Westchester Magazine: "What Does it Mean to Be Middle Class in Westchester?"
High closing costs and a hefty property-tax bill nearly derailed Tipi Vyrasith and Michael Tuesca's family dream of purchasing a home in Greenburgh. Though they pulled it off, they stick to a tight budget in order to get by. Photograph by Stefan Radtke.
. . . The concept of the middle class is changing, says Farrokh Hormozi, a professor of economics at Pace University who has taught there for more than 30 years. While family incomes have gone up — largely because so many households now have two earners — so, too, has the cost of living. Despite the higher incomes, when the higher costs are coupled with a loss of skilled-labor jobs in manufacturing, factories, and technical trades (the closing of the General Motors plant in Tarrytown in 1995 is one example), Westchester, like many other places across the country, is seeing its middle class shrink.
Some people are doing better, but many others who once worked as skilled labor in manufacturing or related jobs are slipping onto the lower rung, he says. “We don’t have a middle class as we once did.”
The middle class has lost ground in every state from 2000-2013, according to a Pew/Stateline analysis of US Census data. While New York’s middle class shrunk by just under 3 percent, the losses were more profound in places like Wisconsin (-5.6 percent), Ohio (-5.2 percent), Nevada (-4.9 percent), Georgia and New Mexico (each at -4.8 percent).
The shrinking middle class is an outgrowth of the changing job market from manufacturing to information, says Villarreal, the policy fellow at NCPA, a nonpartisan group that advocates free-market solutions. Because there is less demand for lower skilled labor, a greater need for high-tech workers and federal programs are typically one-size-fits-all across all states (and designed to help those in need, not those starting businesses). Local governments can lead the way by encouraging entrepreneurship and small-business ownership while resisting the temptation of over-regulation, she says.
“The economy is evolving,” Villarreal says, citing ride-sharing giant Uber, restaurants, and other service industries as classic examples where local laws can make or break a new idea or squash a mom-and-pop altogether. “The key is to have public policies that allow people to adapt to the economy and change.”
For sure, Westchester has more than its share of local governments and bureaucracies (6 cities, 19 towns, 23 villages, and 425 governments in all), but unlike many other regions, it is buoyed by newcomers who are escaping New York City and its higher cost of living. It’s also somewhat stabilized by older adults who raised families here, choose to stay and are living longer. Both population segments, however, can have a tough time here for varying reasons: Seniors are trying to keep up with rising costs, high taxes and living on far less, while younger people haven’t reached their peak earnings yet.
For this reason and others, young professionals find it challenging to afford life here in the county. Take Samantha Diliberti, who, when she graduated college at age 21, had more than $100,000 in student loans — and a job that paid a pittance. “All of my money went to loan payments,” she says of a $700–$1,200 monthly bill that, when coupled with rent, left little else.
In the years that followed, she landed better jobs with more pay and occasional bonuses, but even that couldn’t reverse the mounting cycle of bills. Though she liked living in Brooklyn, the rent was high (often $15,000 a year). She also had four roommates.
Diliberti knew the math didn’t add up, so she moved back home with her mother in Yonkers, to save for a modest place. Although Mom and daughter get along well, it’s a sacrifice for both. “The main reason I’m doing this is that it’s the responsible financial choice,” Diliberti says.
In moving to the burbs, she bought a car, a used Mitsubishi Mirage, and tries to skimp on other nonessential purchases. She and her mother have had giftless Christmases for the past two years, as she feels no savings is too small. “Because I’m saving to buy, I’m definitely more frugal.”
At 26, Diliberti is now debt-free and saving for a co-op in southern Westchester. “It’s a happy medium between the city and suburbs,” she says. “I definitely can’t afford the five boroughs.”
Christina Barry, 27, followed a similar plan. Her parents, who are small-business owners, taught her the virtues of being debt-free. After graduating from Iona College, she moved home to Brewster, paid off roughly $50,000 in student loans and socked away the bucks. “I saved every penny I ever made,” Barry says.
It paid off. She’s mostly debt-free and bought a $124,000 co-op in Yonkers, which is close to work and close to New York City, where she and her friends like to socialize. Despite her sensible financial planning, frugality, and job stability, Barry is learning that life on her own is indeed expensive. So, too, is she hyper-aware that housing, property taxes, and the cost of living in Westchester could force her and her boyfriend, who also lives in Yonkers, to move elsewhere when they eventually tie the knot. “You have to think about these things,” Barry says. “I like the area; we have the best of both worlds, …but you have to pay a premium here.”
Many residents who don’t want to pay that premium are fleeing the state altogether for less expensive climes, like Florida, Texas, and just about anywhere the weather is warmer and the taxes lower.
A May 2016 report in the (Rochester) Democrat & Chronicle found that New York lost more than $22 billion in wealth between 2009 and 2014 from people fleeing the state. Of that, three counties in Florida — Palm Beach, Broward, and Miami-Dade — gained $1.2 billion of New York’s wealth in a single year. Much of this can be attributed to retirees decamping, but any Westchester resident knows a tale or two of people leaving for a lower cost of living.
The prognosis, however, isn’t all bad, says Pace’s Hormozi. Changing trends in healthcare, growing economic sectors, and the revitalization of many towns and cities with walkable communities could prove to make Westchester a vibrant place for young and old alike — as long as there are pockets of affordability and an education system that not only prepares some students for higher education but others for careers in skilled labor and the trades.
“This type of transformation is necessary,” Hormozi says. “Westchester County is part of the social transformation that has always taken place.”
What’s more, the economics professor adds, one should never discount the middle class, if for no other reason than one key attribute: “Hard work is the defining characteristic of the middle class,” he says.
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