Raises on Long Island: What can You Really Buy?
Median income on Long Island went up from 2015 to 2016 in both Nassau and Suffolk counties. Both also saw increases over three percent, meaning that both counties saw increases in median income over the inflation rate.
In 2015 the median income for Nassau County was $102,403 according to the Bureau of Labor Statistics, and $105,870 in 2016, a $3,467 increase. In Suffolk County the median income in 2015 was $89,488 and increased $3,455 to $92,933 in 2016.
While it may be comforting to know that wages have increased from one year to the next, it is important to look at these increases in the context of inflation. Economics professor at Hofstra University Robert Guttmann says that while increases in wages are great, one also should take into account change in purchasing power.
“A dollar in 2015 is not worth the same as a dollar in 2016.” Guttmann said. “In order to understand what your money is worth now you have to adjust for inflation.”
Some inflation is good, a healthy economy has a two percent inflation rate from year to year. “It’s important for prices to steadily increase, it keeps the economy growing. We shouldn’t start to worry until we see inflation rates reaching about four percent from one year to the next.
Long Islanders can rest assured, because according to the Bureau of Labor Statistics the inflation rate from 2015 to 2016 was hovering around 1.7%. To put that in terms better understood, for Nassau County median income of 2015, adjusted for inflation, would be worth $104,527 a year later, only $1,342 less than the median income in 2016. In Suffolk County the 2015 median income would be worth $91,344 after being adjusted for inflation, $1,588 less than the median income in 2016.
A $3,000 increase versus a $1,500 increase seems like a big difference, but Guttmann wasn’t worried. “Like I was saying, in order for the general public to notice the difference in their purchasing power from one year to the next the inflation rate would have to be four percent or higher, and that’s not what we’re seeing here.”
So good news for Long Islanders, their median income increases are beating the inflation rate, and if they see a repeated increase for 2017 they’ll be able to purchase the new iPhone X and have some extra left over.