– As the mayoral campaign enters its closing days, a new Manhattan Institute report examines the record of Mayor Bill de Blasio on his signature issue of income inequality. Adjunct fellow Alex Armlovich finds that income inequality stands at exactly the same level as it was when former Mayor Michael Bloomberg left office, notwithstanding de Blasio’s pledge to reduce it.
Armlovich’s findings include:
- De Blasio has not been able to reduce income inequality in New York City, as measured by the Gini coefficient as well as the Theil Index.
- The mayor’s policies have had little impact on income inequality. Instead, fluctuations in the compensation of the wealthiest New Yorkers, especially those in the finance sector, make the most difference. Lower pay for those in finance tends to reduce inequality, higher pay to increase it.
- In 2016, a modest decline in the concentration of compensation in the finance sector reduced income inequality to about the same level as when Bloomberg left office.
Armlovich concludes by noting the limits of income inequality as a gauge for success. Mayor de Blasio’s effort to build affordable housing may help select low-income households stay in the city —but nonetheless increase inequality because of the low level of their earnings. On the other hand, a tax increase on wealthy residents may reduce inequality—but only by driving the rich out of the city.