Economic Inequality: Issue by Issue

Economic inequality and the threat to America’s middle class are major themes in today’s political and policy landscape. Here, New Yorkers search for employment at a job fair. (Daniel Meson/NY City Lens)

Economic inequality and the threat to America’s middle class are major themes in today’s political and policy landscape. Here, New Yorkers search for employment at a job fair. (Daniel Meson/NY City Lens)

Economic inequality and the threat to America’s middle class are major themes in today’s political and policy landscape. All levels of government are debating myriad issues surrounding poverty, employment, and the economic forces that support a vibrant middle class. But sometimes, it can be hard to keep track. Here is a look at where things stand on several related issues in New York and around the country:

Minimum Wage

The federal minimum wage is $7.25 per hour. President Barack Obama and congressional Democrats are on a campaign to increase it to $10.10, claiming it would give a raise to millions of people and help get them into the middle class. Senate Republicans blocked a vote on a bill at the end of last month, arguing that raising the minimum wage would be detrimental to employers and lead to job cuts. Even if the Senate bill had passed, it would have likely died in the Republican-controlled House of Representatives.  The national debate is not yet over, but it is unlikely any legislation will be advanced until after this fall’s elections.

Because the federal minimum wage has not been raised since 2009, states are taking the initiative to increase wages on their own. In 2013, New York State’s legislature adopted a plan to raise it incrementally, ending up at $9 per hour at the end of 2015. The current minimum wage in the state is $8, and it will jump to $8.75 at the end of 2014.

Also in New York City, a workers group is fighting to reclaim unpaid and stolen wages.

Health Care

More than eight million people nationwide have signed up for insurance through the Affordable Care Act, aka Obamacare. The law guarantees health insurance for all Americans while attempting to decrease the overall cost of care. One major provision in the law is the expansion of Medicaid, the health insurance program for low-income people, which has led to more than three million people gaining coverage, though only in the 24 states that have signed on, including New York. Since the beginning of the year, New Yorkers with income at or below 133 percent of the federal poverty line are eligible. That means a single person with an income below $15,800, or a family of four earning less than $32,500, qualify for Medicaid.

Republicans intensely oppose many pieces of the law, in particular the provision that it requires everyone to buy insurance, and have voted for repeal dozens of times. But since Obama still has more than two years left of his term, major changes are unlikely until there is a Republican president in office, in 2017 at the earliest.

City Budget

New York City Mayor Bill de Blasio unveiled his nearly $74 billion budget proposal this week for the 2014-2015 fiscal year. Among the proposals are increases of $248 million in spending on schools, affordable housing, and health and welfare. De Blasio will negotiate a final budget deal with City Council by July 1. There has been little opposition from the Democratic-controlled council.

Public Sector Unions

Public sector unions are a hot-button issue in some places, like Wisconsin. Not New York. A big issue surrounding de Blasio’s mayoralty has been the status of the city’s contracts with its labor unions. All of the 152 contracts are expired, which has left many public employees without a wage increase for multiple years. De Blasio struck a deal for a new contract with schoolteachers earlier this month. The deal includes retroactive pay increases dating back to 2010, as the unions and former Mayor Michael Bloomberg had failed to agree to a new contract since then. Historically, the city’s unions have followed “pattern bargaining,” with one major deal influencing the rest, and according to The New York Times the teachers’ deal could be a model for contracts other public employee unions. The teachers’ contract includes pay increases but also reduces the city’s burden for health care. Teachers will vote on the contract from May 19 through May 30. According to the Daily News, the deal is not popular with the teachers because the back pay will be spread out over five years.

Affordable Housing

The more rent prices in the city continue to rise and wages fail to keep up, the more difficult it will be for working-class families to afford them. There are close to 250,000 families waiting for a spot in public housing, and another 122,000 waiting for Section 8 funding, which provides public money for rent support in private buildings. According to the city’s housing agency, the vacancy rate in public buildings is less than one percent and only three percent of units are turned over in a year.

De Blasio announced a large initiative to expand access to affordable housing through various methods, including pushing developers to include such units. He has pledged to create 200,000 new housing units for low- to middle-income families over the next 10 years. This year’s budget includes projections of $41 billion in spending for the program over the next decade.


One of de Blasio’s signature campaign pledges was universal pre-K. He secured $300 million from the state, which will fund 53,000 seats this fall. The budget estimates there will be 73,000 pre-K seats in the fall of 2015. Overall, New York City schools will receive $939 million more than last year, with a total budget of $20.6 billion.

There has been lots of debate surrounding charter schools. De Blasio has previously advocated that they should be forced to pay rent for classroom space in public school buildings, but his position has softened because charter school parents want to keep the schools open. They will continue to get city support and classroom space, and more protections for charters were included in the state budget, which was enacted on April 1.

The City University of New York will receive $49.2 million more in state funding from last year. Also, de Blasio’s budget includes $20 million in spending for science and technology programs.