Just Enough For the City

September 21, 2010
Posted by Jay Livingston

A New York Magazine cover in the 1970s showed a fortyish man – pudgy, grey suit, white shirt, striped necktie – sitting on the sidewalk holding out a tin cup with a few pencils in it. A sign around his neck said, “I MAKE $80,000 A YEAR, AND I’M BROKE.”

At the time, $80,000 was about 8 times the national median, the equivalent roughly of $400,000 today. The point was that the “ordinary” expenses of ordinary New Yorkers ate up a lot of money. To be barely middle class, you had to be rich.

That cover came to mind because of the recent dust-up in the blogosphere set off by a post by Todd Henderson, a Chicago law professor. Henderson was complaining about the Obama tax proposal – to keep cuts for all but the rich, i.e, those earning more than $250,000. Henderson didn’t say how much his income was, but he did say
  • that paying for mortgages, student loans, children’s education (private schools), and other expenses leaves him no room for luxuries.
  • that he already pays $100,000 in taxes
  • he certainly does not feel rich
Like most working Americans, insurance, doctors’ bills, utilities, two cars, daycare, groceries, gasoline, cell phones, and cable TV (no movie channels) round out our monthly expenses. We also have someone who cuts our grass, cleans our house, and watches our new baby.... [W]e have less than a few hundred dollars per month of discretionary income. We occasionally eat out but with a baby sitter, these nights take a toll on our budget. . . . [This is from an e-mail Henderson, or someone claiming to be him, wrote to Brad DeLong that DeLong reprinted.]
Henderson took a lot of flak. But there’s much to be said for his point, which is the same one that New York Magazine was making 35 years ago. Although these conclusions are not what Henderson intended, they still seem valid:
  • there is such a thing as society
  • society exerts pressure on people to spend their money on certain things
  • some of these are things which, if you could not afford them, you would feel that you were not a member of your society or social group
  • when income rises, so do these social “necessities.” Henderson sees private schools, two cars, and home ownership as necessities, not luxuries 
New York Magazine had the good sense to make the point with a touch of irony that Henderson utterly lacked. His sin was not that he feels strapped despite an income of $400,000 or more. It was that he seemed to have no feeling for the lives of those who earn half that, or those who have a merely average income ($50-60K), or those who scrape by on much less than the average.

As I recall, the New York Magazine story sketched out budgets for three different income levels. None of them, even the highest ($80K) left room for much in the way of savings or luxuries. This was around the time of the great Stevie Wonder’s great album “Innervisions,” and I had thought of writing a lyric based on its great song “Living For the City” (and I’m serious about all those “greats”). Here’s a slightly updated excerpt:
Six rooms on Central Park, the house out by the ocean.
He works at Goldman Sachs, he needs that next promotion.
His son’s at Yale, his daughters go to Brearly.
He only makes four hundred thousand yearly,
And it’s just enough, just enough for the city.
And so on.

Update: Since I started composing this post, Henderson has removed his original post “because my wife, who did not approve of my original post and disagrees vehemently with my opinion, did not consent to the publication of personal details about our family.” (Full retraction and apology here, but you can still find links to his original, now deleted post. Or try waybackmachine.)

I don’t know Henderson at all, and I hesitate to draw inferences about his character. But his new post adds to my original take – that he might be a decent and well-meaning person but that perhaps he is a bit short on self-awareness. He just doesn’t seem to realize how what he says will be seen by others – others like people with average incomes, others like his wife.

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