Alfonse D'Amato

Long Island’s shrinking middle class

Posted

President Obama and Hillary Clinton continue to throw out economic numbers and statistics, claiming that the American economy is stronger than ever, since there are more jobs in varied industries and much less unemployment.

However, if you ask the average American whether he or she is thriving in today’s economy, you’d get a different answer. In a survey of 1,000 Americans by GoBankingRates, 69 percent of those polled said they had less than $1,000 in their bank accounts and were living paycheck to paycheck. Even more surprising was that this was regardless of their income. The numbers were the same whether people earned $30,000 or $300,000!

The reality is that the percentage of families earning middle-class incomes fell in nearly nine out of 10 metro-area households across the country between 2000 and 2014, according to the Pew Research Center.

Don’t just take my word for it. An extensive study conducted by the Long Island Association Research Institute reaffirmed many recent reports that show a shrinking middle class. The number of Long Island households that fall into the “middle class” category has dropped 9 percentage points since 1990, and is expected to be in the minority within the next 30 years.

Let me repeat — the middle class on Long Island will be a minority in the next 30 years. That is scary news.

When I first ran for the U.S. Senate in 1980, my entire campaign was focused on the “forgotten” middle class. Now the middle class will be forgotten, because they are being obliterated!

Today, middle class people are working class or lower class because they simply cannot afford to keep up with the cost of living on Long Island and elsewhere in New York state. They deal with extraordinary property tax rates, high state and local taxes and a high cost of living that often includes mountains of college debt.

According to the LIA report, middle-class families are defined as those with 2014 earnings between $46,165 and $184,657. In 2014, 57.8 percent of local households on Long Island were categorized as middle class. This represented a 5.7 percent decline, from 572,564 in 1990 to 539,784 in 2014.

As Newsday pointed out in an article about the LIA poll, Long Island residents take great pride in their middle-class status. After all, we created the suburban middle class when Levittown was built in Nassau County after World War II. This gave middle-class Americans an opportunity to get out of the city and move to the suburbs.

If the downward trend continues, however, the middle class will drop to under 50 percent of the population in less than 30 years. At the same time, the number of wealthy households on Long Island climbed 5.7 percentage points from 1990 to 2014.

Long Island has some of the highest tax rates in the country, and that creates a huge burden for local businesses and homeowners. The high tax rates are killing jobs and opportunity. Companies are fleeing Long Island because they cannot afford to pay them. When the jobs leave, so do the young people. Look at Bethpage-based Grumman. At one point the company employed 25,000 local workers; today that number has shrunk to 400.

Think about recent college graduates and young people you know. More often than not, I hear of people moving to booming new cities like Denver, Charlotte, Dallas and Tampa, where there are high-paying tech and other exciting job opportunities. You know what else you get in a state like Florida? No state income tax. How can we compete with that?

It’s not just Grumman. There is a phenomenon of small businesses being crushed by our country’s tax rates, coupled with the increased health care costs caused by the Affordable Care Act, a.k.a. Obamacare. It’s hard to imagine things getting any better when college costs are up, school taxes continue to hit astronomical levels and middle-class salaries remain stagnant. How does a Long Island middle class family not live paycheck to paycheck?

The LIA should be applauded for taking on this research. It is critically important to understanding our economy. Is this the life we want for our children and grandchildren?

Before you go and cast your ballot in just three weeks, I urge you to think long and hard about which candidates you believe will be the best for our economy and our middle class.

Al D’Amato, a former U.S. senator from New York, is the founder of Park Strategies LLC, a public policy and business development firm. Comments about this column? ADAmato@liherald.com.