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11 Oct, 2010 21:19

NYC income gap greater than India’s

While a lucky few in New York City are enjoying the highlife, dozens of thousands of New Yorkers are barely making ends meet. The gap in their incomes has become wider than ever before.

In New York, luxury lives side by side with those for whom surviving in a tough economy has become a full-time job.

Those for whom Chanel and Louboutin shoes are a wave of a wallet away walk around the city right next to those whose entire life belongings are dragged around in a shopping cart.

“The rich people in New York are richer than rich people most places”, said author of “740 Park: The Story of the World’s Richest Apartment Building,” Michael Gross, who knows all the details of the secret lives of the rich.

According to a recent published report, the gap between the rich and poor in the Big Apple is greater than in India, where one third of the world’s poor live.

We live in a winner take all society. Where there is a small number of stars, who make vast salaries, and where the majority of people have too much month left at the end of the money,” explained financial analyst Michael Wolff.

Last year, one and a half million people were registered living in poverty in New York.

Meanwhile, the city’s richest have been enjoying the high life.

The rich people of New York are flying around on private planes, eating caviar, renting yachts,” said Gross.

The net worth of the less than 60 richest New Yorkers has recently spiked by an entire $19 billion dollars.

One percent of the population controls seventy percent of the returns to wealth. It’s never been that high, it’s never been that bad,” said RT contributor Danny Schechter.

This state of affairs ends up reflecting mostly on the less fortunate.

RT asked New Yorkers from both sides of the income gap what they can afford to spend money on, and how much they are willing to splurge.

I can spend five thousand dollars on a piece of jewelry, or a handbag,” said one lady on Madison Avenue.

Just a couple of streets away, in Spanish Harlem, the question whether anyone would be willing to spend five thousand dollars on a purse was not even taken seriously. Here, people are struggling to make ends meet and can’t even imagine that kind of money.

Housing has become one of the main symbols of the existing wealth gap.

In New York there are three bedroom apartments that are selling for four and a half million dollars. A few blocks away is a public housing project, where the average rent is probably two hundred dollars a month. The disparity is huge.

Realtors selling luxury property are far from afraid of going out of work.

The most expensive property I have sold is about eight million dollars. New York has rebounded quicker from the recession in 2009 than any other major American cities,” said real estate agent Margaret Kimberley.

Every night about one thousand people sleep in the subway system in New York. Meanwhile, the most expensive hotels are doing as well as ever.

The luxury hotels are where over two thousand dollars can be spent on a room per night, and where guests indulge in platinum massages for three hundred dollars a private session.

While the number of people relying on a free meal has gone up by 50 percent over the last year, others are not keeping track of their spending habits at all.

Three thousand, four thousand. I don’t know,” said one woman on Madison Avenue, trying to remember what the most expensive purchase she had recently made was.

Right now, we are debating about whether or not to give tax breaks to the richest Americans, to keep this gap going, to keep it growing,” said Schechter.

But if this gap widens even more, New York may soon be split into two different cities – a big one with tens of thousands struggling for survival, and a small one with the very lucky few.

That future for the Big Apple could not be far – especially when the city’s mayor is considered the second richest person in town.

The trend in New York City is happening across the US, especially in urban centers, explained author, journalist and senior fellow Nomi Prins from the Demos organization.

She explained that NYC is worse because all of Wall Street is located there. While Wall Street continues to grow and make more money, the poor are losing it. Thanks to government bailouts and rescue packages financial and banking sectors are making record earnings, leading to record payouts to the rich.

50 percent of the Wall Street bankers today in a survey indicated they expect their bonuses to increase by at least a half this year, while other people are suffering, while those income gaps are widening,” said Prins.

When the income gap widens it widens worse for those already in need, she explained. While this is a nationwide problem, the gap is magnified in New York City because of the concentration of wealth in the banking community.

The poor were not aided or bolstered by the government and therefore had less to rise from in the recessive market.

You’re talking about less jobs, which means less family income which means families in general doing worse and falling into more of those poverty levels in larger numbers and in faster accelerating numbers than ever before. You have general costs of everything going up relative to those conditions. Healthcare costs have continues to rise, your insurances have continues to rise, your fundamental basic items have continues to rise,” said Prins.

Both middle and poorer classes are suffering in America. The upper classes are benefiting from most government aid while others have received very little.

There has been a disproportionate amount of help going to financial sectors and into the wealthy aspects; the tax breaks, the tax havens, everything that’s basically allowed the wealth to accumulate more quickly at the top levels where there’s less of that largess going to the middle and bottom part of the society,” Prins explained.

There is a philosophy in the US that believes stimulating the economy across the full spectrum does not help the whole country; however it has manifested into an expanding income gap.