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Comment by gen220 | Hacker News Reader

The issue with these assessments of living wage in NY is that, if you're poor and desperate, there are many ways to "live" that, while not particularly desirable to most people, are certainly available. This is true both on the "cost" side (i.e. expenses related to food and housing) and on the "income" side (reported wages).

There is a large, technically illegal, economy to NYC which doesn't appear in W-2s, 1099s or self-reported census income, that most people outside of it generally aren't aware of. I'm not saying that the situation is good, but "60% of New Yorkers are not earning a living wage" is inaccurate. The existence of this grey economy makes it very difficult to measure income and expenses for a large proportion of New Yorkers.

[edit]: As an example, I have a friend who grew up in a working class family in south Brooklyn. His mother's job was "on the books" and his father's construction work was completely off-the-books, paid in cash. Everybody in the family was very aware of the amount of money you could deposit in a bank account, in a given time period, without attracting IRS attention.

Recently, they bought a building in Brooklyn for a low million dollar figure, after pooling together informal loans from family members and friends. But their household was probably below the "living" wage, from the point of view of this data set, for the past 25 years.

View on HN

From my experiences living in NYC, this seems directionally correct and very difficult to measure.

Tack on that cost of living in NYC varies wildly depending on rent-stabilized and rent-controlled apartment arrangements (rent control is more strict than rent stabilization, rent stabilization is more common than rent control). There are millions of New Yorkers living in rent-stabilized apartments, and they might earn enough to live in their current pad but not be able to move somewhere else at market rate.

Similarly, property values have skyrocketed, so people living in homes they bought decades ago might be comfortable, while earning a wage that is technically not "living" by the standards of thhis academic research.

Excellent summary. I have a lot of friends who grew up in rent controlled (in the 1940s law sense) units, and they'd probably be considered "below the living wage" according to these sorts of metrics.

Combine that with the massive informal economy, and it becomes very difficult to perform accurate econometrics on the city as a whole.

If those people living in rent controlled units move, can they find a place with the same rent? Or would they need to move to a different state, away from their friends, family, community and job?

Probably the latter. There are many senses in which it's not ideal; at the same time, I think most people in NYC would happily take a rent controlled unit (if they're not already living in one).

Yep. And what rent-controlled units exist, have huge waiting lists. If you don't like the place, or if your landlord is negligent or an abusive jerk, then too bad, them's the breaks. You're "happy" to take such a place because the alternative is worse. That doesn't mean it's good.

> And what rent-controlled units exist, have huge waiting lists.

It's worse than you're describing.

Rent-controlled apartments have no waiting lists, because rent control is all but phased out. It only exists for a very small number of apartments that have been occupied continuously since the 1971 by the same person or lawful successors (e.g., spouse).

Rent-stabilized apartments are very hard to come by. Not only are they incredibly competitive, but they often require massive broker fees (NYC is one of the few markets where renters are expected to pay the fee for the broker hired by the landlord). So even if you're lucky enough to score a $1000/month rent-stabilized apartment, you may have to pay a broker's fee of $5000 or more[0], on top of the first and last month rent.

[0] this is not an exaggeration; the market has exploded in the last year, and broker's fees are unbelievable compared to even a few years ago

Rent-controlled apartments are indeed basically extinct, but IME rent stabilization has more variance than you're describing: my first independent apartment was rent stabilized, and I didn't have to pay any broker fees. This was in South Harlem.

> IME rent stabilization has more variance than you're describing: my first independent apartment was rent stabilized, and I didn't have to pay any broker fees. This was in South Harlem.

When was this? I'm talking about the state of rent stabilization today - 2023 - not 2021 or earlier.

These days, you might happen to luck into a rent-stabilized apartment, but if you're actively looking for one, you'll be very hard-pressed to actually successfully rent one without paying through the nose.

That was 2018.

I just checked, and the same unit has been off-market since 2020 at...$5 less than I was paying for it. Similar units in the building are going for the same rates that they were in 2018.

> Similar units in the building are going for the same rates that they were in 2018.

That doesn't contradict what I'm saying. Rent stabilization limits the amount by which landlords can raise rents (2019 also closed a loophole around preferential rents and vacancies). But that doesn't reflect the actual total cost paid by people who are signing leases for rent-stabilized apartments today.

> off-market since 2020

Yes, warehousing is another widely-reported problem in the last two years.

Just to clarify: by "off-market" I meant that it's being occupied, not that they're warehousing it.

But yeah, I'm a few years out of date. My two apartments after that weren't stabilized at all.

All new buildings that took advantage of 421a tax breaks are required to be rent stabilized, so they aren't that rare, just close to market rate right now

The null hypothesis here is that your rent controlled (or stabilized) landlord is worse than your average New York landlord, which is debatable!

There's all kinds of context being missed here: rent controlled units tend to be in pre-war buildings in very nice neighborhoods, because that's where the housing was built in that era. They're also frequently in co-op or condominium-owned buildings, where the owners took the building private but still have to respect the pre-private holdout leases. They also tend to be larger than their non-controlled price-point equivalent, because they weren't chopped up during housing boom cycles.

Is it an unequivocal dream? No, for the reasons you said. But for every single family I know, it's a fantastic deal and an opportunity to live and access things that would otherwise be far outside of their means.

> The null hypothesis here is that your rent controlled (or stabilized) landlord is worse than your average New York landlord, which is debatable!

It's not. The problem is that if you have a market-rate apartment and your landlord is an asshole, you can move.

> the city as a whole

this is even worse, it's not for the city but the whole state. How can you perform a study that dumps, say, Manhattan and Rochester into the same dataset is unclear to me.

Have you viewed the map? https://blogs.cornell.edu/livingwage/

Almost all of the red sections are outside of NYC. They don't have access to this NYC underground economy. Though The Bronx and Queens are some of the worst-affected areas, Erie and Rochester come up right behind.

The racial and ethnic slant is also hard to miss. If the NYC underground economy is indeed the only thing keeping minorities afloat, that means the economy is dependent on exploiting minority communities (keeping them working in illegal ventures, preventing upward mobility).

If you select the Finger Lakes region (5 hours away from NYC), and then select Race-Ethnicity, it couldn't be starker. Workers of Color lights up most of the map in red, with a median income of $16.80-$25.00. Select White Worker, and it's very light red and mostly green, centered around the city, with $21.48-$32.49. White people do well and everybody else struggles.

>The racial and ethnic slant is also hard to miss. If the NYC underground economy is indeed the only thing keeping minorities afloat, that means the economy is dependent on exploiting minority communities (keeping them working in illegal ventures, preventing upward mobility).

Or, alternatively, that the tax structure of the area is so abusive that the economy depends on tax evasion.

> If the NYC underground economy is indeed the only thing keeping minorities afloat, that means the economy is dependent on exploiting minority communities (keeping them working in illegal ventures, preventing upward mobility).

The flip side of the coin is that there's a reason people work in illegal ventures: making them fully legal would make them uneconomic, because of a combination of taxes and regulations, and also hurt upward mobility. You see that in places like France, where the youth unemployment rate tends to fall in the 20-25% range. (Though that too gives an overly negative representation of the state of things: France also has a significant shadow economy, so things aren't actually as bad as they might look there.)

It's a game of tradeoffs. What's probably ideal is to move as much as possible into the formal economy, regulate only those things which you can actually afford to regulate and enforce, and tax to the extent you don't drive things underground or out of jurisdiction.

I'm not sure the argument that regulations are the cause of decreased social mobility is valid. Germany who have regulatory framework much closer to France than to the US, has lower youth unemployment than the US. The US in general has quite low social mobility compared to many more regulated economies (e.g. the Scandinavian countries typically rank amongst the highest on social mobility despite strong regulations).

Rankings (particularly by ideological organizations) need to be taken with a large grain of salt, but Heritage has a ranking of regulatory/economic freedom of different countries:

https://www.heritage.org/index/ranking

In it, Denmark > Sweden > Norway > Germany > USA >>> France. The low ranking of the US in particular might be for partisan reasons (i.e. intentionally overstating regulatory burden), but Scandinavian countries, although having large governments, typically have relatively low and transparent levels of regulation and efficient tax systems.

Social mobility is a term of art that doesn't mean what people intuit it does.

I think the question being asked here is "how easy is it to significantly increase your income", which has an inverse correlation with social mobility. The reason for this is that high social mobility is most commonly an artifact of wage compression. Scandinavia has high wage compression, and the US very low wage compression, hence why it is much easier to significantly increase your income in the US than Scandinavia despite lower social mobility.

Yep, if we zoom into the NYC area and filter by "Employer does not provide health insurance", this gives you a better picture. In addition, many of the people would not state that they're employed, FWIW.

I agree that the "greater" economy is dependent on the grey economy, which is often exploitative-without-recourse. It's a big issue. I guess I'm trying to say that it's important to analyze the greater economy as-is, not just the easily-measurable economy.

You nailed it, only it applies to most of the country and not just New York. The shoddy enforcement and looking the other way is the cost of doing business. Enforce too much and it collapses.

While I generally agree, I wouldn't put that much emphasis on the racial divide ( that it's real ), in NYC it's much more a question of green than black vs white.

SOME "White people" do very well, there's an huge population of "white people" in the Bronx and Queens, the few who "make it" go to other boroughs/neighborhoods the others stay or go back to where they came from, which means the Midwest for a large portion of them.

Also, public workers in general have done quite well for themselves and that includes a lot of black people and some latinos. So while I somewhat agree with you, this very race focused take distorts the reality quite a bit.

> this very race focused take distorts the reality quite a bit.

I think you might be - whether intentionally or not - avoiding considering the factual evidence here. The whole point of this map is to be physical evidence to show that there is, based on actual evidence, which you can see on a map, a strong racial bias.

Do some white people also suffer? Yes. Do more people of color suffer than white people? Yes. Here's more proof, to go along with all the other studies done over decades.

Any business that can't afford to pay their workers a living wage and needs to exploit minority communities to stay open should be shuttered. No point letting them keep their failed business at the expense of everyone else. Companies who have been exploiting workers and pocketing the extra profits should either stop exploiting people and just pocket a little less profit or go out of business already and get out of the way so someone more competent can fill public's need for the good/service they offered.

This is how I feel about the whole argument against minimum wage increases. Can't figure out a way to pay your employees a living wage and stay in business? Close your business and good riddance, I don't care if you employ 10 people or 10,000.

I find it hard to believe that the amount of tax fraud in NY is enough to throw this figure off. Even if what you're describing is true, it would hardly be "the actual problem" here.

Snippet from my reply to a similar sibling comment:

Sorry, I'm not meaning to say that people aren't getting paid enough. My phrasing choice of "actual problem" was poor. I'll leave it up so this thread makes sense.

My intended point was: if we want to understand whether peoples' lives are sustainable with their present wages in NYC, we should be measuring their actual wages, which is inclusive of this grey economy, unlike the reported data source.

The amount of "tax fraud" required to impact the figure is less than one might imagine, because the "living wage" standard is quite low.

That's fair, but your post might have been more prescriptive than you intended. Your wording insinuates that New York doesn't actually have a problem with incomes relative to cost of living because most people make up for that through an informal economy. There is ambiguity, granted, but on the surface that looks like a massive stretch. The figure might be impacted, but for it to be completely eclipsed is another order of magnitude entirely.

You're right! I went ahead and edited it to hem closer to my original intent.

I totally agree that NY has a significant (income:cost of living) problem.

My main objective was to draw attention to the difficulties in measuring the size and distribution of this problem, caused by the unmeasured informal economy and unbalanced access thereto.

I definitely don't think that the informal economy makes up for low reported wages, but it definitely is a ballast that we'd be better off understanding, given its scope and entrenchment.

I (obviously) lack the data to back up GP's assertion, but anecdotally I've seen very similar things happen in South Brooklyn: the husband working a low-paying blue collar job on the books, while the wife worked at a nail salon off the books; or the husband taking in an NYPD pension while working security off the books, getting paid in cash. In both instances, the families rented out the other units in their buildings, also accepting rent payments in cash (and not reporting them).

I was a first date with a woman from a dating site who unleashed her opinions on how unfair it is that the rich evade taxes, and then later dropped that she was in such an arrangement where she rented a spot at a hair salon and was paid entirely in cash and reported almost none of it, while drawing social services for her and her kid.

(Bay Area rather than NYC though.)

I don't feel middle class folks evading taxes to more or less survive is a comparable offense to the rich doing so just because they can

You should. The thing that makes European social democracies work is that everyone is in it together and buys into the system. When you chip away at that universality—when you say that some people should be able to put their personal self interest ahead of the system—the social trust collapses.

Our au pair from Germany paid the same total tax rate on her entry level, non-university required office job back home as we paid on a mid six figure income in Maryland. That’s what makes their system work.

> The thing that makes European social democracies work is that everyone is in it together and buys into the system

That's far from true. If we talk about percentage of income, the lower and middle classes subsidise everyone else. There are many legal ways to avoid (not evade, which is illegal) taxes if you have enough upfront capital and that is practiced by every big company and upper-class household regardless of location. There are also lots of ways through corruption, lobbying and under-the-table payments or other favours to unjustly enrich oneself at the expense of the taxpayer if you have the right connections.

European countries still "work" but that's more due to inertia and the system is starting to break down; the pandemic accelerated it and we're starting to see the first systemic failures such as the UK (well not technically Europe anymore, but the stage has been set long ago when they were still in the EU).

Short of a few outliers such as some Nordic countries that appear to have figured it out (at least for now), everyone else is in the same boat. Europe just enjoys more inertia but it's just a matter of time.

> true. If we talk about percentage of income, the lower and middle classes subsidise everyone else.

No. The top 1% pays a greater share of total taxes (state, local, and federal) than it’s share of total income: https://itep.org/who-pays-taxes-in-america-in-2019/

> Short of a few outliers such as some Nordic countries that appear to have figured it out (at least for now), everyone else is in the same boat.

Ironically, the Nordic countries shift more of the overall tax burden to the middle class than the US: https://taxfoundation.org/publications/how-scandinavian-coun...

In Norway, Sweden, and Denmark, the top tax rates kick in at just 1.3-1.6x the median income. They all rely heavily on VAT, which is regressive. All have low corporate tax rates, and apart from Denmark, they also have competitive capital gains tax rates.

I'm a native NYer, and the GP's comment is largely correct: tax fraud and "informal" (meaning under-the-table) pay is more or less the norm for broad swathes of the city's service and contracting industries.

Every job I ever had in high school was paid under the table, and this is true for my family members as well. It's also normal to not pay sales tax in the city at smaller cafes and every bodega; this is normally passed off as a "cash discount," but it's conspicuously 8.875% rather than the normal credit processing fee.

All that being said: this doesn't necessarily contradict the claim that large numbers of New Yorkers aren't making a living wage. Under-the-table agreements enable wage suppression/theft and make it more difficult for the city to use its labor laws to protect workers.

> It's also normal to not pay sales tax in the city at smaller cafes and every bodega; this is normally passed off as a "cash discount," but it's conspicuously 8.875% rather than the normal credit processing fee.

For what it's worth, I live in NYC and have never experienced this. Lots of smaller places give cash discounts, but in my experience it's in the range of 3–4%, which sounds like a CC fee.

Which part do you live in? This was the norm in the neighborhood I grew up in (north of UWS), as well as everywhere I've lived (Harlem, north Brooklyn).

I wouldn't expect it to be the norm in areas where the foot traffic might pay credit cards by default; I think it's mostly in areas where cash business comes first anyways.

Edit: I wish people wouldn't downvote you. It's a massive city, and it's entirely possible to never experience this!

I live in Manhattan. My apartment is in Harlem, but I don't spend much time there, I'm usually further downtown.

That tracks with my experience: I've never received a tax discount for paying in cash downtown. I think some of that has to do with who owns the real estate: ownership tends to be corporate and structured downtown, so businesses' finances tend to be correspondingly more accountable and "by the books."

I have definitely received larger than 3-4% discounts (5% is pretty common, I've even seen 10%). At the time I had a pretty long discussion about reasons with my friends, but there's a lot of illegal and legal reasons to prefer cash: (a) you can pay employees quicker since credit cards don't disburse funds immediately, (b) you can pay employees "under the table" i.e. ignoring income taxes, (c) you can pay off your suppliers faster (as above), which is really useful for businesses with poorly documented credit (i.e. receiving net 30 or no credit). Depending on the use of the cash, I could see it being economically valuable to offer even a 15% discount (for illegal use) or 5% (for legal, CC processing + credit reasons).

To be clear, I've definitely seen higher than 4%, just not frequently. What I have personally never seen is a discount of exactly 8.875%, I would have noticed that!

Do you have a local coffee place that'll sell you a coffee for 2.75 instead of 3.00 if you pay cash? That's the kind of thing I'm thinking of (and that's normal in the neighborhood I currently live in.)

Same here, UWS

I've lived in NYC in the past and informally had discounts of 5-15% for services by paying cash, nothing declared, no receipts. Years long relationships with a mechanic or handyman can net some pretty deep discounts if they know you won't be a problem about billing disputes.

Yes, this is my experience as well. I've been doing business with some of the same people my entire life, and "cash only, no receipts, discount between friends" is the norm.

That and there are a TON of small (and not so small) businesses in NYC that are cash only or will not accept cards for transactions under $5 or $10 (and have a majority of transactions that are under that threshold).

I remember being absolutely shocked when I went to a super duper hole in the wall place in Dallas that I was _sure_ was cash-only and discovered that they not only accepted cards, but their POS supported NFC!

An 8% sales tax on food at bodegas is arguably a regressive consumption tax anyway, so I think it's fine consider this legitimate and ethical civil disobedience in response to inhumane living conditions.

Bodega cats exist to keep the rats from eating the 8% xD

In high school I got paid minimum wage on the books, and the rest as cash. I've always wondered how many "minimum wage" workers have this arrangement.

It's also wordplay to cover for the fact that many live beyond their means. Earn more, spend more.

Lifestyle inflation is more common than we like to admit.

When I made $30k per year I lived paycheck to paycheck.

When I made $50k per year I moved into a larger apartment and lived paycheck to paycheck.

When I made $80k per year I bought a new car and starting ordering food with UberEats, and well, you get the point.

my partner managed to save up over a period of a year until their car died, and had to spend all their savings buying a used one (the most they could afford) which will probably not last long. they also spend a majority of their income paying off debt, mostly the monthly minimum on credit cards they ill-advisedly used to pay rent when they lost their job. being poor is expensive.

> mostly the monthly minimum on credit cards they ill-advisedly used to pay rent when they lost their job.

What is advised in that situation? Homelessness? A lot of people found themselves dealing with that during the pandemic and they ate up all their savings and/or ran up debt just to keep a roof over their heads and food on their tables. If I had found myself in that situation I'd probably have broken the lease and moved in with friends/family but not everyone has others who they can depend on to take care of them like that.

When you almost tripled your income, you surely started saving more though, right? It's not really living paycheck to paycheck if you're putting away savings.

The multimillionaire in the mansion down the street lives paycheck to paycheck too - he's got a lot of homes and properties to maintain - but if he loses his job he has millions in assets to cushion him. It's not the same thing as someone making $30k living paycheck to paycheck.

> When you almost tripled your income, you surely started saving more though, right?

You'd be surprised how many people don't in this situation. I've known people that earned $200k+ for years with essentially no assets because they spent it all.

“Living wage” isn’t a self reported statistic based on whether people think they can afford a nice house and UberEats.

I couldn’t easily find the exact formula for this study but it’s usually based on necessities. For example I checked a popular living wage calculator from MIT for the county I grew up in. Food was listed at $9 a day.

Well, 100% of people living in NY are living, so maybe "living wage" is not so accurate a measurement if 60% aren't "living".

By that logic every homeless person is earning a living wage.

Living wage doesn't mean you'll die if you don't make that, it means you can't afford to support yourself and will require additional resources--often from government assistance.

So the same people pushing "living wage" are also calculating "excessive cost of government" like zoning restrictions and property taxes? No, it's just deliberately misnamed propaganda tool.

The term living wage has been around for well over a hundred years. What term would like them to use? Minimum wage already has a specific meaning.

We already have well established term for the concept that everyone understands. Do you want people to change their vocabulary because a word offends you?

> The term living wage has been around for well over a hundred years.

Pretty sure that "living wage" means something very different today than 100 years ago, the term isn't the same if the definition changes.

"Decent wage" is a much better word since it shows how arbitrary it is. The headline should be "Fewer than 40% of New Yorkers earn a decent wage". That word makes sense, since they choose "living wage" to be the amount you require for a decent living, "decent wage" seems much more appropriate for the wage you need for a decent living.

Living wage is the amount of money required to meet all your needs without government assistance.

“Needs” is the part that has changed. $2k a year in healthcare wasn’t likely included 100 years ago, but most people would consider that a need now.

When I checked the MIT living wage calculator, it listed $600 a month in rent. That’s just barley enough for 1 bedroom apartment with a roommate with 1 person sleeping in the living room.

100 years ago you could likely find some large dormitory style living in a death trap building with inadequate exits. But today short of illegally filling a single family unit with too many people a, single bedroom apartment with a roommate is pretty close to minimum shelter.

“Decent wage” to me implies more than the minimum possible shelter and $9 a day for food. But the point is living wage is an already established term of art that means basically the same thing it always has.

"living wage" is a legal term used in policy deliberation

Yes, and it seems to either be calculated wrong or is deliberately misnamed to make an emotional impact (propaganda).

Additionally, it would appear that the Cornell data set, coming from the Census Bureau, suffers from the typical problem in most of these data sets -- it is income only, not income net of taxes and transfers. About 1/2 of the US population pays no direct income tax, and of that 1/2 many receive a large share of transfer from government in the forms of Medicaid, food stamps, EITC, etc. After taking into account all of those non-taxes and transfers, this group is much better off than a lot of the publicly available data sets would indicate. This is mostly due to the difficulty of getting all of that information together on each individual in the data set, whereas looking at a reported W2 value is comparatively easy.

If the problem is not that you can't live, but that you can't live officially, I would say that is still a problem.

A good 5-10% of the population are illegal immigrants so that isn't a good start.

Yeah, it's still a problem, but the problem is with the powers that be that set the rules for what it means to live officially. The wages are less of a problem here than the theft by government of the fruits of ones labor.

The wages payable are still at the mercy of what the market will bear. If these people could not find a way to live officially, in many cases it's highly unlikely that the wage could rise to cover their cost of living and the taxes to be paid, meaning the job would no longer exist.

At the end of the day, you can't tax a society into prosperity. Every tax dollar spent needs to be justified on an ROI for society.

It's many problems. It's not a simple situation because it's one that has evolved over many generations. Is it working people defrauding the government? Is it the government abrogating it's responsibility to manage the economy and tax people fairly and provide effective services to the community? Is it a haven for criminality of a more sinister and even violent kind that inhabits the grey economy and turns it black? All of the above, but it's hard to reform because the people who live this way and suffer many of the disadvantages that result from it are also deeply complicit in it's operation.

If only someone studied this...

https://budgetmodel.wharton.upenn.edu/issues/2021/4/30/map-i...

New York is about 11k undeclared on average per taxpayer.

Now living wage rates: https://livingwage.mit.edu/counties/36061

Living wage for an adult with 0 children is $25.42 per hour and minimum wage is $15. So let's say that difference is $10.

$11k is 1100 hours which is 137.5 eight hour days just do bring you up to a living wage.

Note that this excludes any dependents. Factor in a non-working spouse or kids and the discrepancy is worse.

> The issue with these assessments of living wage in NY is that , if you're poor and desperate, there are many ways to "live" that, while not particularly desirable to most people, are certainly available.

I came here to say this is merely evidence that a lot of people are willing to put up with a lot of BS to live in NYC. If it wasn't "worth it" to them - for whatever reasons that may be - they'd be living elsewhere.

I hear this a lot. I'm inclined to share the sentiment for the young student going to NYU, the intern at a museum/art gallery, or the actor waiting tables while auditioning and doing off broadway. They made a choice, and clearly think the city can offer them enough to deal with poverty and desperation.

I'm less inclined to share the sentiment about people that were born and raised in NYC and have their entire social network there. They had less choice in the matter, and they might be even more desperate if they lost connection with their social support group. In addition, many people born and raised in NYC are missing skills that would be considered essential almost anywhere else in the US, such as how to drive a car.

Regardless of how/why someone arrived in NYC, the prosperity of it's population is a direct concern of cities. The income of it's tax payers directly correlates to a city's tax base, and we've seen what happens when a city's tax income falls short of projections. Poverty and desperation also seem to go hand in hand with expensive problems (for the city) such as crime and poor public health.

> I'm inclined to share the sentiment for the young student going to NYU, the intern at a museum/art gallery, or the actor waiting tables while auditioning and doing off broadway. They made a choice, and clearly think the city can offer them enough to deal with poverty and desperation.

Perhaps I missed these personas in the original article, but these are very charitable examples of "poverty and desperation". Most people interning at museums and art galleries (in my experience) come from families who can at least afford to subsidize the cost of living in NYC. Waiting tables while auditioning and doing off broadway is actually a pretty decent way to earn a living - I had/have friends who have been doing that for 15-20 years and earn solid incomes, in some cases enough to raise a family. I went to nyu, and while it was a while ago, I'm told that if anything, NYU students are more privileged than they were when I went there.

The real examples of poverty and desperation are the immigrants who are effectively forced to work in sweatshop conditions, or the women who pick up hours here and there in childcare in their neighborhood, or the security guards who live out of their cars or in homeless shelters because they don't get paid enough to end up in a stable living environment.

In some cases, they don't have a network outside of NYC they could lean on, or don't have the resources to get to another city, or are (justifiably) scared of what would happen when they got there.

Ah yes, the classic "if you can't afford it then move out" meme. Who will collect garbage? Who will serve tables? Who will do all the jobs that most people would hate to do and we pay them peanuts for it?

When money is so tight who has time to take off to go interview at jobs 2hrs away and afford the money to commute to the interview? Who has the time go look at apartments 2 hrs at when you're working 2-3 jobs?

Why is it so difficult to recognize there's a systemic problem?

Clearly, business owners still have access to low income labor, otherwise there would be no one serving the tables or collecting the garbage. If employers can't find staffing, they can raise wages to make their job offers more attractive.

I don't think the problems you stated exist.

Pedantic - but contrary to popular belief, sanitation workers are not paid minimum wage - they start at $40k and get paid >$83k after 5 1/2 years: https://www1.nyc.gov/assets/dsny/site/resources/press-releas...

This, with a pretty good pension.

Comparing sanitation workers to low paid service workers (WITHOUT a pension) is like comparing apples to oranges.

Valid point. I only mentioned the sanitation workers b/c the original author did.

> If it wasn't "worth it" to them - for whatever reasons that may be - they'd be living elsewhere.

Moving can be extremely costly and people who don't earn a "living wage" probably aren't traveling to see if the grass is greener somewhere else.

I've been watching Louis Rossmann's saga for a few years and it has been interesting to see what it took to get him to finally leave NYC. And I'm sure he had far more means to leave than most.

Moving is only costly if you have a lot of possessions.

...or a job ...or a business ...or a family ...or a disability ...or an ongoing education ...or economically valuable connections ...or long term contracts etc. For many people, there's much more to moving than just physically relocating people and possessions.

Yeah but those “reasons” aren’t necessarily appealing ones. My uncle and cousins moved to Queens a few years ago when they immigrated to America. It’s not because they love the nightlife and going to MoMA. It’s because that’s where the Bangladeshi community is—the folks who can help find a low paying service job with limited English skills or knowledge of America.

New York City’s population is actually declining if you exclude international migration—I.e. if you focus on the people who have realistic choices about where to live.

This raises the point that I don't think gets enough attention: taxes for many are a barrier towards life goals. For some like the folks you mentioned, it's a barrier to putting a roof over your head or buying your first home. For others, they can afford housing, but taxes are the difference between being able to save for retirement or not.

That's not to say that there aren't things of value we get for our taxes, but there are a LOT of ways that our taxes are squandered, especially at the federal level, which sadly is the largest chunk of taxes. We all pay the most in federal taxes and get the least in return for federal taxes. State taxes are the second most paid and we get see benefits from them than federal but less than local. Local taxes are often the least amount but the most likely to be spent on things that actually benefit you personally.

We could help everyone make better progress towards life milestones like owning housing and saving for retirement if we collectively held government accountable for how it spends our taxes and reduced taxes across the board.

Eh, a huge percentage of the population pays no federal income tax at all. They pay payroll taxes, but they also get a specific benefit from those taxes, it doesn’t disappear into some black hole of defense spending or whatever.

Edit: https://www.cnbc.com/amp/2022/03/25/57percent-of-us-househol...

If the law is bad, you have to change the law.

If you instead choose to selectively enforce the law, political power is transferred from the legislative to the individuals who selectively enforce the law.

That's how you get Russia.

In general, "not having enough money" is a barrier towards life goals, whether that's from the taxman, rent, commuting costs, fuel, wage suppression, wage theft, or whatever.

> taxes are the difference between being able to save for retirement or not

In countries with state pensions, some of the taxes are saving for retirement.

There's a lot to be said for the idea of reducing the friction of income taxes and shifting instead to property or land value taxes, though. It's a lot harder to conceal a building or move it offshore.

> In countries with state pensions, some of the taxes are saving for retirement.

It's only saving for the retirement of government workers at the expense of the private sector. That's pretty clearly theft. There should be absolutely no government programs give benefits to only government workers paid for by non-government workers. You're basically robbing Peter to pay Paul.

What? I'm talking about the UK state pension: https://www.gov.uk/state-pension/eligibility ; pay in for 30 years, get about £180 a week when you retire. For all workers.

But people who work for the government are, separately, entitled to have an employer-run pension scheme which pays some of their income as deferred compensation in a pension scheme. I don't think it would be more efficient to insist that they take out a private retirement scheme (is this "401k" in US-speak?) and then have to pay them more in the present in order to fund it.

The fun part of your example is that the top line numbers they talk about are for NYS, not for NYC.

In fact they call out NYC for having

  Manhattan boasts the state’s highest percentage of residents – more than 80% – earning a living wage.

Which seems to not line up with your assessment

Manhattan is only one of five boroughs of NYC, and it's the wealthiest of the five.

Manhattan is 1/5th of NYC by municipality, and about 1/6th of the city by population. It's historically the wealthiest borough, so it's not particularly surprising that its residents would have a higher-than-average living wage attainment percentage.

Manhattan is not NYC. Most poor people live in the other 4 boroughs. Most wealthy people live in Manhattan (and Brooklyn).

New York City is composed of five boroughs: The Bronx, Brooklyn, Manhattan, Queens, and Staten Island. Each borough is coextensive with a respective county of New York State.

I think what he means is that Manhattan alone does not comprise the entire city.

That may be a problem with the assessment but I don't see how that allows you to redefine what "the actual problem" is. To me it still very clearly seems to be that people don't get paid enough? Even the grey economy you mention is caused by that actual problem, is not a replacement of it.

Sorry, I'm not meaning to say that people aren't getting paid enough. My phrasing choice was poor.

I mean to say, it's very difficult to inform policy from data with big inaccuracies.

I'd say the grey economy is caused by myriad issues. But it's a space where people are able to meet their needs (on the employer and employee sides). Even though most of us on this forum wouldn't accept those conditions, hundreds of thousands of people do. It's a nuanced issue that requires a lot of thought and research, before jumping to conclusions about whether it's bad or not.

Anyways, IMO, if we want to understand whether peoples' lives are sustainable with their present wages in NYC, we have to measure their actual wages, which is inclusive of this grey economy, unlike the reported data source.

Not really. I mean if you want to have a stupendously high bar of confidence, and continually raise it so that no action is ever necessary or possible, then yes you need to spend many more years to understand every nuanced economic detail.

For me idk, I've lived a lot of my life in poverty and on the edge of it, and large swathes of my social and family communities still do. I don't need more proof. It's very obvious that most workers are not compensated adequately and this data confirms it unless you really really don't want it to.

I agree that we don't need the full picture to take meaningful action.

I thought it was important to bring attention to the grey economy aspect, because so much of NYC would literally not function at all without it, and its existence and scale does have a meaningful impact on how you interpret this report (i.e. that the report is directionally correct, but its unbelievable magnitude is evidence that we can't reduce something as complex as poverty to a single number, especially when that number is essentially employee and employer-reported income).

This economy exists, but I think it's still arguable whether the people you're talking about are "earning" a living wage.

Setting aside the measurement problem, consider 2 households:

- household A takes in (1+C)X dollars of W2 income, keeps X after taxes, and steals Y = CX/(1-C) to get to the "living wage" level of income.

- household B makes X + Y in off-the-books cash, and thus doesn't pay C(X+Y) in taxes.

Both have the same take-home pay. Household A steals the same amount household B saves from tax fraud/evasion. We wouldn't say that household A "earned" their living wage, even if we could measure it. If Y of their income is ill-gotten, it isn't "earned". Neither should we say that the household B is "earning" their take-home pay amount. Meanwhile, they're benefiting from a government which is subsidized by their more law-abiding neighbors. Said otherwise, for the same level of state + city per-capita spending, their neighbors could have a lower tax rate if the illegal economy were smaller.

We casually like to think that not paying taxes is victimless, but this is an illusion; the victims are literally everyone who is paying taxes.

> they're benefiting from a government

Are they? Is the government actually benefiting the people we are talking about, on net? I strongly suspect that the answer to that question is "no". And if that is the case, the people who aren't paying taxes could justly respond that the people who are paying taxes are enablers, keeping a government in existence that does not provide the benefits the taxes are supposed to be paying for.

If you disapprove of the way funds are being spent, the appropriate response is to campaign and vote for what you think are more reasonable policies.

Saying that tax-payers are the criminals by propping up a system with abuses is just as nonsensical as saying that non-thieves are criminals for propping up a system of property rights which creates abuses.

NYC has persistently been an economic hub and a place where people sacrifice a lot to live and work. NY as a state and NYC both have quite significant public spending. I think on a per-capita basis, the NYC municipal budget alone is is in the range of ~$11k/head and the state budget is another $10k/head. Do you think those facts are unrelated? If you look at NYC's evolution over history, it has repeatedly needed active government programs to make a dense city function, and to actively support trade, commerce and finance. In the absence of coordination and expenditure, I think Manhattan's growth would have been capped by sanitation issues or the limited water supply centuries ago. There are plenty of places (most) in the country with lower per-capita public expenditure, but none of them have succeeded in creating NYC's economic success. Do you think that's an accident?

> the appropriate response is to campaign and vote for what you think are more reasonable policies.

What if this persistently fails to work?

> it has repeatedly needed active government programs to make a dense city function, and to actively support trade, commerce and finance

It is possible that active government programs are the only way to make a dense city function. But that's not the same as saying dense cities are the best way for people to live.

> none of them have succeeded in creating NYC's economic success

I'm not sure that's true. For example, according to Wikipedia [1], in 2009, the NYC metro area was ranked 10th in per capita GDP. Some of the higher ranked areas are familiar, such as the Bay area and the Boston metro area; but also ranked higher than NYC were Midland, Texas (ranked #1), Des Moines, and Elkhart, Indiana. So I don't think it's a slam dunk that the best way to create economic success is to have a hugely dense city with active government programs.

[1] https://en.wikipedia.org/wiki/List_of_U.S._metropolitan_area...

> none of them have succeeded in creating NYC's economic success

Economic success for whom? According to Wikipedia [1], in 2019, New York had the highest Gini coefficient of all 50 states (Puerto Rico was higher but it's a territory). The point under discussion is not whether NY state and NYC's public spending benefits the successful people in NY state and NYC; I'm quite willing to take it as given that it does. The question is whether it benefits, on net, all the people, not just the successful people.

[1] https://en.wikipedia.org/wiki/List_of_U.S._states_and_territ...

Conversely, how can we blame the government for failing to provide the benefits taxes are supposed to fund when people are cheating on their taxes? The reality is that tax cheaters are stealing not from the government, but from other citizens: cheaters and honest folk alike benefit from social services, but the latter pay for them.

> cheaters and honest folk alike benefit from social services

You can't just help yourself to this claim since it is precisely this that I am disputing. If in fact nobody is actually benefiting from government services, then the problem isn't "cheaters" who don't pay their taxes, the problem is "enablers" who do--thereby giving money to a government that is failing to do what it's supposed to do.

> If in fact nobody is actually benefiting from government services,

And my point is this is patently false. Would you be okay if the NYP announced that it would not enforce or police crimes perpetrated against Chinatown businesses because of widespread tax fraud? If you truly believed if what you wrote, you would not care: the government isn't providing any service then this should be a non-issue, the government didn't provide any services so this announcement is a no-op.

Of course such a proclamation would be heinous, because contrary to your insistence that the government doesn't provide services they absolutely do provide critical services. The reality is that people just don't want to pay taxes and are using their frustration with what they perceive to be government inefficiency or corruption as justification for their tax fraud.

The fact that the NYP doesn't announce that it's not policing crimes that it should be policing, does not mean that it actually is policing crimes that it should be policing. Again, you can't just help yourself to the claim that the government actually does what it's supposed to do. Nor can you just assume that it must be because of how you expect that people would respond to some hypothetical announcement.

So you'd be totally fine if the NYP made an official announcement: "As of today any crimes perpetrated against Chinatown businesses will not result in law enforcement response." I'm talking in terms of real, concrete actions. You'd genuinely be okay with the government singling out this community and making it clear that it's fair game for criminals to target this community?

Why are you singling out Chinatown?

Just as an example. Like I said, you should be totally unfazed by the NYP saying "we won't enforce any crimes against Chinatown businesses" if you truly believe that New York isn't providing any social services.

"nobody is actually benefiting from government services"?

Do you suppose New Yorkers drink tap water? It tastes pretty good. I recently learned that still the longest tunnel in use is the Delaware Aqueduct, built in 1945, which brings water to NYC from a series of reservoirs. It runs 85 miles and terminates in Yonkers. Even decades later, and after China's spectacular building projects, it hasn't yet been surpassed. The reservoirs have to be actively monitored and administered to keep the water quality high. For 8.8M people even the most basic necessities of life depend on government services, and on creating and maintaining massive infrastructure.

You can argue that public spending is inefficient, dysfunctional, at times inhumane, but people live in NYCHA housing, go to schools including the CUNY system. They certainly ride transit, use the parks. NY recognizes a right to shelter, and while the system needs a lot of improvement, it does get a lot of people into supportive housing. To claim that _none_ of those people benefit seems like quite a stretch.

> the problem is "enablers" who do--thereby giving money to a government that is failing to do what it's supposed to do.

I'm confused about what you even think government _is_ supposed to do. But if you agree that government does have a role and responsibilities to fulfill, I definitely don't understand how you are actively blaming tax-payers. What do you think _not_ paying taxes will accomplish?

> I'm confused about what you even think government _is_ supposed to do.

Apparently so are all the people who aren't in the fewer than 40% of New Yorkers referred to in the article.

To this point, I dated a Russian girl from Brooklyn whose family had all their medical, dental, cosmetic, car repair, etc. work done by an extensive network of unlicensed Russian immigrants operating out of their apartments and garages. All cash obviously. I'd have never known it existed.

> There is a large, technically illegal, economy to NYC which doesn't appear in W-2s, 1099s or self-reported census income, that most people outside of it generally aren't aware of

Can you say some more on what this means? (I'm an outsider, and have no idea!)

Lots of economic activity in New York is not reported to the government

This exists in many places, it's not unique to New York City. In general what this means is one of three things:

1. Cash businesses that don't report income for taxation, so get to make effectively 40-50% more income from their revenue. In this case, I am using the term "business" to refer any income-generating activity for which you are not employed by another person. Yes, this counts the dude selling loosies.

2. A business which is itself illegal because of the nature of what you are selling. This could be as deep as narcotics, or as simple as trucking in cigarettes from out of state so you can sell them at a street news stand and pocket the difference in what would be otherwise taxes going to the state/city.

3. Being paid under the table, this includes things like illegal immigrants working on construction crews, as hotel maids, and back of house in restaurants, getting paid out at the end of the night on a daily basis ("day labor") in cash, never reporting any income for tax purposes.

Generally speaking, when someone says "illegal economy" in a place like New York City, what they mean is the sort of petty tax evasion that naturally occurs amongst immigrant communities and the poor who would otherwise not be able to afford to reside/live there if they paid their taxes in full. New York City is effectively the highest taxation regime you can live in within the US. Major metros in California come close, but are not quite there. If you avoid every tax except sales tax, you can significantly improve your income potential at lower wages. It's the difference between taking home $17/hr or taking home $12/hr after tax, that extra $5/hr is nothing to be sneezed at, and amounts to an extra $10k/yr in your pocket if you work enough hours to be considered "full time" (which in the illegal economy usually means multiple "jobs" or hustles).

> 1. Cash businesses that don't report income for taxation, so get to make effectively 40-50% more income from their revenue. In this case, I am using the term "business" to refer any income-generating activity for which you are not employed by another person. Yes, this counts the dude selling loosies.

Common out here in flyover country, too. Anyone without a shop sign dominated by a large corporate logo is likely to tell you they'd prefer cash, and may offer a cash discount. Cleaners, mechanics, plumbers, even daycares (this is how poor folks can afford daycare: your cousin's friend is staying home with their kid and will watch yours, too, for 1/4 what a licensed daycare would charge, if you pay cash) all of that sort of thing, tons of people doing a fair amount of off-the-books work. You might have to chat with them a little first, but it's usually something they're interested in.

I wonder if there's anywhere in the US this isn't fairly common. I can see how someone might not be aware of it, depending on how they grew up, but I can't imagine there are many places it's rare.

[EDIT] Incidentally, in addition to the tax-evasion and benefits-qualification purposes mentioned elsewhere, this tactic is also used to evade child support.

You work for someone and they pay you in cash. No banks or the IRS are notified. So you don't pay any taxes, but you also can't easily spend your money.

I know throughout much of Europe it also happens to pay some construction workers in cash. This removes the tax man, the construction worker makes more money, and the boss doesn't have to deal with as many regulations.

Cheating on taxes by companies paying workers in cash and then neither the company nor the worker reporting the money to the IRS.

I've heard of this being prevalent in NYC in particular. I remember reading a story, and it was corroborated by some folks I knew at the time, in particular about car repair shops and adjacent activities (like pick n pull style places, part resellers etc). The police, in large, know that a lot of these places use gray area sources for getting parts and sometimes labor, but they're not really itching to do much about it on that level, because it provides this type of employment across the board in the burroughs where its most prevalent.

I have no idea how true this is today, but in circa 2015 or so, seemed to very much be the norm.

Off the books is getting harder and harder. I live in an area of the UK with basically no uber coverage (just to avoid confounding factors) and every taxi driver wants me to pay cash even though I never carry any - simply because taxi drivers have always had a small or large undeclared income.

The corollary of this is that taxi drivers cannot raise their rates because that is regulated - and regulated at a level that was set when cash was common and so would be a level that baked in the tax fraud.

A strange catch-22 but one I suspect is growing. As more of the world is online payments or nfc payments the less wriggle room there is.

It makes me so sad to see how many people chime in, to sign on to this complete willingness to take some obvious exceptions & caveats & use them to decide there's no problem, that everything is fine. The effort gone through to wring out excuses for having no empathy, for ignoring the truth is revilesome.

I had a number of friends who sometime after highschool or college moved to NYC area & lived in ridiculously illegal cramped over-stuffed loud living spaces & struggled to eat, to be in the city. Struggling for jobs & work but feeling like they had to be in the city. These are mostly quite privileged folks who had good educations at good public schools, and still struggling to stay standing at all.

NYC is absurd to me, is shocking in extreme in it's cost of living, limited housing options, in how hard it can be to get by. There's a huge question in my mind of how many people fare & make it, transplants & many many natives raised there. The findings here completely lines up with my expectation & the unfortunately stark reality of life in such an amazing place. There may be some light grift, and some higher scale grift such as buying whole appartments, but by god, it hardly seems to change how hard it can be to find place, to gain income of sufficient scale for that grift to be of any real scale.

That just reminds me of a conversation last night. A friend's parents live in South East Asia and have a live in helper (common). He was describing the helper's bedroom as small and I was like "you just described a common apartment size in Japan".

Meaning, it was small because he's used to American sizes where the average residence size is 210 square meters where as in Japan is 93sqm add it's trivial to find apartments of 15sqm. No one blinks an eye because it's normal where as American often sees that and thinks it's some kind of exploitation.

Some of you might have lived in a space that small for a few years in dorm room in collage. You likely survived and weren't traumatized for being in that space.

This isn't to detract from the idea that many people in NYC might not be making enough money. Only that it's common to think people need more than they do ... And also that not being able to build smaller places means people end up having to pay for more than they could get by with.

Some people on HN are living in a bubble, with their level of empathy akin to those of pwASPD. Sometimes I get sick reading some comments to see how detached some folks are. This is one of them.

Discussing about the semantics of what "livable" means and whether the title is (in)correct while it doesn't change the grave reality of the situation at all. Unbelievable.

Respectfully, you're projecting far too much into my comment.

There are many human circumstances in NYC that are not acceptable, tenable, or sufferable. In fact, there are many that are exploitative, coercive, and frankly disturbing.

The reality is that there are 20+ million people living in the NYC metro area, a number that is increasing monotonically every year. Their experiences can't be reduced to a number like this, but if you try to do it, you should do it in a way that doesn't insult or mislead.

Part of being a New Yorker is "finding a way", and many of those ways fall outside the purview of studies like this one. This fact is our collective loss. All I'm saying is that there is a lot to be learned by studying the whole economy of the city and state, not only what's reported to the IRS and Census bureau.

If you look at my cousin comments in this tree, hopefully you can see some context here. I understand that calling for more data can come across as callousness, when the goal is helping the city's poor. I think you're missing the fact that the two are orthogonal: you can want more data and action now, which is the camp I'm in.

I point this out to people all the time. How many businesses operate cash-only in places like Chinatown? Why do you think that is?

> "60% of new yorkers are not earning a living wage" is inaccurate

Sure, but "60% of New Yorkers break the law to make a living wage" isn't any less scathing. Either way, the situation looks pretty bleak. At this point, I can't see a future where NYC doesn't become the next Detroit.

I don't think you know much about how Detroit collapsed if you're saying that. While crime and public safety have become issues, I think most of the blame can be assigned to police too lazy to do their jobs.

And NYC is one of the prime examples of "defund the police" movement, isn't it?

You can't see a future in which the US's (and arguably the world's) financial and cultural capital doesn't have the same fate as an industrial city?

A lot of NYC benefits- subsidized or free health insurance, subsidized housing, food stamps, free child care benefits, etc only kick in if your income is below a certain threshold. It’s very easy to work off the books in NYC and collect the benefits while still making a decent amount of money in cash.

> if you're poor and desperate, there are many ways to "live" that, while not particularly desirable to most people, are certainly available

They make the same mistake everyone does when running living-wage statistics nationwide and blindly applying that methodology to New York: “assum[ing] that a one adult family would rent a single occupancy unit (zero bedrooms) for an individual adult household” [1].

Nobody does this. You get roommates. It’s a luxury to have a studio to yourself in New York, and there’s nothing shameful in that.

[1] https://livingwage.mit.edu/resources/Living-Wage-Users-Guide... page 6

Do you think that people will choose illegal out of whim? I saw in manhattan that people where struggling behind low paid jobs. Low pay in scandinavia is above that threshold and people can afford a (more than decent) living.

> but "60% of new yorkers are not earning a living wage" is inaccurate

If we define living way as proper healthcare, paid time off, paid sick leave, adequate income to put into savings/retirement.. enough money for education, childcare.... then do you think that number is inaccurate?

I sure don't. And this doesn't have much to do with new york. At least half of the US population lives under these conditions.. probably even more.

The term living wage means more than putting a roof over your head and having a job. It's being able to not feel basically like a slave.

The (uncomfortable for us) reality is, for many people living in NYC, the things you mention are not considered minimum standards for a happy or fulfilled life.

4.4 million people in NYC are immigrants, many of them coming from situations where the phrase "standard of living" carries no water. These people want their children or childrens' children to have the life you describe, and see that as fair.

I'm not saying it's a good thing or an acceptable thing, merely calling it what it is. I agree with you that the government should be funding a higher standard of living for all. But reality as it exists today is more complicated than the platonic ideals we'd like it to be.

My coworkers and I do not earn a living wage for our locale from our company. That’s easily tens of thousand of employees at one of the largest companies in the world. I doubt most locales earn living wages working there in our job and similar descriptions. But, some receive thousands in tips per year which go unrecorded. Plus the job easily provides side work with the same customer network which also provides thousands in unrecorded income.

All to save the parent company some money, this huge grey network is spawned.

1000%. Restaurants in NYC are especially infamous for this (paying under the table) as are the trades

Man, I love tax deductions too much to do things off the books

I could have earned 7 figures that year and still get every stimulus check

but I understand the need to go off the books if you are living in NYC state subsidized housing

one city, two systems

What is this illegal economy and why is it unknown outside of NYC?

Cash businesses and a lot of cheating on taxes/income reports.

I have some NYC-native friends whose parents make less than $20k a year on paper but own homes and generally live comfortably.

This is common in their immigrant community. On top of that, people rent apartments to each other cash only, pay with cash at restaurants or grocery store, etc.

Must be fun to pay your taxes knowing that you are subsidising this BS.

EDIT: I think my comment was't clear: I pay my taxes, just not in the US. :)

I think that by tolerating tax cheating (withdrawing IRS funding), the US is punishing those who are honest.

My comment was triggered by the very nonchalant way how the above comments made it seem like a normal NYC thing to steal tax money.

If taxes are too high then they should be lowered. Selective enforcement is bad.

Just because other people cheat, doesn't mean that you should. Taxes are the price of civilization.

While true, it can still cause resentment if $subpopulation appears to be able to get away with "cheating" — scare quotes because it's not well-defined, and the resentment still happens even when the "cheating" is necessary to maintain existence rather than comfort, e.g. "Why do disabled single mothers get paid to look after their kids?" and "Why do we pay to house these people who fled a war and don't know if their families are still alive?" etc.

I don't have any solution here. Lots of resentful people claim to follow a specific dude that told rich people to pay their taxes, to give all their money to the poor, etc., and if a lifetime of religious practices don't persuade them what on earth can a random internet stranger like me do?

I agree on all points!

Income taxes are not necessary to civilization. See Bahamas, Monaco, Bermuda, etc. Maybe not perfect but the people there are 'civilized.'

Did I say income taxes?

Some taxes are the price of civilization. I don't know how anyone can look at our current taxation scheme and how it is spent and make the argument that what we're subject to in the US is civilized. Just look at how much of taxes go to government largesse in Washington DC and bombing people that don't look like us abroad.

It's 2023. We have the technology to run more and more parts of the government in a way that we pay directly for the things we use so that each need currently met by government is forced to be more efficient if people saw how much they are paying for that. Locally, I pay a separate fee for trash pickup. That's awesome. If all government services moved to a fee based approach, you could literally pick and choose what parts of being civilized you want and what parts you don't want.

> If all government services moved to a fee based approach

This is essentially just privatizing everything. Just have all the kids pay for their own schooling. Eliminate Medicaid, kids can afford their own healthcare. All social safety nets would be eliminated, as if they require the people receiving the benefits to fund it then those programs would just never actually work.

> Locally, I pay a separate fee for trash pickup. That's awesome.

Its not awesome when your neighbor decides to just no longer pay for trash service and starts piling up trash heaps right along your property line leading to extremely unsanitary conditions right next to your home. Or when your neighbors don't bother paying their fire department fees and that trash heap right next to your house starts burning but the department won't bother doing anything until its your house on fire.

I see this working by being forced to pay some $X (your taxes) but you can distribute that however you see fit. Another option could be packages such as "childless" where fewer of your taxes (but still some base amount) go to schools or "carless" where the bulk of your taxes go to local roads and mass transit rather than highways. I'd love to see this attempted on the municipal level. Especially in a city like my own, Toronto, where council loves to give yet more money to the police even though people are screaming for bike lanes or a home they can afford.

> Another option could be packages such as "childless" where fewer of your taxes (but still some base amount) go to schools

Good plan if you want to drive birth rates down even faster.

(which, some people actually do want)

>If all government services moved to a fee based approach, you could literally pick and choose what parts of being civilized you want and what parts you don't want.

And screw the poors while we are at it! Added bonus!

It's worse than that: it defeats the main benefit of having government at all, which is the ability to overcome thorny coordination problems.

In your world, people living in poverty would not have access to a basic K-12 education.

Ideally all children would get a good education, but I find it morally repugnant that unrelated person Y gets tossed in a cage if they don't fund person X's children.

your childhood was funded. or did your parents build the roads to the place where you were born? like it or not, a continuous society is a ponzi scheme of sorts. one which you benefitted from.

The funding of my childhood can be traced back capital investments and production in an old farming family, amongst other places.

The initial roads layout were likely put there by slaves. The capital growth needed to propel the family into generational wealth to fund our childhoods likely was fueled by slaves. We need to perpetuate slavery because muh roads were made possible by slaves and I benefitted.

Fortunately we can put the descendants of those slaves to work yet -- we'll call it 'property tax' and they still to this day work the fields, even if they're childless, to subsidize education of my farming family. If they don't pay it the sheriff just boots them out onto the street!

Taxation is not slavery.

It's not slavery. It just happens to be that these descendents in rural America often have to work agricultural jobs to pay their property tax (a tax that in turn pays for my extended farming family's kids' educations). And if they don't pay those taxes they get booted onto the street. And if they get booted on the street they eventually get tossed in a cage (instantaneously if they resist the booting). And when they get tossed in a cage, the 13th amendment against slavery no longer applies them. You see, you can't make them slaves (again) unless they don't do their forced field work!

Fortunately at least we seem to have understood the fact I benefitted and got roads from it, doesn't mean it needs to be perpetuated.

Funny that you never complained about farm subsidies.

> We have the technology to run more and more parts of the government in a way that we pay directly for the things we use

If it doesn't have externalities that make this undesirable, why is it a government function?

Hopefully some of it will be caught by the IRS now that they're finally at least close to being adequately funded -- assuming the "conservatives" don't succeed in their fight against reduced deficits and tough-on-crime policies.

Hate it break it to you, but the funding for the IRS consistently fell through Obama's entire tenure and was at least 20% lower when he left office than when he started, including the years that dems controlled both house and senate. Conservatives suck but don't buy into the narrative that they're the only shitty people.

Obama is pretty dang conservative, but setting that aside, the funding for the IRS is set by Congress. I've seen no sign that the democrats reduced the IRS budget while they held power, but I'll admit I may have overlooked it.

In any case, today, there's only one party opposed to the recent funding increase, and it's the party that proudly claims to be the most anti-crime and anti-deficit folks in congress. Those are the facts today. This absolutely makes them the shittier people.

Isn't this what a cashless society is meant to solve?

Hopefully California passes SB-926 making it illegal for stores to be cashless.

Cashless societies are evil. Advocates and supporters are the enemy of the people and deserve to be viewed as such.

the right and ability of individuals to trade amongst themselves, without undue restriction, is essential to individual liberty over the ages

I don't mind subsidizing it because I'm taking on significantly less risk by paying taxes, and these people aren't doing it out of some villainous intent, they're having a hard time getting by to the point that it's a worthwhile risk.

On the other end of the spectrum we have billionaires paying accountants and lawyers to exploit every tax loophole they can find. They don't even need to do it, they could easily just pay their taxes owed, but they choose not to.

I pay my taxes, not because I want to but because the state has right to licit first use of force and can throw me in jail if I don't. I personally have too much to lose so I comply. There's nothing moral about paying taxes because there is no consent involved. I'm not paying for things I'm using. I'm having money taken from me with no guarantee that I get something in return comensurate with how much is being taken from me with the threat of violence.

That being said, I'm not going to take exception with the people who are economically at the bottom and whose lives would be far worse if they didn't do what they can to avoid having their pockets picked by government. I wish my pockets weren't being picked but if someone else is able to avoid that fate, good for them.

It's far more moral for these people to keep the fruits of their own labor to make ends meet than for them to steal from other productive citizens trying to make a living, which is what we'd be forcing them to do if there was no way for them to avoid having their pockets picked by the government.

It doesn't sound like these people are at the bottom

It does to me. These are likely people that are living in lower quality housing with more people packed in per square foot of housing out of necessity. I don't have actually data to back up this assertion, but this has been my personal observation of folks that do the kind of informal work that allows them to be paid under the table.

We're talking about these people right?

> I have some NYC-native friends whose parents make less than $20k a year on paper but own homes and generally live comfortably.

There's some truth. My friend's parents don't live in desirable areas (to white collar workers) and in older housing. It is not rundown or anything, but it is an insular immigrant community. There's a reason almost none of their first generation kids stay in that area.

But they live comfortably — at least the people I talk to go on vacation often, were able to help my friend with student loans, have cars in NYC, etc.

Do you not enjoy having functional streets?

I'm sure the GP would be happy if his tax dollars went to building roads and bridges, and not the thousand other things that are of dubious worth to the nation as a whole.

And I'm sure someone else would be happy if their tax dollars went to those things you dub of dubious worth. Picking and choosing where your tax dollars are spent is impractical.

There is consent to taxation -- your parents consented for you on your behalf when they had guardianship over you as a child, by choosing to have your citizenship here. You implicitly maintained that by retaining your citizenship at the age of majority.

We probably agree in many ways on how badly tax money is spent, but that there is "nothing moral" about it is a statement that does not make sense.

Land Value Tax would fix it.

But Henry George lost his NYC mayoral bid all those years ago.

> Must be fun to pay your taxes knowing that you are subsidising this BS.

I wouldn't be angry at working middle- or upper-middle-class people cheating the taxman in order to actually enjoy a decent living. I'd be angry at the politicians, large companies and ultra-high-net-worth individuals that are able to legally but unjustly cheat the taxman (and ultimately the taxpayer) or otherwise unjustly enrich themselves or their friends via lobbying, under-the-table money or favours thanks to having the right connections.

Probably things associated as well as adjacent to the mob and such.

it exist everywhere, but larger cities have this problem largely because their taxation and regulation is exploitive forcing people out of the legal economy as a matter of self preservation.

Well that definitely sounds like a dream haha

How did they know what amounts attract attention? Trial and error? That would be pretty bad

Not sure about it being a dream! They've constructed for themselves quite a nice life, but because it's technically in the shadows, there's a lingering paranoia that it can all be taken away.

Re amounts: it's actually documented by the IRS to be $10,000 [1]. The bank is required to report cash deposits and transfers of $10k within a 24 hour period.

[1]: https://www.irs.gov/newsroom/understand-how-to-report-large-...

I lived near a bodega in east harlem that was cash only and had a bitcoin ATM in the corner.

> There is a large, technically illegal, economy to NYC which

How do you know that? Your next statement is that there's no good way to measure that income, how do you know how large that economy is?

It's either measurable, or immeasurable. You can't claim the know it's dimensions and also that you can't measure it's dimensions.

One can determine that something is large without measuring it accurately.

Yes, but there'd still be something more than conjecture and a single anecdote.

There's this:

https://www.irs.gov/statistics/irs-taxpayer-compliance-resea...

That's a lot better than anecdotes, for sure. The short answer seems to be about 83% tax compliance.

Anyone who has lived in the (NYC metro) region can almost certainly provide you more anecdotes. Filtering by circumstances I can personally attest to in NYC proper:

- 3 situations where nannies were being paid entirely under the table (this one is less common now that everyone I know is over 26 and needs health insurance)

- a small (legitimate) business owner who regularly employs a handyman under the table

- restaurant staff who don't report cash tips (too common to count)

- Street vendors all over the place (including those who were openly selling cannabis prior to legalization)

- Tour guides working entirely for cash

- Lots of technically-illegal off-the-books living situations (a living wage goes a lot further when you're willing to live in a basement studio apartment with no windows).

- Small stores with a "regulars" discount that never hits the register

Isn't there some wisdom about "the plural of anecdote is not data"?

Probably, but some phenomena can exist that don't get tracked well. At some point, a plurality of primary testimony that N is pervasive needs to be enough to break through the paradox of the heap.

> How do you know that? Your next statement is that there's no good way to measure that income, how do you know how large that economy is?

Because by the books, 60% of the residents of the most populous and most expensive metro in the US are living there while earning on paper less than a living wage, yet somehow still manage to do so. Either one or more of the following must be true:

1. There is a large off-the-books economy.

2. The study in the article incorrectly determines what a "living wage" is.

3. The vast majority of the people living in New York City are in absolutely dire circumstances but somehow won't leave to literally any other city in the US where they would immediately earn more relative to the cost of living.

I think /both/ #1 and #2 are correct, and that #3 might be correct for some people, but most people in New York City /like/ living there, they feel connected to the city, and ingrained in its culture, which includes a very large amount of #1.

To this last point, moving has costs. At minimum transport costs (fuel, bus ticket, whatever). If they have some furniture worth taking, they need a U-Haul.

People might not have the small amount of cash/credit required to move across the country. Staying in poverty in NYC might be their only option.

While you're correct, and I do account for this in my statement, most studies on the topic found that people refuse to move not due to financial reasons but due to social support systems, primarily family or cultural connections. Something that's not entirely unique, but relatively uncommon in the US, is large cultural and ethnic enclaves in cities, New York City happens to be home to largest number of these, and therefore many people grow up in New York City ingrained into a culture that ties into their ethnicity, and the city itself, in a way which they would not find anywhere else in the US if they moved. Leaving this and family behind to leave the city is considered untenable by many people, especially in cultures that emphasize family connections and multi-generational households as the norm.

These emotional draws are much more meaningful and significant causes for why people don't move than whether or not they can afford the U-Haul one time.

New Orleans also has this

Not just that, but in a world where (particularly for poor and immigrant communities) employment is frequently informal and based on social and family networks ("The restaurant my cousin works at is hiring" or "My brother's construction gig needs some extra hands on Friday"), moving to another city means giving up a huge portion of your social capital and possibly all of your earning potential, as well as your (similarly informal) safety net.

Surely dollar vans are still a thing for example

Not saying this doesn't happen, obviously, but is it really going to be anything more than a rounding error?

It is probably a rounding error for white collar and technology workers (the crowd here.) However, I'd doubt this is a rounding error for other trades (construction, electrical, plumbing, etc) -- so many repairmen demand cash or demand premiums if paying via Zelle/etc.

"Akshually, poor people are cheating on taxes and are way richer than you'd think".

Not necessarily poor people, but something like half of the world's workforce is "informal." Not formally recorded. The on-the-books view is way different than the total view.

Actually, in NYC it's not just poor people who are cheating on taxes. Tax fraud here can get pretty wild.

This isn't a kind or charitable way to respond. The GP isn't making any sort of moralizing claim about "cheating" or the city's underclasses being "way richer" than measured.

Went straight from "if you're poor and desperate [..] there are many ways to "live" that, while not particularly desirable to most people, are certainly available" to "I have a friend "whose family know how to work off the books and avoid the IRS [..] bought a building in Brooklyn for a low million dollar figure [..]. But their household was probably below the "living" wage, from the point of view of this data set, for the past 25 years."

That's a sleight of hand. "But look, I know some poor people who cheat !".

Yeah, a minority cheats. Now if someone can come up and say there are way less poor people than we think in NY and back it up it'd be another story.

Do you have proof of widespread tax evasion?

The last official estimates of the tax gap is $496 billion, and the IRS says that the number is likely approaching $1 trillion.

https://www.irs.gov/pub/irs-pdf/p1415.pdf

https://www.reuters.com/article/us-usa-treasury-irs-idUSKBN2...

That's for the country, we are discussing ny

That's how widespread it is! :)

But how much of that is low-wage workers? And how much is wealthy individuals trading in crypto, or hiring expensive lawyers/accountants to move their money around?

Page 20 breaks it down by source a bit, and you can probably gain some insight from that.

> And how much is wealthy individuals trading in crypto

The total of all unreported capital gains are 18% of the tax gap, according to the document. So, significantly less than 18%

> hiring expensive lawyers/accountants to move their money around?

Tax avoidance wouldn't be capture in these figures, so zero.

> trading in crypto

That would make it a negative number or more accurately an imaginary amount of tax evasion, right?

How do you comment on more than 100 thousand homeless children in NYC? Are they also a part of some cash scheme?

https://www.nytimes.com/2022/10/26/nyregion/nyc-homeless-stu...

Your own article addresses this: NYC (correctly!) counts students as homeless even if they're living long-term with other families or in family shelters, of which the city has many.

"100,000 homeless children" does not mean "100,000 street urchins." It means that many of the people who make up NYC's informal economy have living situations that the city (again, correctly) classifies as unstable, or who are dependent on the city for stable housing.

The eye-popping numbers of "homeless" in NYC are not comparable to the situation in California.

Many of the "homeless" in NYC are immigrant families in shelters. As NYC is a portal for immigrants coming to the US and some of them end up in difficulty, this is how it is.

This is different from the situation in California where the "homeless" really are sleeping outside.

Precisely. There are very few things that I give the city credit for with respect to how it treats its homeless and unhoused populations, but categorization is one of them: the city doesn't attempt to sweep the problem under the rug by pretending that shelters (including family shelters) are long-term housing solutions that offer stable lives for their residents.

> As an example, I have a friend who grew up in a working class family in south Brooklyn. His mother's job was "on the books" and his father's construction work was completely off-the-books, paid in cash. Everybody in the family was very aware of the amount of money you could deposit in a bank account, in a given time period, without attracting IRS attention.

I hope you reported them?

Let me get this straight: your point is that some people run off-the-book businesses, and that explains the severe poverty and lack of living wage?

> The existence of this grey economy makes it very difficult to measure income and expenses for a large proportion of New Yorkers.

Disgusting that your first thought is about how difficult it is to measure income and not the fact that working class people (your words) would lose a third of their income or more, if their work was in the formal economy.

It's even worse if you look at it the other way: working class people's wages would be 50% more, rather than 33% less.

Working class people (literally anyone who must work to have a modest lifestyle) should not be paying a larger percent of their wages than those who do not have to work.

Their comment is illuminating the current way things work, that's hardly disgusting. That status quo you may not like, but that's saying nothing about the author of the comment, or their views on that fact.

Your anger should be at the system, not the author pointing out a fact.

The people with income levels in question don't have a marginal tax rate anywhere close to 33%. More like 11% for federal and 6% for NYS before any credits.

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