 |
| Search |
|
|
|
|
Economy
Sunday, March 14, 2004; Page A01
NEW YORK -- Michael Bloomberg, this city's billionaire mayor, looks at Manhattan's glittering economy and all but chortles. "Jobs are coming back to the Big Apple," he said recently. "Our future has never looked brighter."
The Wall Street bull is snorting. Investment bankers arm-wrestle for a $18 million Park Avenue apartment. Slots at prestigious private kindergartens retail for $26,000. Lines trail out of the latest, hot restaurants, and black limos play bumper car in Tribeca.
"New York," a recent newspaper article proclaims, "it's HOT."
Except that a closer look at this largest of U.S. cities reveals much that's not so hot. New York's unemployment rate jumped in January from 8.0 to 8.4 percent, the worst performance among the nation's top 20 cities. It has lost 230,000 jobs in the past three years. Demand for emergency food has risen 46 percent over the past three years, and 900,000 New Yorkers receive food stamps. Inflation, foreclosures, evictions and personal bankruptcies are rising sharply. Fifty percent of the city's black males no longer are employed.
President Bush will journey here this August for the Republican convention, and he is expected to celebrate the revival of the nation's financial capital since the Sept. 11, 2001, terrorist attacks. But at this point, that recovery is characterized more by its weakness -- and by the stark disparities between rich and poor.
In the third quarter of 2003, the nation's gross domestic product grew at a rate of 8.4 percent; the comparable rate in New York grew by 0.3 percent.
"Our economy is polarized; our population is polarized," said Kathryn S. Wylde, president of the Partnership for New York City, which represents the city's 200 top private-sector chief executives. "The bonuses of a relative handful of very wealthy people are driving our economy."
The Invisible Poor
Around the corner from City Hall in downtown Manhattan, Arthur Harvey considers his economic prospects, which happen to stink. He is one of a record number of 40,000 homeless New Yorkers.
"My landlord raised my rent from $125 a week to $200, so I began to sleep in my mom's back yard in Queens," said Harvey, 40, with a goatee and hollowed-out eyes. "I used to work as a messenger, but the company's gone out of business.
"I'm in trouble, y'know what I mean?"
Seen from the perspective of Manhattan and the ever-more-swank streets of brownstone Brooklyn, these are curiously invisible hard times. Home prices spiral upward 10 percent or more each year, midtown is crowded and retail sales are strong, and the Wall Street bonus is back, $10 billion worth this year. A half-dozen new restaurants open each week, and a survey found that New Yorkers plan to eat out more than they did last year.
Nor is the current downturn as deep as recessions past. In the early 1990s, New York lost 360,000 jobs and the three horsemen of urban decline -- AIDS, crack and crime -- left its streets mean and forbidding. The plagues have stabilized, and the crime rate has plummeted. Bloomberg preserved many city services during the recession by raising property taxes.
"I live in Greenwich Village, and if you walked around the past few years, you'd never guess that 300,000 New Yorkers don't have a job," said Patrick Markee, a senior policy analyst with Coalition for the Homeless. "But if you venture out of the 'hot' neighborhoods, you find a lot of people doing phenomenally badly."
That other New York can be found in Chinatown and in Upper Manhattan, and across the East and Harlem Rivers in the Bronx and Brooklyn, where the unemployment rates stand at 10.3 and 8.5 percent, respectively. Queens is a proudly middle-class borough with thriving immigrant communities. But last year, 210 homeowners defaulted on their mortgages each month. Forty-five percent of those homes were auctioned off, twice the national foreclosure rate, according to Foreclosures.com, which analyzes national trends.
There are more harbingers of hard times. There has been a 20 percent rise over the past three years in the number of tenants being sued for nonpayment of rent. About 300,000 New Yorkers -- 10 percent of the city's workforce -- labor for less than $7 an hour.
"A lot of businesses have folded out here," said Al Titone, director of the Small Business Development Center at York College, which sits at the end of the E-subway line in lower middle-class Jamaica, Queens. "A lot of folks are in scary shape."
At the Yorkville Common Pantry, on the southern edge of East Harlem, director Jeffrey Ambers recently converted his food program for the poor into a 24-hour-a-day operation -- and began serving 12,000 more meals. "We are serving more people, and some days we run out," Ambers said. "We're not seeing signs here of an improving economy."
New York's labor participation rate -- the percentage of employed adults relative to population -- fell from 65.6 percent in July 2002 to 57 percent now. The city comptroller's office recently framed that drop this way: "If the labor force participation rate had remained at the level of July 2002, the NYC unemployment rate [now] would . . . rise to 19.9 percent."
Harvey Robins served as a senior official in two mayoral administrations, and has analyzed the city economy for 20 years. "We talk on and on about the price of real estate, but the other city is ignored," Robins said. "The elites focus on the difficulty of getting a restaurant reservation but never hear about the restaurant worker who spends 50 percent of his salary on rent."
Worrisome Job Market
Juan Batista has arrived at his 62nd year without a job or health insurance. For decades, the East Harlem man threaded fabric through textile machines -- until he was laid off in 2002. Now he leafs through the classified ads each morning and walks the streets. He sees rug stores but no longer the factories that make them.
His wife's salary is his sole support. "I don't want to retire, but I don't have the possibilities of youth," Batista said last week. "I'm worried. What can I do but wait for death?"
The talk of late on Wall Street is resurgent profits and young analysts hungry for their first Jaguar. But a survey of the job market finds worry in many corners. Manufacturing still employs 126,000 New Yorkers, but it has bled jobs for decades and lost another 1,100 jobs in January.
The private sector gained 20,600 jobs. But the Fiscal Policy Institute found that the sectors gaining jobs paid $34,000 less, on average, than the sectors that lost jobs. Health and education are the fast-growing sectors in Manhattan; the average salary for both is $42,000. But the cost of the average Manhattan co-op apartment is $983,000.
"It takes two of the jobs we've gained to make up for one that we've lost," said James Parrott, chief economist for the labor-funded Fiscal Policy Institute. "That does not bode well for the future."
Economic calamity has fallen with particular force on the shoulders of black males. The Community Service Society, a liberal social policy organization, discovered a sharp three-year decline in employment that has left 51.8 percent of black males holding jobs.
The city's core economic sector -- securities trading and financial services -- displays more strength. The Wall Street spigots are again running and profit margins are staggering. Securities firms recorded profits of $15 billion last year. This has fed a revival in advertising, legal work, catering, and restaurants and hotels.
Still, Wall Street remains a slender version of its Gilded Age self. Many firms retain corporate suites in New York but have placed back offices in Long Island and Jersey City, or farther afield. Last year, the nation gained 120,000 finance jobs; the city lost 1,500.
"We lag behind the rest of the nation in job creation in our key sectors," said Jonathan Bowles of the Center for an Urban Future, a think tank that examines the city economy. "The national economy is outperforming New York."
Hiding Behind Sept. 11
It is a matter of secular faith among many local politicians that New York owes the severity of its hard times not to structural economic problems but to the devastating effects of the 2001 terrorist attacks.
Several influential economists, however, offer a dissent. They note that the city pitched into recession in January 2001 and job losses were mounting rapidly before the attacks. They say the popping of the stock bubble and the city's economic dependence on Wall Street accounted, chiefly, for the severity of the downturn.
"The terror attack created sizeable job and income losses, but the city's current downturn appears to stem largely from the national economy and the financial markets," Jason Bram, an economist with the Federal Reserve Bank of New York, wrote last year.
The hangover from those attacks has stifled frank discussion. Analysts of various ideological stripes say the city needs to retool its taxes and fees -- which are among the nation's highest -- restructure labor contracts, raise the minimum wage and address its extreme reliance on Wall Street. But that conversation is rarely heard.
"September 11th came along, and there was all this talk of how it pulled us closer together," said Richard Murphy of the Community Food Resource Center. "But, economically, we are further apart than ever, and no one talks about it."
Partnership for New York City president Wylde added that nothing about the city's economic dominance can be taken for granted. "We had done a good job of restoring the middle class, but it's very transient, very fragile," she said. "We have an economy where a lot of job growth is epitomized by restaurant jobs and nannies."
As if to underline this point, Bloomberg News Service reported that there are 15 applications for every $26,000 seat at the most prestigious private kindergartens. And last month, the Time Warner twin towers opened at Columbus Circle, occasioning fleets of Lincoln Town Cars and apple martinis and gymnastics by Cirque du Soleil. Undercover cops came in tuxes, as did reporters.
"It's like a mecca for everything," wrote one local newspaper scribe.
That same evening, three miles to the north, Clinton Campbell, 47, walked into a Community Food Resource Center in Harlem to have his tax forms prepared for free. An African American and New York native, he managed a McDonald's until he was laid off a year ago. Now he collects unemployment more often than he works.
Afterward, he walked down Eighth Avenue to a food pantry for dinner.
"I worked at a grocery store last month, but I was too old to lug boxes upstairs," Campbell said as he stood on line with a tray. "They say if you make it here, you can make it anywhere. But I'm hurting real bad."
With that he excused himself, said a prayer, and lifted his knife and fork.
Copyright or Used by Permission, ©2006 ChewinTheFat.com
Top of Page
|
|
|
|