Ms. Kim, a 40-year-old resident of Manhattan, is considering moving out of New York. She lives with her two sons in a two-bedroom apartment that costs her $2,700 a month in rent, more than twice the national average. She wants to move to a bigger apartment in Manhattan so that her children can have more space as they grow older. But, like so many Manhattanites, she can't afford a larger apartment. In fact, she can just keep up with the cost-of-living expenses that come with a Manhattan address.
"The costs for rent, education, health care coverage, daycare, city taxes, restaurants, food, gas, parking – everything – are already higher than anywhere else, and just keep climbing. Sometimes I'm not sure how to pay for all of these things. It's becoming almost impossible. I don't think I can continue to live in Manhattan and I'm not alone. Almost all of my neighbors are in the same bind," Ms. Kim commented.
The idea that everyone living in Manhattan is wealthy, or even that they have enough money to cover their living expenses, is far from the reality of life in the heart of New York City, where rents alone are over 50 percent higher than in San Francisco, the country's second most expensive city.
As prices rise, the economic depression continues and financial crises follow one on top of the other, increasing the numbers of middle-class New Yorkers being pushed out of the borough. In 2006 alone, an estimated 150,000 middle-income residents left the city. And now, perhaps for the first time, middle-class Korean families find themselves in this difficult situation.
Climbing food prices and other cost-of-living expenses are increasingly difficult to meet given the derailed economic situation on Wall Street, massive corporate layoffs, hiring freezes, wage caps, etc. These financial woes are more burdensome than the normal difficulties of living in the city: crime, noise, pollution, a crumbling infrastructure, the search for good schools, recreational areas. Added together, the answer seems to be to move. Cities such as Philadelphia, Charlotte, or Atlanta are now the preferred destinations among those making the move out of New York.
On Feb. 5, the Center for an Urban Future (CUF) released a report on New York City, which seeks to explain the current trend of middle-class migration out of the city. According to the report, while the cost-of-living expenses climb – for the products, goods, and services – the buying power of the dollar is shrinking. The study points out that the same amenities and services cost less elsewhere, enabling the average middle-income family to live much better. A New Yorker with a salary of $120,000 could enjoy the same lifestyle with a salary of only $50,000 in Houston, TX.
Center for an Urban Future notes that the middle-class in New York is struggling to stay where it is, but many people are slipping to lower class brackets due to the high cost of living. But added to the high costs are a slew of financial woes: continued declines in property values, increased loan and credit card interests (the results of the mortgage fiasco, including scarce credit even for those still with money), and now, fortunes lost to money scams. All of these factors contribute to the current anxiety that many New Yorkers confront on a daily basis. The only way out for many of them is literally the path out of the city. We are seeing a migration of the middle-class out of New York.
Economic experts are clearly taking this migration seriously; many predict that one day there will be no middle-class in New York at all, and that this will have a devastating effect on the local economy, which might go belly up as the gap between the rich and the poor widens.
Many experts point to Long Island, where 19 percent of middle-class residents earning between $85,000 and $115,000 have relocated out of county, or even out of state. The expansion of lower-middle-class residents has had a significant downward impact on the local economy.
