The richest New Yorker, David Koch, is worth an estimated $12 billion. The poorest New Yorkers, 1.5 million people with incomes below the poverty line, are collectively worth nothing—or less. David Koch, in other words, is worth $12 billion more than a fifth of the city’s residents combined.
How does that make you feel?
Depending on your own financial situation, it might make you feel poor: David Koch is worth $11.99999 billion more than me! Or lucky: Thank goodness I’m worth more than zero. Or guilty: How can I complain about not having enough when others have nothing? Or angry: David Koch is a symbol of one of society’s greatest ills!
If you’re in the last camp, at least spread the resentment around: Of Forbes’s 400 richest Americans, 45 live in New York City, and they are each worth at least $1 billion. If our 45 billionaires suddenly decided to give half their collective $136 billion to the city’s poor, each of the 1.5 million would get a check for more than $45,000—a wonderful windfall, certainly, but not enough to eliminate the shocking wealth disparity.
That there is a startling gap between rich and poor is not news, and it’s also not confined to New York: The U.S. as a whole has seen widening wealth inequality in the past two decades. But the phenomenon is more pronounced here: Manhattan has the highest income disparity of any of the roughly 3,000 counties in the country. At the top of the income spectrum, people are trading in their Gulfstream IV’s for private Boeing jumbo jets. At the bottom, they’re struggling to get enough to eat.
I grew up on the Upper East Side and went to a Manhattan private school, so I got some early exposure to the city’s wealth disparity. I lived on 98th Street—just north of a figurative 96th Street Mason-Dixon Line that, 30 years ago, divided one of the richest neighborhoods in the country from one of the poorest. My family considered its peers to be the Upper East Side Joneses, not the Harlem Joneses, and had a habit of living beyond its means.
On the one hand, I was fabulously rich, wealthy beyond the dreams of people we drove past in Harlem on our way to the Third Avenue Bridge. I was also richer and luckier (and decidedly wimpier) than the kids who occasionally broke up our pickup baseball games in Central Park by chasing us down and stealing our bats and mitts—and this relative privilege meant that my fear and rage at such treatment was also mixed with acceptance and, bizarrely, guilt: We could afford mitts, and they couldn’t, so the violence was understandable.
On the other hand, one reason my family often drove out of the city via Third Avenue—a route unpopular with my mother, especially after someone yanked open a door at a stoplight and tried to climb into the car—was that my father didn’t want to waste money on the Triborough’s toll. Private-school tuitions and an Upper East Side mortgage ate most of his salary, so I also knew what it felt like to be, if not poor, tight. Not having to constantly worry about money seemed the biggest advantage that the “rich kids” in my class had. That their money made them “better” than us, at least in some people’s eyes, was also not lost on me.
The usual reaction to extreme wealth disparity is that it is a disgraceful problem that needs to be solved. Although this view resonates emotionally, it is worth asking whether it is, in fact, true. Despite serving as a stark reminder that some people have it better than others, is it really bad that David Koch alone is worth more than 1.5 million other New Yorkers put together? Or are Koch, Mayor Bloomberg, Donald Trump, Carl Icahn, Martha Stewart, and thousands of other fantastically wealthy New Yorkers just inspiring examples of the ongoing American Dream? (Work hard and you can be one of us.)
If you embody the American Dream—or aspire to—you will be relieved to hear that some economists believe that wealth disparity is not, in fact, a problem and that your riches are actually a net benefit to society. In this view, the rich getting richer is consistent with the Pareto principle, which holds that economic change is positive if it helps at least one person without hurting anyone. Rich people, this theory goes, don’t hurt poor people or society by getting richer; they merely help themselves. In some cases, they also help others. They save and invest mountains of capital, helping to create jobs, products, and services. They support “high culture” in a way that folks struggling to make rent simply can’t. They pay a higher percentage of their incomes in taxes. And they give millions to charity.