading some comments to see how detached some folks are. This is one of them. Discussing about the semantics of what "livable" means and whether the title is (in)correct while it doesn't change the grave reality of the situation at all. Unbelievable.
- gen220 4y ago
  Respectfully, you're projecting far too much into my comment. There are many human circumstances in NYC that are not acceptable, tenable, or sufferable. In fact, there are many that are exploitative, coercive, and frankly disturbing. The reality is that there are 20+ million people living in the NYC metro area, a number that is increasing monotonically every year. Their experiences can't be reduced to a number like this, but if you try to do it, you should do it in a way that doesn't insult or mislead. Part of being a New Yorker is "finding a way", and many of those ways fall outside the purview of studies like this one. This fact is our collective loss. All I'm saying is that there is a lot to be learned by studying the whole economy of the city and state, not only what's reported to the IRS and Census bureau. If you look at my cousin comments in this tree, hopefully you can see some context here. I understand that calling for more data can come across as callousness, when the goal is helping the city's poor. I think you're missing the fact that the two are orthogonal: you can want more data and action now, which is the camp I'm in.

by gen220 4y ago

yunohn 4y ago

Let me get this straight: your point is that some people run off-the-book businesses, and that explains the severe poverty and lack of living wage?

rektide 4y ago

It makes me so sad to see how many people chime in, to sign on to this complete willingness to take some obvious exceptions & caveats & use them to decide there's no problem, that everything is fine. The effort gone through to wring out excuses for having no empathy, for ignoring the truth is revilesome. I had a number of friends who sometime after highschool or college moved to NYC area & lived in ridiculously illegal cramped over-stuffed loud living spaces & struggled to eat, to be in the city. Struggling for jobs & work but feeling like they had to be in the city. These are mostly quite privileged folks who had good educations at good public schools, and still struggling to stay standing at all. NYC is absurd to me, is shocking in extreme in it's cost of living, limited housing options, in how hard it can be to get by. There's a huge question in my mind of how many people fare & make it, transplants & many many natives raised there. The findings here completely lines up with my expectation & the unfortunately stark reality of life in such an amazing place. There may be some light grift, and some higher scale grift such as buying whole appartments, but by god, it hardly seems to change how hard it can be to find place, to gain income of sufficient scale for that grift to be of any real scale.

mnky9800n 4y ago

What is this illegal economy and why is it unknown outside of NYC?

peruvian 4y ago
Cash businesses and a lot of cheating on taxes/income reports. I have some NYC-native friends whose parents make less than $20k a year on paper but own homes and generally live comfortably. This is common in their immigrant community. On top of that, people rent apartments to each other cash only, pay with cash at restaurants or grocery store, etc.
- konschubert 4y ago
  Must be fun to pay your taxes knowing that you are subsidising this BS. EDIT: I think my comment was't clear: I pay my taxes, just not in the US. :) I think that by tolerating tax cheating (withdrawing IRS funding), the US is punishing those who are honest. My comment was triggered by the very nonchalant way how the above comments made it seem like a normal NYC thing to steal tax money. If taxes are too high then they should be lowered. Selective enforcement is bad.
  - p0pcult 4y ago
    Just because other people cheat, doesn't mean that you should. Taxes are the price of civilization.
    - ben_w 4y ago
      While true, it can still cause resentment if $subpopulation appears to be able to get away with "cheating" — scare quotes because it's not well-defined, and the resentment still happens even when the "cheating" is necessary to maintain existence rather than comfort, e.g. "Why do disabled single mothers get paid to look after their kids?" and "Why do we pay to house these people who fled a war and don't know if their families are still alive?" etc. I don't have any solution here. Lots of resentful people claim to follow a specific dude that told rich people to pay their taxes, to give all their money to the poor, etc., and if a lifetime of religious practices don't persuade them what on earth can a random internet stranger like me do?

GordonS 4y ago

> There is a large, technically illegal, economy to NYC which doesn't appear in W-2s, 1099s or self-reported census income, that most people outside of it generally aren't aware of Can you say some more on what this means? (I'm an outsider, and have no idea!)

topkai22 4y ago
Lots of economic activity in New York is not reported to the government
tristor 4y ago
This exists in many places, it's not unique to New York City. In general what this means is one of three things: 1. Cash businesses that don't report income for taxation, so get to make effectively 40-50% more income from their revenue. In this case, I am using the term "business" to refer any income-generating activity for which you are not employed by another person. Yes, this counts the dude selling loosies. 2. A business which is itself illegal because of the nature of what you are selling. This could be as deep as narcotics, or as simple as trucking in cigarettes from out of state so you can sell them at a street news stand and pocket the difference in what would be otherwise taxes going to the state/city. 3. Being paid under the table, this includes things like illegal immigrants working on construction crews, as hotel maids, and back of house in restaurants, getting paid out at the end of the night on a daily basis ("day labor") in cash, never reporting any income for tax purposes. Generally speaking, when someone says "illegal economy" in a place like New York City, what they mean is the sort of petty tax evasion that naturally occurs amongst immigrant communities and the poor who would otherwise not be able to afford to reside/live there if they paid their taxes in full. New York City is effectively the highest taxation regime you can live in within the US. Major metros in California come close, but are not quite there. If you avoid every tax except sales tax, you can significantly improve your income potential at lower wages. It's the difference between taking home $17/hr or taking home $12/hr after tax, that extra $5/hr is nothing to be sneezed at, and amounts to an extra $10k/yr in your pocket if you work enough hours to be considered "full time" (which in the illegal economy usually means multiple "jobs" or hustles).
- 4y ago

giraffe_lady 4y ago

That may be a problem with the assessment but I don't see how that allows you to redefine what "the actual problem" is. To me it still very clearly seems to be that people don't get paid enough? Even the grey economy you mention is caused by that actual problem, is not a replacement of it.

gen220 4y ago
Sorry, I'm not meaning to say that people aren't getting paid enough. My phrasing choice was poor. I mean to say, it's very difficult to inform policy from data with big inaccuracies. I'd say the grey economy is caused by myriad issues. But it's a space where people are able to meet their needs (on the employer and employee sides). Even though most of us on this forum wouldn't accept those conditions, hundreds of thousands of people do. It's a nuanced issue that requires a lot of thought and research, before jumping to conclusions about whether it's bad or not. Anyways, IMO, if we want to understand whether peoples' lives are sustainable with their present wages in NYC, we have to measure their actual wages, which is inclusive of this grey economy, unlike the reported data source.
- giraffe_lady 4y ago
  Not really. I mean if you want to have a stupendously high bar of confidence, and continually raise it so that no action is ever necessary or possible, then yes you need to spend many more years to understand every nuanced economic detail. For me idk, I've lived a lot of my life in poverty and on the edge of it, and large swathes of my social and family communities still do. I don't need more proof. It's very obvious that most workers are not compensated adequately and this data confirms it unless you really really don't want it to.
  - gen220 4y ago
    I agree that we don't need the full picture to take meaningful action. I thought it was important to bring attention to the grey economy aspect, because so much of NYC would literally not function at all without it, and its existence and scale does have a meaningful impact on how you interpret this report (i.e. that the report is directionally correct, but its unbelievable magnitude is evidence that we can't reduce something as complex as poverty to a single number, especially when that number is essentially employee and employer-reported income).

disintegore 4y ago

I find it hard to believe that the amount of tax fraud in NY is enough to throw this figure off. Even if what you're describing is true, it would hardly be "the actual problem" here.

gen220 4y ago
Snippet from my reply to a similar sibling comment: Sorry, I'm not meaning to say that people aren't getting paid enough. My phrasing choice of "actual problem" was poor. I'll leave it up so this thread makes sense. My intended point was: if we want to understand whether peoples' lives are sustainable with their present wages in NYC, we should be measuring their actual wages, which is inclusive of this grey economy, unlike the reported data source. The amount of "tax fraud" required to impact the figure is less than one might imagine, because the "living wage" standard is quite low.
- disintegore 4y ago
  That's fair, but your post might have been more prescriptive than you intended. Your wording insinuates that New York doesn't actually have a problem with incomes relative to cost of living because most people make up for that through an informal economy. There is ambiguity, granted, but on the surface that looks like a massive stretch. The figure might be impacted, but for it to be completely eclipsed is another order of magnitude entirely.
  - gen220 4y ago
    You're right! I went ahead and edited it to hem closer to my original intent. I totally agree that NY has a significant (income:cost of living) problem. My main objective was to draw attention to the difficulties in measuring the size and distribution of this problem, caused by the unmeasured informal economy and unbalanced access thereto. I definitely don't think that the informal economy makes up for low reported wages, but it definitely is a ballast that we'd be better off understanding, given its scope and entrenchment.
settrans 4y ago

afavour 4y ago

Not saying this doesn't happen, obviously, but is it really going to be anything more than a rounding error?

TuringNYC 4y ago
It is probably a rounding error for white collar and technology workers (the crowd here.) However, I'd doubt this is a rounding error for other trades (construction, electrical, plumbing, etc) -- so many repairmen demand cash or demand premiums if paying via Zelle/etc.

themitigating 4y ago

Do you have proof of widespread tax evasion?

kube-system 4y ago
The last official estimates of the tax gap is $496 billion, and the IRS says that the number is likely approaching $1 trillion. https://www.irs.gov/pub/irs-pdf/p1415.pdf https://www.irs.gov/pub/irs-pdf/p1415.pdf https://www.reuters.com/article/us-usa-treasury-irs-idUSKBN2C0255 https://www.reuters.com/article/us-usa-treasury-irs-idUSKBN2...
- themitigating 4y ago
  That's for the country, we are discussing ny
  - kube-system 4y ago
    That's how widespread it is! :)
- alistairSH 4y ago
  But how much of that is low-wage workers? And how much is wealthy individuals trading in crypto, or hiring expensive lawyers/accountants to move their money around?
  - kube-system 4y ago
    Page 20 breaks it down by source a bit, and you can probably gain some insight from that. > And how much is wealthy individuals trading in crypto The total of all unreported capital gains are 18% of the tax gap, according to the document. So, significantly less than 18% > hiring expensive lawyers/accountants to move their money around? Tax avoidance wouldn't be capture in these figures, so zero.
  - adolph 4y ago
    > trading in crypto That would make it a negative number or more accurately an imaginary amount of tax evasion, right?

malfist 4y ago

> There is a large, technically illegal, economy to NYC which How do you know that? Your next statement is that there's no good way to measure that income, how do you know how large that economy is? It's either measurable, or immeasurable. You can't claim the know it's dimensions and also that you can't measure it's dimensions.

kube-system 4y ago
One can determine that something is large without measuring it accurately.
- rootusrootus 4y ago
  Yes, but there'd still be something more than conjecture and a single anecdote.
  - kube-system 4y ago
    There's this: https://www.irs.gov/statistics/irs-taxpayer-compliance-research https://www.irs.gov/statistics/irs-taxpayer-compliance-resea...
    - rootusrootus 4y ago
      That's a lot better than anecdotes, for sure. The short answer seems to be about 83% tax compliance.
  - InitialLastName 4y ago
    Anyone who has lived in the (NYC metro) region can almost certainly provide you more anecdotes. Filtering by circumstances I can personally attest to in NYC proper: - 3 situations where nannies were being paid entirely under the table (this one is less common now that everyone I know is over 26 and needs health insurance) - a small (legitimate) business owner who regularly employs a handyman under the table - restaurant staff who don't report cash tips (too common to count) - Street vendors all over the place (including those who were openly selling cannabis prior to legalization) - Tour guides working entirely for cash - Lots of technically-illegal off-the-books living situations (a living wage goes a lot further when you're willing to live in a basement studio apartment with no windows). - Small stores with a "regulars" discount that never hits the register

onlyrealcuzzo 4y ago

> The issue with these assessments of living wage in NY is that , if you're poor and desperate, there are many ways to "live" that, while not particularly desirable to most people, are certainly available. I came here to say this is merely evidence that a lot of people are willing to put up with a lot of BS to live in NYC. If it wasn't "worth it" to them - for whatever reasons that may be - they'd be living elsewhere.

htag 4y ago
I hear this a lot. I'm inclined to share the sentiment for the young student going to NYU, the intern at a museum/art gallery, or the actor waiting tables while auditioning and doing off broadway. They made a choice, and clearly think the city can offer them enough to deal with poverty and desperation. I'm less inclined to share the sentiment about people that were born and raised in NYC and have their entire social network there. They had less choice in the matter, and they might be even more desperate if they lost connection with their social support group. In addition, many people born and raised in NYC are missing skills that would be considered essential almost anywhere else in the US, such as how to drive a car. Regardless of how/why someone arrived in NYC, the prosperity of it's population is a direct concern of cities. The income of it's tax payers directly correlates to a city's tax base, and we've seen what happens when a city's tax income falls short of projections. Poverty and desperation also seem to go hand in hand with expensive problems (for the city) such as crime and poor public health.
- mattzito 4y ago
  > I'm inclined to share the sentiment for the young student going to NYU, the intern at a museum/art gallery, or the actor waiting tables while auditioning and doing off broadway. They made a choice, and clearly think the city can offer them enough to deal with poverty and desperation. Perhaps I missed these personas in the original article, but these are very charitable examples of "poverty and desperation". Most people interning at museums and art galleries (in my experience) come from families who can at least afford to subsidize the cost of living in NYC. Waiting tables while auditioning and doing off broadway is actually a pretty decent way to earn a living - I had/have friends who have been doing that for 15-20 years and earn solid incomes, in some cases enough to raise a family. I went to nyu, and while it was a while ago, I'm told that if anything, NYU students are more privileged than they were when I went there. The real examples of poverty and desperation are the immigrants who are effectively forced to work in sweatshop conditions, or the women who pick up hours here and there in childcare in their neighborhood, or the security guards who live out of their cars or in homeless shelters because they don't get paid enough to end up in a stable living environment. In some cases, they don't have a network outside of NYC they could lean on, or don't have the resources to get to another city, or are (justifiably) scared of what would happen when they got there.

Brian_K_White 4y ago

If the problem is not that you can't live, but that you can't live officially, I would say that is still a problem.

rr888 4y ago
A good 5-10% of the population are illegal immigrants so that isn't a good start.
malandrew 4y ago
Yeah, it's still a problem, but the problem is with the powers that be that set the rules for what it means to live officially. The wages are less of a problem here than the theft by government of the fruits of ones labor. The wages payable are still at the mercy of what the market will bear. If these people could not find a way to live officially, in many cases it's highly unlikely that the wage could rise to cover their cost of living and the taxes to be paid, meaning the job would no longer exist. At the end of the day, you can't tax a society into prosperity. Every tax dollar spent needs to be justified on an ROI for society.
simonh 4y ago
It's many problems. It's not a simple situation because it's one that has evolved over many generations. Is it working people defrauding the government? Is it the government abrogating it's responsibility to manage the economy and tax people fairly and provide effective services to the community? Is it a haven for criminality of a more sinister and even violent kind that inhabits the grey economy and turns it black? All of the above, but it's hard to reform because the people who live this way and suffer many of the disadvantages that result from it are also deeply complicit in it's operation.

i_am_proteus 4y ago

From my experiences living in NYC, this seems directionally correct and very difficult to measure. Tack on that cost of living in NYC varies wildly depending on rent-stabilized and rent-controlled apartment arrangements (rent control is more strict than rent stabilization, rent stabilization is more common than rent control). There are millions of New Yorkers living in rent-stabilized apartments, and they might earn enough to live in their current pad but not be able to move somewhere else at market rate. Similarly, property values have skyrocketed, so people living in homes they bought decades ago might be comfortable, while earning a wage that is technically not "living" by the standards of thhis academic research.

woodruffw 4y ago
Excellent summary. I have a lot of friends who grew up in rent controlled (in the 1940s law sense) units, and they'd probably be considered "below the living wage" according to these sorts of metrics. Combine that with the massive informal economy, and it becomes very difficult to perform accurate econometrics on the city as a whole.
- klyrs 4y ago
  If those people living in rent controlled units move, can they find a place with the same rent? Or would they need to move to a different state, away from their friends, family, community and job?
  - woodruffw 4y ago
    Probably the latter. There are many senses in which it's not ideal; at the same time, I think most people in NYC would happily take a rent controlled unit (if they're not already living in one).
    - klyrs 4y ago
      Yep. And what rent-controlled units exist, have huge waiting lists. If you don't like the place, or if your landlord is negligent or an abusive jerk, then too bad, them's the breaks. You're "happy" to take such a place because the alternative is worse. That doesn't mean it's good.

boredumb 4y ago

I lived near a bodega in east harlem that was cash only and had a bitcoin ATM in the corner.

theGnuMe 4y ago

If only someone studied this... https://budgetmodel.wharton.upenn.edu/issues/2021/4/30/map-income-underreporting-by-state https://budgetmodel.wharton.upenn.edu/issues/2021/4/30/map-i... New York is about 11k undeclared on average per taxpayer. Now living wage rates: https://livingwage.mit.edu/counties/36061 https://livingwage.mit.edu/counties/36061 Living wage for an adult with 0 children is $25.42 per hour and minimum wage is $15. So let's say that difference is $10. $11k is 1100 hours which is 137.5 eight hour days just do bring you up to a living wage. Note that this excludes any dependents. Factor in a non-working spouse or kids and the discrepancy is worse.

Eumenes 4y ago

[flagged]

Supermancho 4y ago
Some taxes are. Taxation is the only methodology to manage large modern populations, that are not effectively self-sufficient.
kube-system 4y ago
If taxes are theft, is it immoral to use tax subsidized goods and services?
- roflyear 4y ago
  I think it would be!
0xbadcafebee 4y ago
Found the anarchist!

quijoteuniv 4y ago

Do you think that people will choose illegal out of whim? I saw in manhattan that people where struggling behind low paid jobs. Low pay in scandinavia is above that threshold and people can afford a (more than decent) living.

johnchristopher 4y ago

"Akshually, poor people are cheating on taxes and are way richer than you'd think".

notch656c 4y ago
Not necessarily poor people, but something like half of the world's workforce is "informal." Not formally recorded. The on-the-books view is way different than the total view.
tetromino_ 4y ago
Actually, in NYC it's not just poor people who are cheating on taxes. Tax fraud here can get pretty wild.
woodruffw 4y ago
This isn't a kind or charitable way to respond. The GP isn't making any sort of moralizing claim about "cheating" or the city's underclasses being "way richer" than measured.
- johnchristopher 4y ago
  Went straight from "if you're poor and desperate [..] there are many ways to "live" that, while not particularly desirable to most people, are certainly available" to "I have a friend "whose family know how to work off the books and avoid the IRS [..] bought a building in Brooklyn for a low million dollar figure [..]. But their household was probably below the "living" wage, from the point of view of this data set, for the past 25 years." That's a sleight of hand. "But look, I know some poor people who cheat !". Yeah, a minority cheats. Now if someone can come up and say there are way less poor people than we think in NY and back it up it'd be another story.
deleted 4y ago
[deleted]

zehaeva 4y ago

The fun part of your example is that the top line numbers they talk about are for NYS, not for NYC. In fact they call out NYC for having Manhattan boasts the state’s highest percentage of residents – more than 80% – earning a living wage. Which seems to not line up with your assessment

endtime 4y ago
Manhattan is only one of five boroughs of NYC, and it's the wealthiest of the five.
woodruffw 4y ago
Manhattan is 1/5th of NYC by municipality, and about 1/6th of the city by population. It's historically the wealthiest borough, so it's not particularly surprising that its residents would have a higher-than-average living wage attainment percentage.
wikfwikf 4y ago
Manhattan is not NYC. Most poor people live in the other 4 boroughs. Most wealthy people live in Manhattan (and Brooklyn).
- onemoresoop 4y ago
  New York City is composed of five boroughs: The Bronx, Brooklyn, Manhattan, Queens, and Staten Island. Each borough is coextensive with a respective county of New York State.
  - the-printer 4y ago
    I think what he means is that Manhattan alone does not comprise the entire city.

rospaya 4y ago

How do you comment on more than 100 thousand homeless children in NYC? Are they also a part of some cash scheme? https://www.nytimes.com/2022/10/26/nyregion/nyc-homeless-students.html https://www.nytimes.com/2022/10/26/nyregion/nyc-homeless-stu...

woodruffw 4y ago
Your own article addresses this: NYC (correctly!) counts students as homeless even if they're living long-term with other families or in family shelters, of which the city has many. "100,000 homeless children" does not mean "100,000 street urchins." It means that many of the people who make up NYC's informal economy have living situations that the city (again, correctly) classifies as unstable, or who are dependent on the city for stable housing.
- PaulHoule 4y ago
  The eye-popping numbers of "homeless" in NYC are not comparable to the situation in California. Many of the "homeless" in NYC are immigrant families in shelters. As NYC is a portal for immigrants coming to the US and some of them end up in difficulty, this is how it is. This is different from the situation in California where the "homeless" really are sleeping outside.
  - woodruffw 4y ago
    Precisely. There are very few things that I give the city credit for with respect to how it treats its homeless and unhoused populations, but categorization is one of them: the city doesn't attempt to sweep the problem under the rug by pretending that shelters (including family shelters) are long-term housing solutions that offer stable lives for their residents.

0xbadcafebee 4y ago

Have you viewed the map? https://blogs.cornell.edu/livingwage/ https://blogs.cornell.edu/livingwage/ Almost all of the red sections are outside of NYC. They don't have access to this NYC underground economy. Though The Bronx and Queens are some of the worst-affected areas, Erie and Rochester come up right behind. The racial and ethnic slant is also hard to miss. If the NYC underground economy is indeed the only thing keeping minorities afloat, that means the economy is dependent on exploiting minority communities (keeping them working in illegal ventures, preventing upward mobility). If you select the Finger Lakes region (5 hours away from NYC), and then select Race-Ethnicity, it couldn't be starker. Workers of Color lights up most of the map in red, with a median income of $16.80-$25.00. Select White Worker, and it's very light red and mostly green, centered around the city, with $21.48-$32.49. White people do well and everybody else struggles.

SilasX 4y ago
>The racial and ethnic slant is also hard to miss. If the NYC underground economy is indeed the only thing keeping minorities afloat, that means the economy is dependent on exploiting minority communities (keeping them working in illegal ventures, preventing upward mobility). Or, alternatively, that the tax structure of the area is so abusive that the economy depends on tax evasion.
scarmig 4y ago
> If the NYC underground economy is indeed the only thing keeping minorities afloat, that means the economy is dependent on exploiting minority communities (keeping them working in illegal ventures, preventing upward mobility). The flip side of the coin is that there's a reason people work in illegal ventures: making them fully legal would make them uneconomic, because of a combination of taxes and regulations, and also hurt upward mobility. You see that in places like France, where the youth unemployment rate tends to fall in the 20-25% range. (Though that too gives an overly negative representation of the state of things: France also has a significant shadow economy, so things aren't actually as bad as they might look there.) It's a game of tradeoffs. What's probably ideal is to move as much as possible into the formal economy, regulate only those things which you can actually afford to regulate and enforce, and tax to the extent you don't drive things underground or out of jurisdiction.

malandrew 4y ago

This raises the point that I don't think gets enough attention: taxes for many are a barrier towards life goals. For some like the folks you mentioned, it's a barrier to putting a roof over your head or buying your first home. For others, they can afford housing, but taxes are the difference between being able to save for retirement or not. That's not to say that there aren't things of value we get for our taxes, but there are a LOT of ways that our taxes are squandered, especially at the federal level, which sadly is the largest chunk of taxes. We all pay the most in federal taxes and get the least in return for federal taxes. State taxes are the second most paid and we get see benefits from them than federal but less than local. Local taxes are often the least amount but the most likely to be spent on things that actually benefit you personally. We could help everyone make better progress towards life milestones like owning housing and saving for retirement if we collectively held government accountable for how it spends our taxes and reduced taxes across the board.

konschubert 4y ago
If the law is bad, you have to change the law. If you instead choose to selectively enforce the law, political power is transferred from the legislative to the individuals who selectively enforce the law. That's how you get Russia.
ryanwaggoner 4y ago
Eh, a huge percentage of the population pays no federal income tax at all. They pay payroll taxes, but they also get a specific benefit from those taxes, it doesn’t disappear into some black hole of defense spending or whatever. Edit: https://www.cnbc.com/amp/2022/03/25/57percent-of-us-households-paid-no-federal-income-tax-in-2021-study.html https://www.cnbc.com/amp/2022/03/25/57percent-of-us-househol...
pjc50 4y ago
In general, "not having enough money" is a barrier towards life goals, whether that's from the taxman, rent, commuting costs, fuel, wage suppression, wage theft, or whatever. > taxes are the difference between being able to save for retirement or not In countries with state pensions, some of the taxes are saving for retirement. There's a lot to be said for the idea of reducing the friction of income taxes and shifting instead to property or land value taxes, though. It's a lot harder to conceal a building or move it offshore.

eatsyourtacos 4y ago

> but "60% of new yorkers are not earning a living wage" is inaccurate If we define living way as proper healthcare, paid time off, paid sick leave, adequate income to put into savings/retirement.. enough money for education, childcare.... then do you think that number is inaccurate? I sure don't. And this doesn't have much to do with new york. At least half of the US population lives under these conditions.. probably even more. The term living wage means more than putting a roof over your head and having a job. It's being able to not feel basically like a slave.

gen220 4y ago
The (uncomfortable for us) reality is, for many people living in NYC, the things you mention are not considered minimum standards for a happy or fulfilled life. 4.4 million people in NYC are immigrants, many of them coming from situations where the phrase "standard of living" carries no water. These people want their children or childrens' children to have the life you describe, and see that as fair. I'm not saying it's a good thing or an acceptable thing, merely calling it what it is. I agree with you that the government should be funding a higher standard of living for all. But reality as it exists today is more complicated than the platonic ideals we'd like it to be.

abeppu 4y ago

This economy exists, but I think it's still arguable whether the people you're talking about are "earning" a living wage. Setting aside the measurement problem, consider 2 households: - household A takes in (1+C)X dollars of W2 income, keeps X after taxes, and steals Y = CX/(1-C) to get to the "living wage" level of income. - household B makes X + Y in off-the-books cash, and thus doesn't pay C(X+Y) in taxes. Both have the same take-home pay. Household A steals the same amount household B saves from tax fraud/evasion. We wouldn't say that household A "earned" their living wage, even if we could measure it. If Y of their income is ill-gotten, it isn't "earned". Neither should we say that the household B is "earning" their take-home pay amount. Meanwhile, they're benefiting from a government which is subsidized by their more law-abiding neighbors. Said otherwise, for the same level of state + city per-capita spending, their neighbors could have a lower tax rate if the illegal economy were smaller. We casually like to think that not paying taxes is victimless, but this is an illusion; the victims are literally everyone who is paying taxes.

pdonis 4y ago
> they're benefiting from a government Are they? Is the government actually benefiting the people we are talking about, on net? I strongly suspect that the answer to that question is "no". And if that is the case, the people who aren't paying taxes could justly respond that the people who are paying taxes are enablers, keeping a government in existence that does not provide the benefits the taxes are supposed to be paying for.
- abeppu 4y ago
  If you disapprove of the way funds are being spent, the appropriate response is to campaign and vote for what you think are more reasonable policies. Saying that tax-payers are the criminals by propping up a system with abuses is just as nonsensical as saying that non-thieves are criminals for propping up a system of property rights which creates abuses. NYC has persistently been an economic hub and a place where people sacrifice a lot to live and work. NY as a state and NYC both have quite significant public spending. I think on a per-capita basis, the NYC municipal budget alone is is in the range of ~$11k/head and the state budget is another $10k/head. Do you think those facts are unrelated? If you look at NYC's evolution over history, it has repeatedly needed active government programs to make a dense city function, and to actively support trade, commerce and finance. In the absence of coordination and expenditure, I think Manhattan's growth would have been capped by sanitation issues or the limited water supply centuries ago. There are plenty of places (most) in the country with lower per-capita public expenditure, but none of them have succeeded in creating NYC's economic success. Do you think that's an accident?

CivBase 4y ago

> "60% of new yorkers are not earning a living wage" is inaccurate Sure, but "60% of New Yorkers break the law to make a living wage" isn't any less scathing. Either way, the situation looks pretty bleak. At this point, I can't see a future where NYC doesn't become the next Detroit.

atyppo 4y ago
I don't think you know much about how Detroit collapsed if you're saying that. While crime and public safety have become issues, I think most of the blame can be assigned to police too lazy to do their jobs.
- 988747 4y ago
  And NYC is one of the prime examples of "defund the police" movement, isn't it?
  - atyppo 4y ago
    [dead]
woodruffw 4y ago
You can't see a future in which the US's (and arguably the world's) financial and cultural capital doesn't have the same fate as an industrial city?

whywhywhydude 4y ago

A lot of NYC benefits- subsidized or free health insurance, subsidized housing, food stamps, free child care benefits, etc only kick in if your income is below a certain threshold. It’s very easy to work off the books in NYC and collect the benefits while still making a decent amount of money in cash.

wcunning 4y ago

Additionally, it would appear that the Cornell data set, coming from the Census Bureau, suffers from the typical problem in most of these data sets -- it is income only, not income net of taxes and transfers. About 1/2 of the US population pays no direct income tax, and of that 1/2 many receive a large share of transfer from government in the forms of Medicaid, food stamps, EITC, etc. After taking into account all of those non-taxes and transfers, this group is much better off than a lot of the publicly available data sets would indicate. This is mostly due to the difficulty of getting all of that information together on each individual in the data set, whereas looking at a reported W2 value is comparatively easy.

no_wizard 4y ago

I've heard of this being prevalent in NYC in particular. I remember reading a story, and it was corroborated by some folks I knew at the time, in particular about car repair shops and adjacent activities (like pick n pull style places, part resellers etc). The police, in large, know that a lot of these places use gray area sources for getting parts and sometimes labor, but they're not really itching to do much about it on that level, because it provides this type of employment across the board in the burroughs where its most prevalent. I have no idea how true this is today, but in circa 2015 or so, seemed to very much be the norm.

gorwell 4y ago

It's also wordplay to cover for the fact that many live beyond their means. Earn more, spend more. Lifestyle inflation is more common than we like to admit. When I made $30k per year I lived paycheck to paycheck. When I made $50k per year I moved into a larger apartment and lived paycheck to paycheck. When I made $80k per year I bought a new car and starting ordering food with UberEats, and well, you get the point.

sterlind 4y ago
my partner managed to save up over a period of a year until their car died, and had to spend all their savings buying a used one (the most they could afford) which will probably not last long. they also spend a majority of their income paying off debt, mostly the monthly minimum on credit cards they ill-advisedly used to pay rent when they lost their job. being poor is expensive.
- autoexec 4y ago
  > mostly the monthly minimum on credit cards they ill-advisedly used to pay rent when they lost their job. What is advised in that situation? Homelessness? A lot of people found themselves dealing with that during the pandemic and they ate up all their savings and/or ran up debt just to keep a roof over their heads and food on their tables. If I had found myself in that situation I'd probably have broken the lease and moved in with friends/family but not everyone has others who they can depend on to take care of them like that.
ModernMech 4y ago
When you almost tripled your income, you surely started saving more though, right? It's not really living paycheck to paycheck if you're putting away savings. The multimillionaire in the mansion down the street lives paycheck to paycheck too - he's got a lot of homes and properties to maintain - but if he loses his job he has millions in assets to cushion him. It's not the same thing as someone making $30k living paycheck to paycheck.
- jandrewrogers 4y ago

selimthegrim 4y ago

Surely dollar vans are still a thing for example

yieldcrv 4y ago

Man, I love tax deductions too much to do things off the books I could have earned 7 figures that year and still get every stimulus check but I understand the need to go off the books if you are living in NYC state subsidized housing one city, two systems

gear54rus 4y ago

Well that definitely sounds like a dream haha How did they know what amounts attract attention? Trial and error? That would be pretty bad

gen220 4y ago
Not sure about it being a dream! They've constructed for themselves quite a nice life, but because it's technically in the shadows, there's a lingering paranoia that it can all be taken away. Re amounts: it's actually documented by the IRS to be $10,000 [1]. The bank is required to report cash deposits and transfers of $10k within a 24 hour period. [1]: https://www.irs.gov/newsroom/understand-how-to-report-large-cash-transactions https://www.irs.gov/newsroom/understand-how-to-report-large-...

counttheforks 4y ago

> As an example, I have a friend who grew up in a working class family in south Brooklyn. His mother's job was "on the books" and his father's construction work was completely off-the-books, paid in cash. Everybody in the family was very aware of the amount of money you could deposit in a bank account, in a given time period, without attracting IRS attention. I hope you reported them?

siftrics 4y ago

> The existence of this grey economy makes it very difficult to measure income and expenses for a large proportion of New Yorkers. Disgusting that your first thought is about how difficult it is to measure income and not the fact that working class people (your words) would lose a third of their income or more, if their work was in the formal economy. It's even worse if you look at it the other way: working class people's wages would be 50% more, rather than 33% less. Working class people (literally anyone who must work to have a modest lifestyle) should not be paying a larger percent of their wages than those who do not have to work.

stevemk14ebr 4y ago
Their comment is illuminating the current way things work, that's hardly disgusting. That status quo you may not like, but that's saying nothing about the author of the comment, or their views on that fact. Your anger should be at the system, not the author pointing out a fact.
esrauch 4y ago
The people with income levels in question don't have a marginal tax rate anywhere close to 33%. More like 11% for federal and 6% for NYS before any credits.

vagabund 4y ago

To this point, I dated a Russian girl from Brooklyn whose family had all their medical, dental, cosmetic, car repair, etc. work done by an extensive network of unlicensed Russian immigrants operating out of their apartments and garages. All cash obviously. I'd have never known it existed.

meroes 4y ago

My coworkers and I do not earn a living wage for our locale from our company. That’s easily tens of thousand of employees at one of the largest companies in the world. I doubt most locales earn living wages working there in our job and similar descriptions. But, some receive thousands in tips per year which go unrecorded. Plus the job easily provides side work with the same customer network which also provides thousands in unrecorded income. All to save the parent company some money, this huge grey network is spawned.

lifeisstillgood 4y ago

Off the books is getting harder and harder. I live in an area of the UK with basically no uber coverage (just to avoid confounding factors) and every taxi driver wants me to pay cash even though I never carry any - simply because taxi drivers have always had a small or large undeclared income. The corollary of this is that taxi drivers cannot raise their rates because that is regulated - and regulated at a level that was set when cash was common and so would be a level that baked in the tax fraud. A strange catch-22 but one I suspect is growing. As more of the world is online payments or nfc payments the less wriggle room there is.

Manuel_D 4y ago

I point this out to people all the time. How many businesses operate cash-only in places like Chinatown? Why do you think that is?

gernb 4y ago

That just reminds me of a conversation last night. A friend's parents live in South East Asia and have a live in helper (common). He was describing the helper's bedroom as small and I was like "you just described a common apartment size in Japan". Meaning, it was small because he's used to American sizes where the average residence size is 210 square meters where as in Japan is 93sqm add it's trivial to find apartments of 15sqm. No one blinks an eye because it's normal where as American often sees that and thinks it's some kind of exploitation. Some of you might have lived in a space that small for a few years in dorm room in collage. You likely survived and weren't traumatized for being in that space. This isn't to detract from the idea that many people in NYC might not be making enough money. Only that it's common to think people need more than they do ... And also that not being able to build smaller places means people end up having to pay for more than they could get by with.

JumpCrisscross 4y ago

> if you're poor and desperate, there are many ways to "live" that, while not particularly desirable to most people, are certainly available They make the same mistake everyone does when running living-wage statistics nationwide and blindly applying that methodology to New York: “assum[ing] that a one adult family would rent a single occupancy unit (zero bedrooms) for an individual adult household” [1]. Nobody does this. You get roommates. It’s a luxury to have a studio to yourself in New York, and there’s nothing shameful in that. [1] https://livingwage.mit.edu/resources/Living-Wage-Users-Guide-Technical-Documentation-2022-05-10.pdf https://livingwage.mit.edu/resources/Living-Wage-Users-Guide... page 6

nunez 4y ago

1000%. Restaurants in NYC are especially infamous for this (paying under the table) as are the trades

Valakas_ 4y ago

Some people on HN are living in a bubble, with their level of empathy akin to those of pwASPD. Sometimes I get sick reading some comments to see how detached some folks are. This is one of them. Discussing about the semantics of what "livable" means and whether the title is (in)correct while it doesn't change the grave reality of the situation at all. Unbelievable.

gen220 4y ago
Respectfully, you're projecting far too much into my comment. There are many human circumstances in NYC that are not acceptable, tenable, or sufferable. In fact, there are many that are exploitative, coercive, and frankly disturbing. The reality is that there are 20+ million people living in the NYC metro area, a number that is increasing monotonically every year. Their experiences can't be reduced to a number like this, but if you try to do it, you should do it in a way that doesn't insult or mislead. Part of being a New Yorker is "finding a way", and many of those ways fall outside the purview of studies like this one. This fact is our collective loss. All I'm saying is that there is a lot to be learned by studying the whole economy of the city and state, not only what's reported to the IRS and Census bureau. If you look at my cousin comments in this tree, hopefully you can see some context here. I understand that calling for more data can come across as callousness, when the goal is helping the city's poor. I think you're missing the fact that the two are orthogonal: you can want more data and action now, which is the camp I'm in.