View Full Version : The Recession
February 19th, 2003, 01:48 PM
February 19, 2003
Economy Is Tough All Over, but in New York, It's Horrid
By LESLIE EATON
Michael Amodeo is New York's most prominent auctioneer of failed restaurants and bankrupt businesses, and these days he is a very busy man.
"It started right after the bubble ended in 2000, but after 9/11 it got really bad," said Mr. Amodeo, who was on the 50th floor of a skyscraper in Lower Manhattan one recent day selling off the contents of a cafeteria that once served a company that is now retrenching.
The economic slump, he added, is affecting all kinds of food businesses, "restaurants and caterers and delis."
The rest of the country may be debating whether the economy is recovering or heading into a second downturn, the dreaded "double dip." In New York City, there is no question.
The economy here is in recession.
New York City has lost almost 176,000 jobs in two years — more than the population of many cities. The unemployment rate, which in the spring of 2001 had fallen to 5.3 percent, has been climbing steadily and jumped to 8.4 percent in December.
While the national economy has shown at least some growth, as measured by gross domestic product, a similar measure of the city's economy shows that it has been shrinking for two years. The New York City comptroller's office is forecasting another decline this year.
Evidence of economic hardship in the city is increasing. There has been a big rise in the number of people who have been jobless for more than six months, and tens of thousands of people have exhausted their unemployment insurance benefits but remain out of work. The number of households not on welfare but receiving food stamps, which some analysts cite as an indicator of a bad economy, has risen 20 percent in the last year, to 124,000.
New York City has gone through boom and bust before, most recently during what Christine M. Cumming, director of research for the Federal Reserve Bank of New York, described as "the long economic winter" from 1989 through 1992. The entire region suffered then; Connecticut, New Jersey and New York State lost hundreds of thousands of jobs.
But what has surprised economists this time is that the economic carnage has been concentrated in New York City — and only New York City.
Connecticut and New Jersey, relatively small and urban states, have suffered in the economic slowdown, but the unemployment rates, 4.6 percent and 5.5 percent, respectively, remain below the national average of 6 percent. Upstate New York, often described as economically beleaguered and suffering from steep declines in population, has an unemployment rate of just 4.9 percent.
Even areas long considered suburbs of New York City, with economies that had been tightly linked, are faring far better than the city. On Long Island, employment has declined by fewer than 4,000 jobs in the last two years; Westchester County, home of many of the city's bedroom communities, has had a dip of fewer than 3,000.
In the past, "we always received an equal-opportunity clobbering," said Marc M. Goloven, a senior regional economist for J. P. Morgan.
But in other parts of the region, the economies have become more diverse and less reliant on a few big industries. Their new bases of small and medium-size businesses, Mr. Goloven said, "represent a sea wall beyond which New York City's recession tide could not spread."
New York City's economy is also more diversified than it was 20 years ago, when Wall Street was the be-all and end-all, Mr. Goloven and other economists say. There are more retail and tourism businesses and, despite the dot-com bust, more technology companies. Immigration has brought economic vibrancy to many city neighborhoods.
"It's not like a town with just one auto plant," said James P. Brown, who analyzes the city economy for the State Department of Labor. "But a lot of what New York City does is related to the same thing: we sell services to other businesses." So while the 2001 recession arrived more slowly than it did in some manufacturing towns, it hit home all the same.
Then came the attack on the World Trade Center. James Parrott, chief economist for the Fiscal Policy Institute, a labor-backed research group, has calculated that half of the job losses in the last two years can be traced to the economic aftershocks of Sept. 11.
Big financial firms were displaced. Thousands of small businesses in Lower Manhattan were destroyed.
The steep decline in travel and tourism hurt not only restaurant- and hotel-heavy Manhattan, but also Queens, where many people lost jobs in and around the airports.
The fallout continues all over the city. In Brooklyn, about 1,100 businesses recently filled out questionnaires on business conditions for the Brooklyn Chamber of Commerce. More than two-thirds said they had lost revenue as a direct result of 9/11, and almost half of that group had laid off workers, said Kenneth Adams, president of the chamber. Very few, 45 of 365 businesses that cut workers, have rehired people.
"People talk about the ripple effect of 9/11, but ripple is understating it," Mr. Adams said. "To many businesses, it was more like a tsunami."
The shadow of Sept. 11 continues to hang over many businesses.
"New Yorkers have taken a huge beating to our self-confidence and entrepreneurship," said Chan Suh, chief executive of Agency.com, the company whose cafeteria equipment and excess office furniture Mr. Amodeo was auctioning.
A rare survivor among the city's once flourishing Internet sector, Agency.com still has 75 employees in New York City, as well as offices in San Francisco, Chicago and Boston. Mr. Suh said the business climate in New York was different.
"People are more reluctant to make decisions, launch something, get something started," he said, adding that worries about war and terrorism made things worse. "We know New York is a focal point," he said. "That's not just hubris: we know New York is a symbol."
If New York was the terrorists' target, Wall Street was the bull's-eye. And the financial industry, possibly the most important to the city in income if not in jobs, is in dire straits.
The stock market has dropped for three straight years, the only time this has happened since World War II. December is usually a good month for the stock market; in 2002, it was the the poorest since 1931.
Even worse for New York City's financial firms, corporations across America have largely stopped merging, making acquisitions or selling stock. Helping companies do those things — the business of investment banking — is where financial firms make the really big profits. At least, they used to.
Wall Street's revenues and profits have plunged. Bonus payments dropped to $7.9 billion last year, from $12.6 billion in 2001 and $19.4 billion in 2000, according to estimates by Alan G. Hevesi, the state comptroller. On Wall Street, bonuses are not icing, they are the cake. (Bonuses often dwarf base pay, and almost nobody in high finance lives off the salary.) This means Wall Street workers have just taken a $4.7 billion pay cut.
That bonus money has paid for a lot of things in New York City: high-priced apartments, private school tuition and lavish dinners at Alain Ducasse. But it has also provided paychecks for a lot of people, like nannies and housekeepers, livery car drivers, restaurant deliverymen and the like.
Taxes on those big bonuses and on stock-market profits also used to bring hundreds of millions of dollars into city government's coffers; their decline goes a long way toward explaining the city's fiscal crisis. The city is billions of dollars short of the money it needs to balance its budget, and analysts fear steep cutbacks in areas like health care, which has been one of the few bright spots in employment.
In the future, far fewer Wall Street employees are likely to be around to get whatever bonuses are paid. Brokerage firms have laid off more than 23,000 New Yorkers in two years. That is more than 12 percent of their work force, and they are not finished.
Even if the stock market rebounds, "the securities industry here will probably stagnate," said Frank Fernandez, chief economist for the Securities Industry Association. Wall Street firms have been cutting back the number of employees in New York for years, Mr. Fernandez said, and New York remains an expensive place to do business when companies are desperate to cut costs. The attack on the World Trade Center convinced some financial firms that they had to spread out their employees, decisions reinforced by federal regulators worried about the nation's financial markets if another disaster occurs.
For employment in New York City to improve, Mr. Fernandez said, investment banking must rebound, and that does not appear to be on the horizon.
Even enactment of President Bush's proposal to cut taxes on corporate dividends would not provide much immediate increase in Wall Street business, he added, in part because few corporations are in a position to pay dividends.
What all the laid-off investment bankers are doing these days is unclear. Most received severance packages for which they were sworn to secrecy about their former employers. The last thing they want to do is appear as a hard-luck case in a newspaper article.
But they are out there. In certain neighborhoods of Manhattan, in certain suburban towns, there has been a sudden increase in people with time on their hands. Some are from Wall Street; others had high-paying jobs in advertising, publishing or consulting.
Now, they are "working at home," said Owen R. Berkowitz, who runs a bakery in Pelham, in Westchester County. Commuters he used to see at dawn before they crowded onto trains are now stopping by after they drop the children off at school. Normally, he added, "in Westchester, men are not around at 10 of 9."
Paul Bernard, a consultant who works with executives, said he used to tell clients that finding a new job might take six months; now he warns them to expect to hunt for up to 14 months.
Those who graduated from business school three or four years ago are in a particularly tough spot, he added. "There are very few jobs for people in that category, if they want to stay in New York." He has even had M.B.A.'s apply to be his office manager, a job that pays about $60,000 a year. He said he had received almost 1,300 résumés from applicants.
One may well have come from Vicki Herschman, 43, who lives on the Upper East Side of Manhattan. She said she had been sending out hundreds of résumés a month. Laid off from her job as a magazine circulation assistant in July 2001, Ms. Herschman has not been able to find a job of any kind.
"I've applied to places like Starbucks, but they see me as overqualified or say I don't have a retail background," she said. The employment agency that helped her find her last job has gone out of business.
Her unemployment benefits ran out early last year, Ms. Herschman said, and she has found it increasingly hard to keep body and soul together. She continues to volunteer at a soup kitchen, but does it now to get free meals, and she says she considers it a good week when she can afford subway fare.
Recently, she overcame her embarrassment and applied for public assistance. She is still looking for a job, but she is considering leaving New York City.
"I find it, especially after 9/11, gloomy and negative and depressing," Ms. Herschman said. "Before, it was lights, camera, action."
College-educated workers like Ms. Herschman are more likely to find themselves unemployed than they were in previous recessions, economists say. But those most likely to find themselves out of a job in New York City are blue-collar workers, those without high school diplomas, the young, and black and Hispanic workers, said Mark Levitan, senior policy analyst for the Community Service Society, which helps the poor.
Despite the gloomy statistics, visitors can roam the streets of Manhattan without noticing signs of economic distress. And their presence is part of the reason: tourists have returned to Times Square, and if they do not spend as much as business travelers or international visitors, they are keeping Broadway and other businesses alive.
Real estate remains relatively strong so far. Apartment prices have not tumbled, as they did in the last recession. An increasing number of small storefronts are empty, but retailers continue to open big new stores.
Vacancies in office buildings have risen in the last year, but the percentage of empty office space in Manhattan remains well below the average for city downtowns, said Bruce Mosler, president of United States operations for Cushman & Wakefield, real estate brokers. Much of the space available is being put up for sublease by retrenching companies, Mr. Mosler said.
That is the fate of the former cafeteria in the skyscraper, one reason the equipment had to be auctioned — to get it out of the way of potential tenants.
But also on display at that auction were the optimism and determination that New Yorkers like to think characterize them as much as their gift for complaining does. Despite the poor economy, several bidders were planning to open new bars or restaurants in the city.
One was Aricka Westbrooks, 32, of Brooklyn. Until about a year and a half ago, Ms. Westbrooks had one of those "only in New York" careers that combined fashion, public relations and the Internet. But after she was laid off — twice — she decided to go into business for herself, she said.
So, if all goes well, she will soon open a takeout restaurant in Brooklyn called Jive Turkey (after the house specialty, which will be deep-fried).
It is not at all what she expected when she moved to New York City seven years ago, she said, but she has no intention of moving back to Chicago.
"Never that," she said firmly. "Never, ever, that."
Copyright 2003 The New York Times Company
February 19th, 2003, 02:44 PM
The economy here is in recession.Certainly in my industry (arch./eng.) there have been lay-offs and cutbacks everywhere. Hasn't been this bad since George Bush Sr. was in office.
February 19th, 2003, 05:57 PM
This is tough. *What the hell is NY gonna do? *
I would like to think that NYC can somehow lure some est'd businesses to the city and build on the tech/bio-tech industry, but who knows.
It'll come back, though. *NYC always comes back - *that's why there's no place in the world I'd rather be.
February 20th, 2003, 12:31 AM
I don't understand how businesses and people would be so terrified of going anywhere near New York at this point. And why would Mike Bloomberg be pitilessly attacking smoking in bars and clubs when 160,000 of us are on the unemployment lines?
February 20th, 2003, 09:29 AM
yet our gov't. can give 26 billion dollars to Turkey but can't give that much to its #1 city who has just been attacked.
February 20th, 2003, 10:32 AM
Really, when are we gonna stop "aiding" all these damn countries.
Nobody, but maybe UK, Canada, and Australia consitantly back us.
February 22nd, 2003, 02:04 PM
I think that rebuilding the Twin Towers will restore the economy that NYC lost on 9/11.
February 24th, 2003, 04:16 AM
Only if that reconstruction doesn't linger forever. Otherwise there won't even be much need of a rebuilding. People and businesses will start to think the big void is just fine.
March 12th, 2003, 06:01 AM
March 12, 2003
Tough Times for the City Are Lingering
By MICHAEL COOPER
New York City's recession has now lasted two full years, according to a report on the last quarter of 2002 issued yesterday by the city's comptroller, William C. Thompson Jr.
Jobs and tax collections fell during the last three months of 2002, as the rate of inflation and office vacancies increased. And the city's economy continued to shrink, even as the nation's grew. "It is imperative that we work to quickly decrease the burden this recession has placed on our budget," Mr. Thompson said in a statement.
The report found that the city lost 29,000 jobs in the fourth quarter — which was its worst quarterly drop in a decade, with the exception of the quarter that immediately followed the World Trade Center attack. The city's unemployment rate rose to 8.1 percent in the fourth quarter of the year, well above the nation's 5.9 percent unemployment rate. During all of 2002, it said, the private sector lost 88,300 jobs.
The inflation rate in the metropolitan region rose to 3.1 percent in the fourth quarter on an annual basis, up from 2.6 percent in the third quarter. The report said that it gave New York the fourth-highest inflation rate of the nation's 14 largest metropolitan areas. The report also said that the gross city product, a measure of economic activity, fell by 2.2 percent in 2002, which is significantly worse than the 0.3 percent drop in 2001. While the city's economy declined in the fourth quarter, the nation's grew moderately.
The lingering recession is bad news for the city's budget makers, who several times have had to scale back their estimates of how much the cash-starved city would collect in taxes this year. Mayor Michael R. Bloomberg and the City Council are grappling with how to close a deficit of roughly $3.5 billion in the fiscal year beginning July 1.
With few signs that the economy will take off in time to fill the city's coffers, Mayor Bloomberg is increasingly looking to Albany and the city's labor unions for help. City agencies are due to report back to the mayor today with their plans for cutting $600 million in case the unions do not come through.
Copyright 2003 The New York Times Company
March 12th, 2003, 08:45 AM
The combination of high inflation and decreasing activity is a sign that the demand and the resources are still there even though the production is relocating elsewhere.
It's just a phase.
March 14th, 2003, 05:25 AM
March 14, 2003
Job Losses in New York City Since 9/11 Continue to Grow
By LESLIE EATON
The national recession and the attack on the World Trade Center cost New York City 47,000 more jobs than previously believed, bringing the city's total job losses to about 223,000 in the last two years, according to new data released yesterday.
The State Department of Labor, which released the revised job loss figures, also reported that the unemployment rate in the city edged up in January, to 8.6 percent from 8.5 percent in December.
The increase was not large, but contrasted to the trend in the rest of the state and the nation, where the average jobless rate fell three-tenths of a percentage point in January. Nationally, the unemployment rate averaged 5.7 percent that month; in New York State excluding the city, the rate was 4.7 percent.
"We're weaker than the nation," said James P. Brown, who analyzes the city's economy for the State Labor Department. And given the kind of industries that dominate the city's economy, including Wall Street, Madison Avenue and business services, he added, "we will continue to lag until there is a noticeable improvement in the national economy."
Economists had been expecting that job loss figures would be revised upward this year, though some were surprised by the magnitude of the increase.
The Labor Department compiles its jobs data from a monthly survey of 18,000 businesses across the state. Once a year, it compares the results of its monthly survey with data it receives from business tax returns.
In years when the economy is strong, the revisions usually show that more jobs were created than the department's survey shows; in years when the economy is weak, the losses are usually greater than the survey originally indicated.
The effects of the World Trade Center attack were particularly hard for the survey to measure, said James Parrott, the chief economist for the Fiscal Policy Institute, a labor-oriented research group. "The nature of the survey is that it always misses what's going on in smaller firms," he said, "and 9/11 had a disproportionate impact on small firms."
But the new jobs data also show that the economy had begun to stall even before the effects of the attack were felt. There were also larger-than-expected job losses in the second half of last year.
One possible bright spot in the Labor Department's report was that in January, the number of jobs fell less sharply than in 2002 (employment typically falls in January as stores and restaurants lay off holiday help and corporations cut employees to meet budget goals).
In fact, after adjusting for those seasonal factors, the number of jobs in the city may have actually risen, said Barbara Byrne Denham, the chief economist for an economic newsletter called The New York Stat.
The current downturn may seem especially harsh because it was preceded by a boom, whereas the economy was anemic for several years before the city's last recession began in 1989, said Jason Bram, an economist at the Federal Reserve Bank of New York. That recession cost the city about 300,000 jobs, he said, adding, "Hopefully, we won't get there."
Copyright 2003 The New York Times Company
March 16th, 2003, 08:09 PM
American cities that are heavily dependant on major national industries (i.e.: New York and finance, Detroit and automotives, Chicago and shipping) are generally the first to feel the effects of an economic recession and the last to feel the effects of an economic upswing. *If the national unemployment rate is starting to go down, then that could mean that sooner or later unemployment will go back down.
Considering that unemployment only rose .1% since the end of 2002, I think that it could be a sign that job losses are levelling out.
For now, lot of companies still seem eager to hire, if not for just temporary positions (me and my law firm) or for summer jobs (my sister and Deutsche Bank).
May 6th, 2003, 08:18 AM
May 6, 2003
City's Crisis Doesn't Mirror the Big Picture, Economists Say
By JANNY SCOTT
For months, the New York City economy has been described in terms neither encouraging nor dire. Sluggish, it has been called by economists. Anemic. Weak. Joblessness is up and wages are down, but the city has seen worse. Firms are not departing, home prices have not plummeted, residents are not jumping ship.
Then last month, Mayor Michael R. Bloomberg unveiled two budgets. The first he called painful; the second, devastating. His best-case plan entailed laying off 4,500 city workers.
His worst-case one would have required 14,500 layoffs, 40 firehouse closings, padlocked swimming pools, fewer police officers.
The term used for the second budget was the "doomsday budget."
The Legislature has since agreed to help the city, raising the sales tax and imposing a temporary income tax surcharge on higher-income New Yorkers. But the doomsday terminology brought home a paradox: The city government is in crisis; yet the economy appears not to be — at least, not quite.
"I haven't heard anybody refer to the economy as the `doomsday economy,' " said Marc M. Goloven, the senior regional economist at J. P. Morgan Chase. "If you view it through the lens of the public sector budget, things do look pretty bleak when you are facing significant budget deficits.
"But one can be generally optimistic about the economy," he said, "because if indeed the national economy picks up steam and gathers momentum, then the New York City economy will, too. And it does appear that the national economy is picking up steam."
A municipal budget, after all, is a product of more than the health of the local economy.
It is shaped by past decisions about taxes and spending, along with things like the political calendar and the availability of state aid. In New York City, a handful of high-paying industries contribute disproportionately to tax revenues. When those industries stumble, the city's finances collapse.
The city's economy is certainly not flourishing. More than 225,000 jobs have been lost since late 2000. The unemployment rate is 8.8 percent, compared with 6 percent nationally. Wage earnings have declined for two years in a row. Hard-hit industries have cut a quarter to half their jobs.
On Wall Street, the profits of New York Stock Exchange member firms dropped to less than $7 billion in 2002 from $10.4 billion in 2001. Companies cut their compensation expenses by 11 percent.
The resulting layoffs and cuts in bonuses have reverberated throughout the city.
And there is more.
"The economy is more than just jobs and wages," said Andrew M. Joseph, the city's deputy comptroller for the budget.
"They're a convenient measure," he explained, "but people at times can get overly focused on them. There are other portions of the economy, including profits and capital gains."
James Parrott, chief economist for the Fiscal Policy Institute, a labor-oriented research group, said, "I'm one of those people who think that the recession is as severe, if not more so, than the budget from the point of view of the effect on average people in New York."
The economy does not appear, however, to have sunk to the levels it reached during the recessions of the early 1990's and the 1970's. Between 1987 and 1992, New York City lost about 340,000 jobs. Unemployment peaked at 11.6 percent. In the 1970's, the city lost 600,000 jobs.
This time, there has been no exodus of employers as in earlier recessions. Housing prices may have dipped a little but have remained relatively stable. The crime rate has continued to drop. A handful of industries, including several big ones, have weathered the recession moderately well.
Jobs in health care and education, for example, have actually increased since late 2000, as have jobs in social services. Jim Brown, a labor market analyst for the State Department of Labor, said some retail service sectors are also doing all right.
Marcia Van Wagner, chief economist for the Citizens Budget Commission, a nonpartisan civic organization, said of the recession: "It's heavily concentrated in two areas, in the financial sector and in the tourism industry. Which is not to say that other people haven't been hit.
"What you're not seeing is a lot of boarded-up stores," she said. "Toward the tail end of the recession in the early 90's, that was noticeable. That becomes a visible sign of a failing economy. That's not something we're seeing at this point, at least not in the central business district."
She added: "For most people, if you have a job, you don't notice that much. It's that old saw about the difference between a recession and a depression: A recession is when your neighbor loses his job, and a depression is when you lose your job."
The city's fiscal crisis, on the other hand, is unambiguous.
Until the Legislature and the Bloomberg administration reached agreement over the weekend, the city was facing a $3.8 billion budget gap in the coming fiscal year. And Gov. George E. Pataki has said he would veto at least the state portion of the proposed tax increases.
Under Mr. Bloomberg's merely "painful" budget plan, the city would lay off more people than at any time since 1991. Children's clinics and two zoos, among other things, would be closed. Under the "devastating" budget, the Police Department would be shrunk to its smallest size since at least 1995.
"We have a very bad budget situation," said Carol O'Cleireacain, a former New York City finance commissioner and a budget director during the Dinkins administration who is now a nonresident senior fellow at the Brookings Institution. "But we have had worse economic situations."
The fact is, the local economy and the budget do not move in unison, economists say.
It takes time for an economic downturn or upturn to leave its full mark on the budget. Early in the current recession, the city still had accumulated surpluses to fall back on. And after the 1990's recession, the city remained in bad fiscal health for two years after job growth resumed.
Now, the national economy is no longer in recession, although some signs are pointing that way again. The rate of job loss in New York City is said to have slowed. But the damage done to city revenues by two years of decline and malaise is glaringly apparent.
"The government tends to be late to the party," Mr. Brown said. "Private sector employment peaked out at the end of 2000. We're only really getting discussions of layoffs now. In 2001, when the economy was already weakening, city tax revenues were still influenced by those nice, fat bonuses."
The crisis also reflects the nature of the city's tax structure. New York depends heavily for its revenue on certain high-paying industries, and those industries, including the securities industry, are the ones that this time around have been worst hit.
The tax structure is especially sensitive to fluctuations in income, economists say, because the city has a personal income tax and business income taxes. The current recession has been characterized by an unusually steep drop in income, resulting in a steep drop in tax revenues.
"You have tax revenue that is much more dependent on certain sectors of the economy than on others," Ms. O'Cleireacain said. "You've got some powerful engines. And when those engines stall, everything can go on well for other people, but it makes a big dent. To me, that's the kernel of it."
The city's dependence on the financial sector appears to have increased in the 1990's. According to Mr. Joseph of the city comptroller's office, financial services and insurance accounted for 3.9 percent of all jobs in 1990 and 9.3 percent of all wages. By 2000, that sector accounted for 5 percent of all jobs and 19.8 percent of all wages, or one-fifth of the city's economy.
"It may have been hard hit but it's a wealthy sector generating huge amounts of economic activity," Mr. Joseph said. "If you have a sector that was huge and it contracts, it will have a disproportionate impact. But it still can be the major element of your economy."
So which is a better indicator of the city's health: the economy or the budget?
"You have to take the two together," Ms. Van Wagner said. "Part of the condition of the city is how solvent the government is. Clearly, there are serious problems. And if the city engages in a lot of layoffs and has to reduce services, that's going to affect the economy and the attractiveness of the city."
Copyright 2003 The New York Times Company
May 6th, 2003, 08:46 AM
You have to take the two together," Ms. Van Wagner said. "Part of the condition of the city is how solvent the government is. Clearly, there are serious problems. And if *the city engages in a lot of layoffs and has to reduce services, that's going to affect the economy and the attractiveness of the city."
That's why, though not popular, the right decision was made in Albany to increase revenue rather than cut expenditures.
Pataki is now in a position, if he vetoes the measure, to be labelled with "drop dead NYC." Assuming he is looking for a national post, this would look far worse on his resume than "he raised taxes."
May 6th, 2003, 10:48 AM
Or some of the fluff can be cut. *Didn't the budget rise from $45mil to $60mil in only a few years? *That's ridiculous.
May 6th, 2003, 09:21 PM
What fluff? Be specific.
May 30th, 2003, 05:06 AM
May 30, 2003
Unemployment Rate in City Drops With Rise in Private-Sector Jobs
By JANNY SCOTT
The unemployment rate in New York City dropped in April for the second time in two straight months, this time to 8.3 percent from 8.5 percent, according to monthly data released yesterday by the State Department of Labor. The number of private-sector jobs grew more than it had in many months.
The city comptroller, William C. Thompson Jr., said private-sector jobs in the city had increased by 10,700, when seasonally adjusted. He said the increase amounted to the largest single-month gain since September 2000.
Job gains were reported in construction, financial activities, education and health services, with losses in leisure and hospitality and in manufacturing.
Statewide, the number of private-sector jobs grew by 9,400 after seasonal adjustment, according to the Labor Department.
Several economists said the new numbers were somewhat encouraging. Some said they showed that the state economy was slowly recovering from the national recession, the troubled state of Wall Street and the Sept. 11, 2001, attacks. In New York City, they said, the numbers suggest a leveling off after many months of decline.
"When things are bad, a little bit of good news is encouraging," said Jason Bram, an economist with the Federal Reserve Bank of New York. "The March numbers were looking bad. Now it looks a lot better. Not a boom, but a lot better. For now."
Stephen Kagann, the chief economist for Gov. George E. Pataki, said in a statement: "The data show the New York State economy is slowly improving. Most regions are gaining jobs or are stronger than the nation, and the regions in decline are declining at a diminishing rate."
Employment growth in the New York City suburbs and upstate has outpaced that of the nation as a whole over the past year, Mr. Kagann said. Job losses have been concentrated in New York City, Rochester and Binghamton, but the rate of decline has slowed, he added.
Jim Brown, a labor market analyst for the state, said the new numbers showed "above-average strength" in construction and employment services. Those services, which include temporary agencies, are considered a barometer of business conditions.
Mr. Brown said the decline in New York City's April unemployment rate could be traced to actual employment gains rather than to a drop in the number of people seeking jobs, as had been the case in March.
The state's unemployment rate rose to 6.1 percent from 6.0 percent.
Copyright 2003 The New York Times Company
June 1st, 2003, 02:48 PM
Some people are still leaving the workforce, however.
August 4th, 2003, 08:59 AM
August 4, 2003
Clues Start Emerging About the Losses Since the '90s Boom
By JANNY SCOTT
If the boom of the late 1990's was the best thing to happen to New York City in recent memory and the recession that has followed has been among the worst, it seems logical to wonder, 30 months into the city's lingering economic downturn, how much of the gains of the 1990's have now been lost.
It could take years to answer that question definitively, economists say, but some clues have begun to emerge. The losses have been big but not all-consuming. Some of the people hit hardest were among those who had benefited most from the boom. But others who have been hurt had gained relatively little.
Consider the job count, the simplest measure of gains and losses. The number of jobs in the city was 3.53 million in May, down from nearly 3.76 million at the peak of the boom. But the May figure is still a quarter million more than the job count in November 1992, during the previous recession, and similar to the count in mid-1998.
The job losses have not been distributed evenly. Mark Levitan, a senior policy analyst with the Community Service Society, a nonprofit group that serves the poor, has found that women in New York City made larger percentage gains in job-holding in the 1990's than did men, and that women have suffered smaller percentage losses since.
By contrast, black men made the smallest gains in job-holding during the 1990's but have experienced the biggest percentage drop after 2000, Mr. Levitan found. By 2002, the rate at which black men in the city were working had dropped sharply, returning to where it stood in the mid-1990's.
Industries, too, have been unevenly affected. The hardest hit have included some of the highest paying, like the securities industry and computer systems design. Some fields that have been spared, like education and health services, are ones with much lower average pay.
"It took a very unusual expansion in the late 1990's to bring a lot of moderate- and low-income people back to where they were at the previous peak of the business cycle in the late 1980's," said James Parrott, chief economist for the Fiscal Policy Institute, a labor-oriented research group.
"The recession has eroded their wages and income," he said. "That means they're worse off than they were before the expansion started in the early to mid-1990's. But they are not as far back as they were at the end of the last recession."
One reason it is difficult to measure how much of the gains of the 1990's have been lost is that data are not yet available, economists say. While New York State reports job numbers and unemployment rates monthly, Internal Revenue Service data on income and wages tend to lag months and even years.
The most recent I.R.S. income data are preliminary national figures from 2001 personal income tax filings, said Tom Marks, an economist with the New York State comptroller's office. Preliminary data on wages in New York State from that year are not yet available.
Nor has anyone calculated the net effect of tax cuts and increases.
"I don't think anybody has run all the numbers to say how much has been taken back," said George Sweeting, deputy director of the Independent Budget Office in New York City. As for who has lost the most, he said, "Probably five years from now, people will figure some of that out."
But the numbers that are available offer some inklings.
Using federal and state employment data, Mr. Marks calculated the number of jobs added in the city between the previous recession and the peak of the boom at the end of 2000. After subtracting the number of jobs lost since January 2001, he concluded that 45.7 percent of the job gains in the city had been eroded, compared with 31.3 percent statewide and 10.2 percent nationally.
Looking at high- and low-wage industries in the state, he found that from 1992 to 2000 there had been a gain of 35,200 jobs for securities and commodities brokers, whose average salary in 2001 was $147,867. That jump was followed by a decline of 25,400 jobs from 2000 to 2002.
"We're still ahead, but not by much," Mr. Marks said.
Advertising is another relatively high-paying field in which recent job losses wiped out much of the gains made during the 1990's, Mr. Marks found. By contrast, the number of jobs in accommodation and food services grew by 78,200 from 1992 to 2000 and shrank by just 1,500 from 2000 to 2002. But the average annual wage in that industry in 2001 was just $13,674, his data show.
"There are a lot of high-income jobs that have been lost in the current recession," said Michael Brisson, chief analyst for the state comptroller's office. "You're adding jobs at the low end of the wage scale. At the high end of the wage scale, you're losing Wall Street, professional business services, accountants, lawyers. And you've lost a lot of computer people."
Mr. Levitan of the Community Service Society has been tracking the so-called employment-population ratio, the percentage of the working-age population that is employed. From 1992 to 2000, that job-holding rate for women rose by 8.1 percentage points, to 58.4 percent. The jump for Hispanic women, 14.5 points, was the biggest, followed by the increase for black women, a 9.1 point gain.
In the two years after that, the job-holding rate for women as a whole dropped by just 1.6 percentage points, Mr. Levitan found. It dropped by 2.9 points for Hispanic women, ending up at 48.9 percent, and by 1.1 point for black women, ending up at 57.8 percent. The rate for white women in 2002 barely moved, ending up at 63.5 percent.
The gains for men in the 1990's were smaller than for women. The percentage of men holding jobs dropped in the first half of the decade and rose in the second half, ending up at 72.9 percent, roughly where it had started, in 2000. Then it dropped by 5.1 percentage points by 2002.
Black men experienced small gains and the biggest losses; the percentage of black men who were employed rose by 3.5 points in the 1990's, then dropped by 6.1 points from 2000 to 2002, ending up at 58.1.
The percentage gains of white women and men were smaller than those of other groups, but so were their losses. Throughout the expansion and the recession, whites enjoyed the highest job-holding rates of any group — 63.5 percent for women in 2002 and 73.6 percent for men.
"I would think that one reason why the increases for men were relatively modest was because there were more women looking for work," Mr. Levitan said. "When you look at the number of people coming into the city from abroad and the declines in welfare rolls and the number of people leaving the schools every year in the 1990's, we're talking about hundreds of thousands of job seekers. Well, we weren't creating hundreds of thousands of jobs."
Another measure of the magnitude of losses since 2000 is capital gains from the stock market, which accounted for a big chunk of the growth in personal income among more affluent New Yorkers in the 1990's. The plunge in capital gains in 2001 and 2002 is thought by some economists to have nearly equaled the increases of the previous five years.
An analysis of state data on capital gains done this year by the Fiscal Policy Institute shows that capital gains grew enormously during the second half of the 1990's and jumped by $15 billion in 2000 alone. Relying on state projections for 2001 and 2002, the analysis found that capital gains then dropped by $46 billion, almost equaling the total increase from the late 1990's.
"You still have almost $15 billion in capital gains in 2003," Mr. Parrott said, using the state's projection. "So, effectively, the 2003 level is back to the 1995 level."
Mr. Sweeting of the Independent Budget Office said he was unaware of anyone who had yet calculated the net effect of the tax cutting done by the city and state during the 1990's and the tax increases that have taken place since. "You can look at it impressionistically," he said. "The tax increases, at least to a certain extent, are offsetting tax reductions that occurred a few years ago. But they may be falling on different people. So the story gets kind of confusing in terms of what's being taken back from whom."
As for the recent increase in the city income tax rate for New York City's wealthiest residents, he said: "Higher income people had the largest gains in the 1990's in terms of income. But this increase in no way is equivalent to all the gains in income that the high end had."
Copyright 2003 The New York Times Company
August 9th, 2003, 09:59 PM
August 10, 2003
A Few Rays of Light Pierce New York City's Economic Fog
By JANNY SCOTT
It was sometime this summer, when New York City's budget crisis appeared to have been settled and when the plans for the World Trade Center site redevelopment were falling into place, that Rosemary Scanlon's mood about the city's economy metamorphosed quietly into something resembling hope.
The unemployment rate, though still high, had inched downward for three months in a row. Jobs were still vanishing, but the rate of loss had slowed. Real estate values remained afloat; there was infrastructure rebuilding downtown; even the hotel market seemed to have turned around somewhat.
"So on a muggy, soggy day in August, I'm relatively optimistic," Ms. Scanlon, a former chief economist for the Port Authority of New York and New Jersey, said last week. "I think we're seeing enough to note that we're on the cusp of change. And the change is upward."
If that sounds like less than an unqualified vote of confidence, it is. But it goes far beyond what many economists and others were saying just six months ago. In recent weeks, there have been what some say are signs that the city's recession may finally be bottoming out.
In addition to the slip in the unemployment rate and the slowing of the job-loss rate, the stock market has taken a turn for the better, securities industry revenues are up, construction is thriving, apartment sales and commercial leasing are on the rise and tourism is doing better than some had expected.
"So there's definitely some signs that we're feeling out a bottom, let's say," said Jim Brown, a labor market analyst for the State Department of Labor. "We won't know we hit a bottom until we're looking back at it from several months down the road — at least."
There are other questions. Is this a turning point, or simply a detour — a few good months in a 30-month recession that has robbed the city of 242,000 jobs? Is the city's economy on the brink of recovery, or has the topography of New York's distress simply flattened out?
"I have to say, it's a difficult call to make," said Barbara Byrne Denham, an economist at Jones Lang LaSalle, a commercial real estate firm, and the author of a monthly newsletter on the city's economy called The New York Stat. "It really is too ambiguous for me."
Within the securities industry, which lost one of every five jobs between December 2000 and May 2003, employment is finally inching up, said Frank Fernandez, a senior vice president of the Securities Industry Association. Revenues have begun growing, profitability is up over 2002 levels and some forms of compensation have begun to rise.
"If the recovery is under way, and we believe it is, then the future of New York City is starting to brighten," he said. "These things tend to feed on themselves. As optimism starts to pick up, as all types of businesses are starting to see marginal improvements, it's a better climate and consumer spending begins to improve."
But at Chanterelle, a restaurant in TriBeCa, Karen Waltuck, who owns it with her husband, David, was unwilling to credit any economic improvement for a summer that she said has been "fabulously good." Instead, she said, Chanterelle is flourishing because the recession has deprived New Yorkers of the money to travel overseas.
"I think the economy is in absolute disarray," Ms. Waltuck said. "I really, really don't think that things are going to get better for a long time." At best, she said, the recession is hitting bottom. "People are getting used to being miserable. Out of stability comes a certain amount of confidence. But I don't see any growth happening."
There remains plenty to be gloomy about.
Although the city's seasonally adjusted unemployment rate dropped in late spring to 8.1 percent, it is still well above the state rate of 6.1 percent and the national rate of 6.4. While the current city rate is down from a high of 8.8 percent in February, it remains nearly 3 percentage points above where it was in January 2001.
Similarly, while the cascade of job losses has slowed, the city comptroller's office reported in July that after seasonal adjustment the number of public and private jobs had dropped by 9,000 in June. There were job losses in some areas of finance, manufacturing, the information sector and trade, transportation and utilities, among other fields.
City, state and federal employment is falling, said Mr. Brown, of the State Department of Labor. Manufacturing remains weak; the employment services field has flattened but is not growing. The technology industries remain in poor shape. There are continued losses in computer services. And the airline industry, after layoffs this spring, is doing little rehiring, he said.
"However Wall Street's profits turn out this year, no one's saying they're going to rehire the 40,000 to 50,000 people they got rid of any time soon," Mr. Brown said. "These various forecasts have changed a lot in a short period of time. Forecasting Wall Street profits is probably even riskier than forecasting Wall Street."
Late last month, the Federal Reserve Board reported, in a survey of economic conditions it conducts eight times a year, that retail sales improved in the New York region in June and July. In real estate, the market for downtown offices and for Manhattan co-ops and condominiums strengthened. Bankers were reporting more demand for home mortgage loans.
At the same time, the Securities Industry Association reported what it called its first meaningful increase in employment in a year, though the overall level was still below that of July 1994. The report said revenue growth had resumed and broadened. With profits recovering, compensation was rising. Further gains were expected by the end of the year.
Meanwhile, the National Association of Purchasing Management, which publishes its own monthly report on business conditions in the city, reported that while the local economy was still contracting, the rate had slowed. The report stated that the growth of financial industry profits was lifting spirits in related industries like printing, advertising and commercial real estate.
"The New York City economy may be about to take a turn for the better, especially if the financial markets continue to improve," Marc M. Goloven, a senior regional economist for J. P. Morgan Chase, was quoted as saying in the report. "While the Big Apple is much more than the Dow Jones industrial average, trends in the latter often determine the general health of the former."
Other parts of the region are doing far better than the city.
In the first half of this year, New Jersey began gaining jobs at a rapid rate. It added 39,000 jobs while the country as a whole lost 236,000, said James W. Hughes, dean of the Edward J. Bloustein School of Planning and Public Policy at Rutgers University. In the past 30 years, New Jersey's economy has grown by an average of 50,000 jobs a year; at the current rate, the gain for 2003 would be 78,000.
"Graphically, it's almost like jaws opening up, with New Jersey going up and the nation still sinking," Professor Hughes said. "It's entirely possible that New Jersey is leading the nation. Somebody's got to lead it out of the recession. That may well be New Jersey's role this time."
Similarly, when one compares monthly employment figures with monthly figures from the previous year, the Hudson Valley region of New York has had 11 consecutive months of year-over-year job gains, said Sean MacDonald, a regional economist with the State Department of Labor. The year-over-year unemployment rate has been declining for six months.
Ms. MacDonald traced the growth in part to large commercial and residential development in Westchester and Rockland Counties and to home construction in Dutchess and Orange Counties. The activity in the housing market had spawned demand for legal and accounting services, she said. Banks are opening new branches, and mortgage companies are leasing space.
In Manhattan, Jonathan Miller, president of Miller Samuel, a Manhattan residential real estate appraisal company, said sales and prices for two-bedroom apartments had increased. The inventory of available co-ops and condominiums declined slightly in April, May and June after rising almost every month for a year and a half.
Cathy Paige, the vice president and general manager for the Northeast region for Manpower Inc., a large temporary-help service, said business in New York had been "perking up a tiny bit." There has been a slight increase in orders for temporary help and in "temp to perm" — the hiring of temporary workers as permanent employees, often a harbinger of an uptick in permanent hiring.
Ms. Scanlon, now an associate professor of economics at the Real Estate Institute at New York University, said Mayor Michael R. Bloomberg's willingness to "take such a firm hand on the fiscal situation" would prove important in helping the economy recover. So would the recent progress toward rebuilding the World Trade Center site, she said.
Another economist, Christopher Jones, the director of economic programs for the Regional Plan Association, said: "I would probably put myself in the camp of cautious optimists that the city's economy has at least bottomed out. I am not optimistic that we're about to enter a period of rapid growth."
Copyright 2003 The New York Times Company
October 21st, 2003, 02:19 PM
FOR IMMEDIATE RELEASE
October 21, 2003
MAYOR MICHAEL R. BLOOMBERG DELIVERS SPEECH ON ECONOMIC DEVELOPMENT AND JOB CREATION
Investing In New York: The City Of Opportunity
Mayor Bloomberg’s prepared remarks are below:
Thank you, Bill. Good morning.
The last time we were together, December 12th of this past year, I presented our Administration’s vision for a new Lower Manhattan...for overlaying the world’s greatest financial district with a diverse and vibrant 21st century commercial and residential neighborhood.
Make no mistake about my commitment to ensuring that Lower Manhattan remains the financial center of the world.
And it’s encouraging that major firms such as Cadwalader, HIP, and Oppenheimer have signed long-term leases, affirming their commitment.
But our vision for Lower Manhattan is only one part of a larger challenge -- that of creating jobs and opportunity for all New Yorkers, in all five boroughs.
And because ABNY has always played a vital role in moving our city forward, there could be no more appropriate place to outline our strategy for meeting that challenge than here at a traditional ABNY breakfast.
In 1971, when ABNY was founded by Lew Rudin and others, the end of the “go-go” Sixties had left New York’s economy reeling.
Twenty Fortune 500 companies had fled the City, or were getting ready to leave.
Most of us in this room remember the crisis that followed. Crime soared. Garbage piled up. Block after block of apartment houses abandoned, or destroyed. The city’s infrastructure moved dangerously close to collapse. Strapped for cash, New York stopped investing in its future, and worse, stopped believing in itself. And our city’s economic competitiveness suffered for decades as a result.
Today, facing another fiscal crisis, I’m here to tell you, I have not –- and I will not -- let New York make that mistake again!
Let’s start when I came into office. Inauguration Day, January 1st, 2002 was one of the most exhilarating days of my life.
But, there was no doubt – as a city, we were still in mourning.
Smoke still rising from Ground Zero, only a few blocks away from City Hall, New York braced for a major exodus of people and businesses from the Big Apple. Even though we had allies, including leaders like President Bush, Governor Pataki, and Senators Schumer and Clinton, the “smart money” was that we would be swamped by our budget problems -- and that the gains the city had made during the 90s would become history.
Well, we’ve proved the so-called “smart money” wrong. Despite the recession, we’ve put the City’s financial house in order, by making difficult, sometimes agonizing, decisions.
New Yorkers were asked to make some very real sacrifices – and, though it certainly wasn’t easy, we did. We cut City spending by $3.3 billion. We taxed ourselves by a similar amount. And we showed the politicians that we understand there’s a cost to having great services.
Even though we may complain a little occasionally, we New Yorkers in the end have the intellect, courage and confidence to stand up and do what’s right for our children and grandchildren.
City agencies have learned to do more with less, and, by any objective measure, they have succeeded brilliantly.
We’re not out of the woods yet: We need to find productivity enhancements from our great municipal workforce, or they won’t have the pay raises we want them to have.
We still have a $2 billion deficit for Fiscal Year 2005, that to close, will require further additional, and sometimes painful, belt-tightening. We still have too high a tax burden – one we want to reduce.
But, we’ve not only managed to keep the city afloat. We’ve made New York safer; We’re running New York smarter; And we’re also making New York economically stronger.
Why the improvement in the face of adversity? Disclosure, prudence, focus!
From Day One -- despite the two worst back-to-back fiscal years in the city’s history -- our Administration has been honest with everyone about our true economic situation.
We have insisted on the responsible fiscal policy of paying as we go for the services the public wants, despite the political fallout. And we’ve been resolute in increasing the pace of investment in the future of New York.
Today, I want to focus on the investment component. We’ve pursued a bold and comprehensive strategy. And it’s producing results -- spurring growth - and, most importantly, creating jobs for all New Yorkers. And that’s so essential.
Political leaders from right and left, from Ronald Reagan to Bill Clinton, have correctly called jobs the most effective social policy. Whatever your political affiliation, that’s something we can definitely agree on – because we all recognize the fundamental importance of work.
A job – a rewarding and fulfilling job – bolsters a person’s sense of self-worth and confidence about the future. It puts families on sound footings. And it helps create what the late Senator Robert Kennedy called “communities of security, achievement and dignity.”
Can anything be more important?
Our goal then -- is to create the conditions that will generate a job for every single New Yorker who wants to work.
And our strategy for achieving that goal has three principal elements you should know about:
1) making New York a more livable city
2) making New York a more business-friendly city
3) diversifying our city’s economy.
Let me address each of those briefly in turn, and then show you some exciting examples of the jobs and economic growth that this strategy is producing right now.
First. What goes into making New York a more livable city?
It’s seeing that people who live and work here can walk the streets without fear.
It’s ensuring that there are good schools for their children.
It’s creating decent housing they can afford.
And it’s providing the kinds of parks and cultural opportunities that only New York can offer.
I’m happy to report that -- building on the accomplishments of my three predecessors, Ed Koch, David Dinkins, and Rudy Giuliani -- we’ve made extraordinary progress in meeting all these goals.
We’ve continued to keep New York the safest big city in the nation. Crime is down 6% so far this year and roughly 10% for the last two years.
Thanks to the help of Senate Majority Leader Joe Bruno and Assembly Speaker Sheldon Silver, we’ve achieved mayoral control of the school system. And that’s permitting us to completely reform public education in our city.
Using “prime the pump” public investment in communities from Park Slope to Morrisiana, our “New Housing Marketplace” program is the most ambitious affordable housing initiative in 15 years.
In a few weeks, we’ll present our first progress report -- but let me tell you now that we’re on course to meet our citywide goal of 65,000 newly built, or rehabilitated, units of affordable housing by 2008 -- near the end of my second term.
We’re also making the city more attractive and vibrant – a place people want to live, and businesses want to locate.
From Washington Heights to Staten Island’s Homeport to the new Brooklyn Bridge Park, we’re reclaiming the City’s 578 miles of waterfront -- opening it up for recreation, housing, and appropriate commercial uses.
We’re using a broad range of imaginative rezonings to foster new business districts and recreate entire neighborhoods. For example, walk the East River waterfront today in Greenpoint and Williamsburg.
Most of what you see is abandoned wharves and warehouses -- standing idly opposite the most dramatic skyline in the world. The rezoning of that area will eventually yield an elegant waterside promenade, new parks, and new apartments and townhouses.
Similar stories are being written all over the city. Within five years, the first portions of a new 2,200-acre park at Staten Island’s Fresh Kills will be open.
When it’s finished, it’ll be the biggest new city park in more than a hundred years. And the expected investment of close to a quarter-billion dollars in parks in the Bronx, will create an incredible green legacy for that borough.
In every borough, though -- our cultural life defines New York. And that’s why we’re investing City capital dollars to triple the space of the Hall of Science in Queens, and to realize the marvelous new design for the century-old Brooklyn Children’s Museum.
Next fall, we anticipate the opening of two major cultural facilities, the Museum of Modern Art and Jazz at Lincoln Center, generating jobs as well as visitors from every part of the world. And the recently opened Louie Armstrong House in Corona will also be a magnet for jazz fans.
All of these projects will undoubtedly make New York a more livable city. The second element of our strategy is to make New York more business-friendly.
Businesses need an environment that gives them the tools to be competitive in an ever more competitive world. That means providing space that meets their needs -- and a modern infrastructure that enables them to be successful -- in a city that views businesses as partners rather than as adversaries.
Last December we announced our $10 billion vision for Lower Manhattan.
Ten months later, in partnership with the Governor, and using funds provided by the Bush Administration and the Congressional delegation led by our Senators and Congressmen Rangel and Sweeney, every single element of that plan is moving forward.
From pocket parks to airport access. From new neighborhoods to tax incentives that encourage commercial development. And most importantly, with a bold and powerful plan for the World Trade Center site, We will ensure that Lower Manhattan is the first 21st Century Downtown (not to mention the only one with a store named “Century 21”).
Our Administration’s Lower Manhattan redevelopment plan is matched by our efforts to expand and enhance business districts in other parts of Manhattan, and in every borough.
That includes redeveloping the Hudson Yards area on Manhattan’s Far West Side. By making a targeted set of investments -- extending the #7 line, expanding our woefully inadequate convention center, and creating acres of new parkland and greater access to the waterfront -- we’re beginning a process that will create nearly 100,000 new jobs in construction, tourism and new businesses, large and small.
You should know that -- today, the Javits Center ranks only 18th in the nation among major exhibition halls. Cleveland and Louisville are ahead of us. Houston is bigger. Las Vegas has two convention centers that are larger. Even Rosemont, Illinois. Rosemont,Illinois?! has more space.
And we will fall even further down that list if we don’t act now. We’re not going to let that happen.
And in other parts of the city we’re also moving forward with an ambitious plan to create five million square feet of new office space in Downtown Brooklyn.
In Long Island City, we’re actively courting developers so companies will join Met Life and CitiCorp in a new central business district in Queens.
And in Flushing, we're about to present a plan to ease traffic congestion, establish new connections to the waterfront, and strengthen neighborhood businesses.
That’s just the beginning of what we mean by improving the business climate. It goes beyond specific programs.
In fact, it defines our Administration’s entire attitude toward business.
Just after I was elected, I brought together all of the economic development agencies -- Housing, Planning, Parks, Cultural Affairs, EDC, Small Business Services and Consumer Affairs -- to craft our economic development strategy.
I included a unique approach by government: insisting we actually interview business and community leaders -- our “customers” -- to understand their most pressing concerns.
This was an essential first step in making the City more accessible to business.
Another example: I had EDC reorganized so that the companies that call New York home would feel that it served them.
Want some concrete examples? Well, take what happened after the blackout.
As phone service was restored, Andy Alper and the staff at EDC called more than 500 of our leading businesses just to see if there was anything they could do to help. (Perhaps some of you were on the receiving end of those calls.)
Meanwhile, on that Friday, with power still out., there was Katherine Oliver -- the Commissioner of the Mayor’s Office of Film, Theatre and Broadcasting -- sitting at a makeshift desk – out on the sidewalk in front of her building – issuing permits so film production could continue all around town.
At the very same moment our Department of Small Business Services, led by Commissioner Rob Walsh, was also reaching out -- to the city’s 45 Business Improvement Districts in just the same way.
They also spoke to more than 300 small business owners, helping them find ways to recoup losses from the blackout.
In fact, our Administration puts a tremendous focus on encouraging small business growth. You might say -- and please pardon the pun -- we’ve got a clear eye for the small guy. There are dozens of other examples I could give you, not just during a blackout, but on every single day.
The Administration’s concentrating on small business because -- in health care, construction, food service and other fields -- that’s where the jobs are and that’s where our future is.
We’ve made it easier to form BIDs all across the city -- because BIDs have demonstrated their ability to improve conditions for neighborhood businesses. To provide information and support to new and growing businesses, we’re opening one-stop Business Solution Centers around the city.
We’re streamlining the process that for too long has kept minority - and women-owned businesses from bidding for, and winning, City contracts.
And our merger of the Department of Employment with the Department of Small Business Services has put our job training programs in the one agency that works with the small businesses that are in turn creating most of the new jobs.
The final element of our economic development/job creation strategy is: to diversify our city’s economy. We are just too dependent on Manhattan and increasingly dependent on financial services.
That’s got to change. New York has tremendous strengths in many other industries: tourism, higher education, communications, the life sciences and culture.
We’re working to reinforce those assets, to create a broad range of jobs for a diversity of New Yorkers.
Let me introduce you to some of our neighbors who are making -- and filling -- new jobs in growing industries in New York’s communities. They will show our economic development strategy at work.
I’m going to take you, right now, on a five-borough tour that will take a New York minute -- maybe two or three, by the clock. It even includes some New Yorkers who are here with us today.
Let’s start in Brooklyn. We’re creating thousands of jobs in the critical movie and TV production industry, reviving the long-neglected Brooklyn Navy Yard. How?
With $28 million in City infrastructure improvements -- built by people like construction worker Quincy Ivory Jones -- that will encourage private investment in a $150 million state-of-the-art studio.
On Staten Island, Charleston is getting a beautiful new park, senior citizen housing, and a retail center that will keep $100 million in annual sales -- and the 600 permanent jobs that go with them -- from fleeing across the Arthur Kill to New Jersey.
That means jobs for people like Mary Ellen Burtner. Why?
Because we’ve broken a 2 decade-old logjam on how to use a 120-acre tract of City-owned land on the South Shore.
In Upper Manhattan, we’re turning dilapidated piers on Harlem’s Hudson shore into a dramatic new waterfront park through a partnership with local residents, the State, and local elected officials.
That’s helping to trigger a billion-dollar, neighborhood-sensitive investment in adjacent Manhattanville by Columbia University.
And that will, in turn, generate more than 5,000 jobs for the community and the city -- jobs that people like entrepreneur Savonna McClain will create.
We’re also working to create jobs in Jamaica, Queens.
We’re committing $15 million to lure the Long Island Rail Road and Jet Blue Airways to the community. And to get the project moving, we’re also using some of the $50 million in capital funds the Port Authority has committed to Queens as part of our new airport lease agreement.
New York is one of the few major cities that doesn’t have an office hub near its airport.
But with AirTrain service coming down the track next month, we will change that. That will create jobs for people like architect Robert Gaskin.
Have we forgot the Bronx? Of course not!
We’re going ahead with the $85 million Hunts Point Fish Market project that’s adding 600 well-paying jobs for New Yorkers like Michael Driansky, and making the South Bronx the premier food distribution center in the world.
We’ve also formed a community task force to ensure that the food markets live in harmony with the neighborhood and waterfront that surround it.
You should know, it would have been easy during a fiscal crisis to delay, or cancel, this project. But that’s not our way.
Together, these projects are creating thousands of good jobs for our citizens, jobs that offer benefits and career ladders, jobs that help strengthen neighborhoods, jobs that foster self-sufficiency and dignity, and jobs that provide safe and nurturing homes for our city’s children.
Five projects. Five boroughs. Five industries. And representing the future of New York, five different, hard-working New Yorkers with ambition, aspirations and drive.All part of one strategy with one goal: Thousands of new jobs in one city.
And they’re just the tip of the iceberg. In fact, later today, I’m going to the Hub, in the Bronx. There, I’ll be joining Related Companies CEO, Steve Ross.
We’re going to sign an agreement to build a new, 140,000-square-foot retail and commercial center on a desolate City-owned site. And we’ll consolidate the Bronx operations of the City’s Department of Finance in new office space there.
But keep in mind, this five-borough tour was just a snapshot of the projects and investments we are making throughout the city. Already, the City’s capital plan has $1.5 billion dedicated to economic development projects over the next 10 years for parks and waterfront development.
for cultural institutions and neighborhood projects
for creating and enhancing central business districts
and for turning blighted City properties into community assets.
These investments will produce tens of thousands of jobs for our fellow New Yorkers.
But we will need to spend more. OK, but what's the most salient question about this investment -- and indeed our entire five-borough economic development program?
Can we afford it? The answer is yes. For one thing, we’re redirecting funds that would have been spent in other ways. We’re using $630 million that was going to subsidize a new building for the New York Stock Exchange, something currently not at the top of anyone’s priority list.
We’ve essentially ended corporate welfare as we know it, by no longer paying companies -- who wouldn’t have left anyway -- to stay in our great city.
And as to borrowing for capital projects, the master capital program we’re proposing is well within the City’s bonding capacity, and its ability to meet debt service. And it represents only a small portion of the city’s overall capital spending for items ranging from bridges to public schools. In fact, the city plans more than $6 billion in capital spending in the current fiscal year alone.
So as to coming up with the needed monies, this is an investment we can afford to make. In fact -- for reasons that go to our very character and destiny as a city – this is an investment we can’t afford not to make.
As New Yorkers, we have an obligation to take actions now that will secure our city’s special destiny.
This is an extraordinary city, and the reason we can really claim it to be “the world’s second home.”
And what distinguishes us from every other place is that we have always been – and always will be - the City of Opportunity.
From the outset, New York City has practically defined the restless, creative and dynamic spirit of American free enterprise -- the spirit that has been the greatest engine of job production in history.
Don’t forget, Robert Fulton, the son of penniless Irish immigrants, invented the steamboat here. Samuel Morse, a modestly successful painter, revolutionized communications with the telegraph.
This is where the nation’s first African-American owned newspaper was published. And where small-scale entrepreneurs gave birth to Sweet 'n' Low, and Steinway Pianos, and dozens of other companies and products we and other Americans use and enjoy every day.
And what about these four guys? They were the total workforce of a company with one office, one coffee pot and not much of anything else. (If you haven’t guessed, I’m the one with the Styrofoam coffee cup... and a little bit more hair than I do now.)
That photo was taken in 1982, after I’d had the pleasure of being fired from my Wall Street job.
So my colleagues and I decided to go out on our own, and take a gamble on an idea about computerizing financial services data. It paid off beyond our wildest dreams.
The faces in this photo are like those you’d see in many a fledgling business – or storefront – every day in this city. They don’t look like adventurers.
But that’s what makes New York City so special -- an attitude that anyone can try, and anyone can succeed. There are so many different dreams -- and dreamers -- out there.
Maybe it’s an immigrant in Flatbush who plans to start her own catering service. Or an electrician in Maspeth who wants to be an independent contractor. Or a City College student with his own wild idea about what’s going to be the next big thing.
They deserve the same chance I had -- that we’ve all had.
And they deserve a City government as bold and visionary as they are.
One that understands the need to dream big and build big, even when time are hard -- especially when times are hard. Whether it’s creating Central Park 150 years ago, constructing our remarkable subway system at the turn of the last century, or digging a third water tunnel, investing in our schools, or rebuilding Lower Manhattan. These are investments we can’t afford not to make for another critical reason -- and I want to close my remarks this morning by addressing it.
We all know that our city is still recovering from the recession.
It’s left many of our fellow New Yorkers without jobs, and, too many of them, with waning hopes.
But we are facing this moment of truth much differently from the one that spawned ABNY’s creation.
Thirty years ago, a fiscal crisis devastated this city. And what followed was a decade of lost faith and confidence in our future.
Now, compare that with two years ago. A treacherous, cowardly attack brought our city to its knees. But we did not lose faith.
We did not lose confidence. We did just the opposite.
We got to our feet. We wept for our heroes. And then we proudly rededicated ourselves to making this city the greatest on Earth—and creating a job for every single person who wants to work hard.
We’ve never lost faith.
And, after what New Yorkers have shown the world, and each other, I believe we never will.
Today, we are, indeed, a better New York.
The despairing days are gone, and we’re not going to let them come back. Ever.
We are acting now, to bring jobs, and hope, to communities throughout our city.
And we will keep doing that, so that a hundred years from now, New Yorkers will look back on us and say they passed on to us a city that was better, far better, than they found it.
In this City of Opportunity. We will not fail.
Edward Skyler / Jennifer Falk (212) 788-2958
October 21st, 2003, 03:54 PM
I'm inspired. And once again, very very very very optimistic.
October 21st, 2003, 04:27 PM
Well, we can all hope really hard that he, and NYC, can walk the walk.
November 10th, 2003, 01:57 PM
New York Daily News - http://www.nydailynews.com
Hiring revs up on Wall St.
By DANIEL DUNAIEF
DAILY NEWS BUSINESS WRITER
Monday, November 10th, 2003
Wall Street's job engine may finally have stopped backfiring - and could even be showing signs of picking up speed.
Firms like J.P. Morgan Chase, Merrill Lynch and Lehman Brothers have stanched the flow of job losses that decimated entire departments and weakened the city's economy. Now they're slowly starting to make hires.
And when the big firms add staff, so does everyone from the corner deli to the drug store.
"We did recently need to go out and back-fill two jobs that we had cut too deeply on in our previous cuts," said the director of human resources at one of the big investment banks.
Though the number of new hires at Wall Street firms has been dwarfed by the 45,000 layoffs over the last two years, current conditions do offer the first ray of hope for a city that relies on investment banking jobs to drive the economy.
Each new Wall Street job supports at least two other city jobs, including accountants, lawyers, and even deli clerks, according to a study from the New York Fed.
Depending on the company's needs, the banking firms are adding a range of staff from million-dollar managing directors to five-figure junior associates along with the support personnel to serve them - such as secretaries, computer techs and back-office clerks.
In some cases, firms are bringing back some of the big money execs they had trimmed.
Merrill Lynch, which recently said it's ending a two-year salary freeze, also rehired telecom banking veteran Victor Nesi.
Deutsche Bank added 12 senior bankers last month, including senior banker James Stynes from Morgan Stanley.
J.P. Morgan Chase, meanwhile, added former Merrill banker Karl Will to head up its technology group.
In the recent dark days of regulatory scrutiny, tech and telecom had become synonymous with the corrupt excesses of the market bubble of 2000.
With the Nasdaq plummeting 75% from March 2000 through March 2003, there wasn't much of a need for bankers who specialized in tech company IPOs.
The recent recovery in stocks, a pickup in multibillion dollar mergers and an economy spurred by tax cuts have encouraged Wall Street managers to consider adding workers, rather than continuing to fire them.
Bank of America headlined a vibrant month for corporate marriages, when it agreed to buy FleetBoston Financial for $47 billion. That deal, and numerous others, made October the busiest month for mergers since July 2001 - with $118.5 billion in corporate combinations, according to Thomson Financial.
Because a merger is among the most lucrative investment businesses, the pickup in deals means multimillion dollar fees for investment banks.
Goldman Sachs may get as much as $60 million for its role in the Bank of America deal, according to Sanford Bernstein research.
Lehman Brothers said it is currently in the market to hire several merger bankers.
To be sure, the number of new hires is still only a small fraction of the total number of layoffs in the last few years.
Indeed, through the end of September, total employment at securities firms was down 2.6% compared with a year ago, state Labor Department figures show.
Moreover, the process of cutting expensive bankers hasn't completely stopped, as Goldman Sachs continues to push out some partners and top managing directors.
Still, Wall Street experts said several firms are putting out searches for new execs, in some cases to rehire positions they chopped and in others to build their business.
"In operations and compliance, we are seeing an increase in demand," said Allen Gutterman, the CEO of New York-based Response Staffing.
Even in some areas outside investment banking, some Wall Street firms are looking to add staff.
Merrill Lynch said just last week it planned to add 650 brokers by the end of next year, and would increase that staff by 5% each year through 2006.
"Improving markets and a continued strong demand for professional advice have created an opportunity for us to renew the growth of our worldwide advisory force," said James Gorman, president of Merrill's global private client group.
Analysts said the hiring of brokers suggests that expectations for continued gains in stocks is boosting Wall Street confidence.
"On the retail side of the business, we're starting to see a return to trying to grow headcount," said Robert Sobhani, an analyst at Smith Barney. "That definitely helps."
December 4th, 2003, 11:13 AM
New York Daily News - http://www.nydailynews.com
Wall Street lifts city out of recession
By DAVID SALTONSTALL
DAILY NEWS CITY HALL BUREAU CHIEF
Thursday, December 4th, 2003
It's official: For the first time in more than two years, New York City has clawed its way out of recession.
That was the good news yesterday from city Controller William Thompson, who reported that surging profits on Wall Street and new private-sector jobs fed a tiny, .3% growth in the city's economy in the quarter ending Sept. 30.
That's the first time since December 2000 that the city's economy has posted positive growth, officials said.
"After 10 consecutive quarters of decline, the city is showing clear signs of economic recovery," Thompson said.
The bad news is that the city still lags far behind the nation, whose gross domestic product grew in the third quarter by a robust 8.2% - the largest single-quarter growth in nearly 20 years.
Because of continued attrition in the public sector, the city is still losing jobs overall, despite a gain of some 1,700 private-sector jobs from July through September. As a result, the city's unemployment rate inched up to 8.3% in the third quarter, from 8.2% the quarter before. By comparison, the national unemployment rate is 6.2%.
But the city's overall economy, while still weak, is being powered into the black by surging Wall Street profits. The booming stock market posted more than $9 billion in profits during the first six months of this year - considerably more than the $6.9 billion generated in all of last year, Thompson's office noted.
The positive economic news was cheered by the Bloomberg administration. "It's proof that all the hard work that the administration has put in to create jobs, attract business and improve the quality of life is paying off," said Bloomberg spokesman Ed Skyler.
Others were more muted, noting that outside of Wall Street, the city's economy remains fairly fragile.
"It would be even more heartening to see a broader type of growth - one that includes more jobs in more sectors," said Diana Fortuna, head of the Citizens Budget Commission. "But clearly, the city's economy is slowly coming back."
December 11th, 2003, 06:24 AM
December 11, 2003
Signs Point to End of New York City's Recession
By ERIC LIPTON
More tourists and business travelers are flying into the city. Some Wall Street firms are starting to hire again, at least modestly. City tax revenues are rising. Hotels are filling up. New restaurants are opening. Unemployment is dropping.
This string of indicators has led state, city and federal government economists to a nearly unanimous conclusion: After two and half years of contraction, the New York City economy appears to have bottomed out, and a hesitant but discernible recovery may be under way.
Few of the gains are large enough, or have been sustained long enough, for most economists to declare flatly that the city's recession is now history. But most of the indicators are pointing that way, and that, they said, is worth heralding.
"We need to see a little more data and a sustained trend," said Rae D. Rosen, senior economist and assistant vice president of the Federal Reserve Bank of New York. "But the sectors we were waiting to see turn have turned."
The numbers, to be sure, are modest. After losing 235,000 private sector jobs between January 2001 and this summer, the city gained 11,100 jobs in October and September, a bump that could be partly seasonal. The gross city product, which declined for 10 consecutive quarters, closed out the third quarter in September with a tiny 0.3 percent annualized gain, the city comptroller's office has reported.
If these trends continue, it will mean that this economic downturn was less severe, at least in terms of job losses, than the past three recessions in New York City — those of the early 1990's, the mid-1970's and the late 1960's — and shorter lived than the most recent two, according to the Federal Reserve.
Fewer private jobs were lost — 7.2 percent of the total, compared with as much as 11.3 percent in the 1970's. Further, office vacancy rates were not as high as those in the past. Meanwhile, population estimates show, the city continued to grow between 2000 and 2002, even while the economy was in decline.
Mayor Michael R. Bloomberg said these statistics demonstrated that major employers and people had not left the city in large numbers after the Sept. 11 attack, despite predictions that they would.
"Everybody said, `People are going to leave this city. They don't want to be here; it is dangerous,' " Mr. Bloomberg said in an interview this week. "That never materialized. We kept people. We assuaged people's fears. And I think they also looked and said, `Nothing is perfect.' "
Still, the downturn lingered much longer in New York than it did in the rest of the nation — and the city's job losses were more severe — something that economists attribute to the impact of the Sept. 11 attack. Further, the rest of the country has not only emerged from the slump that started in March 2001, it has surged ahead.
"If not for Sept. 11, it would have been a `V,' instead of a `U,"' said Andrew M. Joseph, New York City's deputy comptroller, referring to the shape of the charts detailing the city's economic health.
Only the city comptroller, William C. Thompson Jr., has outright declared the recession over. But there are hints of a turnaround throughout the city, from restaurants that are hiring more workers, to hotels that have had to turn customers away, to Wall Street firms that are talking about bonuses that could be, on average, double what they were last year.
"There is no question the restaurant market reacts to good news, and the news recently has been good," said Nick Valenti, president of Restaurant Associates, which owns a dozen restaurants in the city, including Sea Grill at Rockefeller Center and Brasserie on East 53rd Street, where sales are up between 5 percent and 7 percent this year. "Business is definitely improving."
More meals are being served in part because the city is seeing more tourists. In fact, tourism was the first major piece of the city's economy to start a comeback.
Nearly 265,000 people worked in the leisure and hospitality industry in New York City in the fall of 2000, according to city data. By October 2001, right after the attack, employment in this sector had dipped to 250,000. As of this summer, the number of people working in the industry —given a slew of new restaurants and hotels — had increased to more than 260,000. And more new restaurants are on the way.
"You are talking about not a vintage year, but the most important group of new restaurants in perhaps 25 years," said Tim Zagat, publisher of Zagat restaurant guides. "It is a vote of confidence in the market. And it is going to create an enormous amount of buzz."
The city expects to have 35.9 million visitors this year, up 2 percent from last year. Traffic through the three metropolitan area airports increased by a similarly small but notable amount since last year.
Hotel occupancy, which dipped to 71 percent in October 2001, reached 86 percent this past October, close to the number seen in October 2000, when the city economy was booming. Hotel rates, however, remain lower than they were before the recession, with an average city room going for $217 in October, compared with $268 during the same month in 2000, according to NYC & Company, the city's visitors bureau.
The increase in tourists has resulted in huge crowds at places like the Metropolitan Museum of Art, which had 444,013 visitors last month, compared with 288,678 in November 2001.
This is before the holiday season, which is turning out to be strong for tourism, and the Republican National Convention next summer. Still missing on the tourism front, however, are large numbers of international travelers, who tend to stay longer and spend more.
But one of the surest signs of a turnaround is seen on Wall Street, which shed some 35,000 jobs during the recession. The finance sector as a whole has now seen two months of hiring gains — 1,800 jobs in October and 1,400 jobs in September.
Merrill Lynch, which has cut its global work force from 72,000 to 48,000 since the recession began, announced last month that it expected to hire 650 financial advisers in 2004, at least some of whom are likely to be based in New York City. The firm also plans to spend $1 billion in the next five years to modernize its desktop computers and online systems in New York City and in other offices around the world.
A combination of reduced costs and an upsurge in trading will mean that most of the big investment banks will end the year with enormous profits. For example, J. P. Morgan Chase & Company, one of the city's biggest employers, reported $4.86 billion in net income from the first nine months of this year, 137 percent higher than in 2002.
Even if the banks are not yet hiring again — and some of the largest say they are not — the city is reaping benefits. The high profits are translating into higher tax revenues for the city, significantly easing the fiscal crunch the Bloomberg administration faced a year ago.
Last month, the mayor reported that the city expected to collect $575 million more in taxes this fiscal year, which began on July 1, than it had expected, much of which he will put toward balancing next year's budget. Personal income tax collections are up, as are business taxes and real estate taxes.
"The economy is improving faster than was anticipated by the city," said Ken Bleiwas, deputy state comptroller for New York City.
The recovery is not universal. Nor is it being felt universally. Still lagging is the media business.
"I'm not sure I believe the economists," said Richard McMullan, 38, a freelance television gaffer whose wife is an art director for a magazine. "Magazines have stopped firing people, but they haven't started hiring them back. And as far as the television industry, I haven't seen a surge in new projects."
But even in the media business, analysts are now predicting an improvement, with national advertisers expected to spend more next year, in part because of the summer Olympics and the presidential elections.
More housing — as measured by the number of residential housing permits issued — is being built in the City than at any time since 1985, according to the city's Planning Department.
Also, while 319,000 more people have moved out of the city since 2000 than moved in from elsewhere in the United States, the population grew by about 65,000 residents because of immigration and births, another healthy sign.
Despite all of these positive indicators, economists remain cautious. Unemployment in New York City is at 8.2 percent, compared with 5.2 percent at the end of the last boom in January 2001. And during the city's last downturn, New York emerged from the recession for a single quarter, then slumped back into a decline.
Few economists expect that to happen again. The city comptroller's office, for example, expects the city's economy to grow about 2.5 percent in 2004 and add about 35,000 jobs. The mayor's office has made similar projections. But there remains more than a bit of finger crossing.
"It is not like a full-blown revival, not at all," said Hans Johnson, 31, who lost his dot-com job early in the recession but is now working and has fielded other offers recently. "But for me, the barometer has risen."
Copyright 2003 The New York Times Company
January 13th, 2004, 08:07 PM
This thread hasn't been posted in for a while...How is the NYC economy doing? I have easy access to news on the national economy, but it's hard for me to find info on NYC specificly.
January 14th, 2004, 11:14 AM
Much better, so far. There is actually talk of sending a property tax rebate of $400 per owner (of houses, not apt buildings). Sure this is election politics, but who cares. Also, the tax on clothing that was enacted will be phased out soon.
Hopefully, thinks really start to pick up soon.
February 6th, 2004, 01:45 AM
February 6, 2004
Recession Seen as Gentler for New York City's Outer Boroughs
By ANDY NEWMAN
New York City's outer boroughs weathered the recent recession better than Manhattan, losing proportionately fewer jobs and seeing private-sector wages increase while Manhattan's payroll declined, according to figures released by the state's chief financial officer.
Total wages paid by private employers in the Bronx, Brooklyn, Queens and Staten Island increased by 6.1 percent from 2000 to 2002, even as they fell in Manhattan by 7.1 percent, according to the figures, which were issued by the state comptroller's office yesterday with a report on the city's economy. While Manhattan lost more than half the jobs created there during the 1990's, Queens lost only 20 percent of such jobs from 2000 to 2002 and Brooklyn lost only 5 percent.
The loss of jobs outside Manhattan, however, was offset by salary increases in the jobs that remained, the study showed. At the same time, the other boroughs saw an increase in the number of jobs with a neighborhood focus, like service, administrative and health care jobs, even as they lost employment in manufacturing and air transport.
The outer boroughs' relative strength and stability reflect the peculiar effect of the recession on New York City. Conventional wisdom holds that when the economy sinks, blue-collar neighborhoods are hit the hardest. This recession, which particularly clobbered the finance and high-tech sectors, had a disproportionate effect on Manhattan, a national center of those industries. The other boroughs could not miss what they never had.
The boroughs outside Manhattan even showed stronger growth than the generally sprawling and affluent suburban counties around the city. In Nassau, Suffolk, Westchester, Rockland, Orange and Putnam Counties, wages grew by 3.3 percent from 2000 to 2002, according to State Department of Labor statistics, about half as fast as in the outer boroughs.
The report focused in particular on Brooklyn, which the comptroller, Alan G. Hevesi, said was insulated from the contraction that occurred elsewhere in the city after the attacks of Sept. 11, 2001. Manhattan, with its financial base near the World Trade Center, and Queens, with an export-oriented economy around two airports, suffered the largest economic damage after the attacks and lost the most jobs.
"The news is pretty good,'' Mr. Hevesi said at a breakfast at Long Island University in Brooklyn yesterday. "It's not great, but considering the three years we've had, it's pretty good.''
In fact, in a case of the Brooklyn tortoise outpacing the Manhattan hare, from 1998 to 2002, private-sector wages in Brooklyn, adjusted for inflation, increased by 7.8 percent, the fastest growth in the city.
None of which is to say that the outer boroughs have rendered Manhattan an economic also-ran. From the start of the boom in 1995 through 2002, total wages paid in Manhattan jumped by 51 percent while those in the other boroughs increased only 32 percent. Manhattan employers now pay nearly four times the total wages of employers in the other four boroughs combined.
According to the report, based largely on State Department of Labor figures, the boroughs outside Manhattan lost 1 percent of their private-sector jobs from 2000 to 2002. Moreover, the average salary in the sectors that lost the most jobs was about $38,400, while the average salary in the fastest-growing sectors was only $29,800. But, due primarily to salary increases, total private-sector wages in the outer boroughs grew from $35.8 billion in 2000 to $38 billion in 2002, an increase of 6.1 percent.
Total wages in Manhattan dropped both because it lost 7.1 percent of its private-sector jobs, and because the salary difference between jobs that disappeared and jobs that were created was much greater than in the other boroughs. The average salary in the sectors that lost the most jobs in Manhattan was $85,500, while in the fastest-growing sectors it was $59,300.
As in the rest of the country, the economies of the other boroughs have shifted from manufacturing toward service. In Brooklyn, for example, the fastest growing job categories were social assistance and nursing and residential care, the latter reflecting, among other things, the graying of Brooklyn's established middle class.
For example, Sunrise Assisted Living, a company based in Virginia that runs high-priced housing for the elderly, has opened centers in Mill Basin and Sheepshead Bay, Brooklyn, since 2000. Employment at clothing stores and hardware stores has also grown, reflecting the expansion into urban markets of big national chains like Home Depot, which now has four stores in Brooklyn, said Kenneth Adams, president of the Brooklyn Chamber of Commerce.
That growth, Mr. Adams said, is likely to continue. "Brooklyn still is under-retailed,'' he said. "There's still pent-up consumer demand, and retail is going to continue to add jobs.''
One of the more surprising findings to emerge from the state labor figures was that the Bronx, widely seen as the city's most economically backward borough, actually showed the strongest growth in recent years.
Total private-sector wages paid in the Bronx grew by 8.2 percent from 2000 to 2002, the most in the city. Nearly 3 percent of all private-sector wages paid in the Bronx went to members of the New York Yankees. But even setting aside the team's payroll, which jumped to about $171 million from $107 million during that period, Bronx wages still grew by 7.3 percent.
Not only that, but the Bronx was the only borough where private-sector employment actually increased during the height of the economic downturn.
The Bronx borough president, Adolfo Carrión Jr., attributed the growth to the expansion of several colleges in recent years, including the College of New Rochelle and Mercy College. Other fast-growing sectors in the Bronx included health care, which Mr. Carrión called the borough's leading employer, and restaurants and bars.
The Bronx is even seeing growth in fields that it does not want. Waste management companies added 480 jobs in the Bronx from 2000 to 2002, at an average salary of $47,000.
"That one we're not happy with,'' Mr. Carrión said. "We want those people to work somewhere else.''
Copyright 2004 The New York Times Company
February 6th, 2004, 11:19 AM
February 6, 2004
The average salary in the sectors that lost the most jobs in Manhattan was $85,500, while in the fastest-growing sectors it was $59,300.
That's not too bad, but I'd like to see more of those $85,500 come back.
Anyway, why do you think things have been easier on the outer boroughs?
February 6th, 2004, 02:00 PM
For just what it said, high paying Wall St. and Tech jobs are almost all in Manhattan, and they got clobbered.
Also, which is why we need to develop Brooklyn, Queens, etc., when cutting office space, they'll cut Manhattan first since it's much more expensive (I think).
February 28th, 2004, 08:00 PM
So, any new news on the economy?
And where do you guys get all this info? I have a hard time finding anything concerning NYC's economy.
May 3rd, 2004, 05:43 AM
May 3, 2004
For New York, Economic News Is Good at Last
By RANDAL C. ARCHIBOLD
By any number of measures, from Broadway ticket sales to new hiring at banks, economists say that New York's economy is rebounding. And while they hesitate to call it a boom, they do predict more prosperous times for at least the next year.
The new economic vitality is showing up in all kinds of ways: rising profits on Wall Street, higher than expected bridge and tunnel toll receipts, busier restaurants, even a run on high-end shampoo.
So if Mayor Michael R. Bloomberg was a little late last week when he pronounced New York's nearly three-year-old recession officially dead or at least on the wane, he ran into little disagreement.
"The city economy is truly springing into spring," said Marc Goloven, senior regional economist for J. P. Morgan Chase and the author of a monthly newsletter on the city economy.
Since last fall most economists have been predicting the end of the city's recession, but in a number of reports issued in the past weeks, they have seen their forecasts borne out. While some experts see the recovery as fragile - job creation over all has been anemic, and unemployment remains much higher than in the rest of the country - most say they expect it to continue for the near future.
"Once it's started, it's like the Queen Mary," said Rae D. Rosen, an economist with the Federal Reserve Bank in New York. "It tends to keep going for a couple years."
Like an ocean liner trying to reverse course, the city economy has waited a long time for this turnaround. Although the nation's recession ended, by most estimates, in late 2001, the city's dragged on for another two years, largely because of the lingering fallout of the 9/11 attacks, said John Tepper Marlin, chief economist for the New York City comptroller's office. He and other experts said they believe New York's recession finally expired in the last quarter of 2003.
Wall Street, which drives the city's economy to a large degree, has led the way to recovery, with profits rebounding last year to $16.8 billion, the highest total since 2000, when profits hit $21 billion. Banks are also planning to hire hundreds of workers this year, job recruiters say.
That is important, Ms. Rosen said, because workers in finance spend heavily, so that for every job created on Wall Street, two are created elsewhere.
As in every New York recovery, though, the big question is whether that new money is coursing into the cash registers and wallets of other New Yorkers. And the answer is a qualified yes. A variety of other measures are showing gains, though not all of them are strong, and the overall city economy has not returned to the robust levels of 2000.
The city's economy grew 2.9 percent in the last quarter of 2003, its highest growth rate since the second quarter of 2000, according to the city comptroller.
Tourists from elsewhere in the United States are flocking back - an estimated 36.5 million leisure travelers last year, edging past the record 36.4 million in 1999. But the number of tourists from other countries has declined in the past few years to 4.8 million last year from 6.8 million in 2000. The increase in travel is filling hotels. Occupancy rates rose to 76 percent last year from 73 percent in 2001, with preliminary figures for March showing the rate as high as 85 percent.
Gross ticket sales on Broadway climbed to $721 million in 2002-03 from $666 million in 2000-01.
The Metropolitan Transportation Authority reports that toll revenue in 2003 was $1 billion, about $5.2 million more than expected. By contrast, 2002 revenue was $933 million, about $500,000 less than expected.
The recovery's ripple effect has even reached into stores like Ricky's, a chain that sells wigs, makeup, exotic shampoos and costumes. Although bad weather in January and February has dampened sales somewhat this year, they increased last year by 5 percent, with clear signs that people are in the mood for pampering.
"We are seeing the beauty-supply end doing well," said Todd Kenig, who owns the chain with his brother, Ricky. "Shampoos, bath products - we sell high-end shampoo, higher-end hair care. They are doing great for us."
Restaurants, too, have seen business pick up, particularly in the past several months. Chuck Hunt, executive vice president of the New York State Restaurant Association, said a variety of restaurateurs have reported better business, though tavern owners still complain that the city's antismoking law has hurt them.
"I think we are headed toward regaining pre-9/11 numbers," said Randy Garutti, general manager of Union Square Cafe, who estimates his business is up about 10 percent this year.
Recruiters for banking firms said business has rebounded considerably after a three-year drought. "There is definitely a surge," said Helene Crocitto, executive vice president at Filcro Financial Staffing, a Manhattan recruiting firm. "A lot of companies that consolidated in the past now have a better handle and are now starting to hire again."
Many jobs, she said, are at the executive level, " a key sign that things are turning around."
Economists, however, are closely watching for signs of broader improvement in the job market. The city's unemployment rate, which tends to lag behind other indicators, fell to 7.9 percent in March, from 8 percent in February. The national rate was 5.7 percent.
Joblessness was highest in the Bronx, with a 10.5 percent unemployment rate, and lowest in Queens, with a 6.9 percent rate.
Adolfo Carrión Jr., the Bronx borough president, said the borough, the city's poorest, has traditionally lagged behind the rest of the city in employment, but predicted that a number of economic development projects, including the renovation of the Bronx Terminal Market, would improve the outlook there.
The city gained 700 private-sector jobs in March, bringing the total to 2,988,600, seasonally adjusted, according to the city comptroller's office analysis of federal labor statistics. That net job growth came mainly from the information industry and professional and business services, but it was not enough to offset job losses in several other areas, including construction, education and health services, and transportation and utilities.
"We see the recovery as fragile," said Mr. Marlin, the city comptroller's chief economist. "It is not affecting all sectors of the economy or the city."
Mayor Bloomberg, who is typically cautious when discussing the city's finances, last week presented a proposed budget of $46.9 billion, brimming with a projected surplus of $1.3 billion, a reversal from the deficits and dire warnings of mass layoffs he spoke of a year ago.
The good fortune came by way of $791 million more in tax revenue for the fiscal year that ends in June than had been anticipated in January - resulting from a healthier Wall Street, an increase in the property tax and a booming real estate market. But the good times may be short-lived, as Mr. Bloomberg predicts a $3.8 billion deficit for the fiscal year beginning July 2005. Indeed, if the recovery softens or reverses over time, the city could once again plunge into economic distress, economists said.
Copyright 2004 The New York Times Company
June 29th, 2004, 10:52 PM
June 30, 2004
Study Confirms 9/11 Impact On New York City Economy
By LYDIA POLGREEN
The World Trade Center attack on Sept. 11, 2001, cost the city's economy 143,000 jobs a month and $2.8 billion in lost wages in the subsequent three months, a far greater impact than could be attributed to the recession that had begun earlier that year, according to a study to be published today by the federal Bureau of Labor Statistics.
The report, which is the first economic analysis of the attack to use actual federal job data reported by employers rather than surveys or samples, in many ways confirms what was already known: that the attack had an immediate, devastating effect on the economy.
The report starkly shows that the attack plunged New York into a deep recession independent of the economic downturn already gripping the city, with the deepest impact on the high-paying jobs in industries that drive the local economy.
Nearly 70 percent of the jobs lost and 86 percent of the wages lost were in fields like finance, insurance and banking.
"The effect was centered on the jobs that make New York's economy unique," said Michael L. Dolfman, regional commissioner of the Bureau of Labor Statistics and author of the report. "We lost the high-paying jobs, the people who pay more real estate taxes, higher sales taxes and support various elements of the economy."
While the city's economy was already in decline, that downturn could not account for the huge job losses immediately after the attack, according to the study, which is to be posted today at the Web site of the Bureau of Labor Statistics, bls.gov, and published in The Monthly Labor Review.
Economists and business leaders said the findings highlighted the special vulnerability of the city's economy to sudden shocks, because it is so dominated by a single industry.
Kathryn S. Wylde, president and chief executive of the Partnership for New York City, said the report was compelling evidence that the state and federal government must treat New York's security and infrastructure needs differently."We need to be sure we are getting our share of homeland security money and ensuring employers and visitors that New York is secure and protected," Ms. Wylde said.
Though employment in New York has remained basically flat over the last 30 years, wages have risen sharply as the mix of jobs has radically changed. Manufacturing, once the employer of a large middle class, has shriveled, while professional fields have grown. As New York evolved into the capital of an increasingly global economy, the average wage of city workers in what the report calls the "export economy" rose to about $100,000.
As a result, the city's economy has come to be defined by a relative handful of very high-wage jobs, Mr. Dolfman said, and as those jobs go, so does the rest of the city. In Manhattan, the hardest-hit borough, about a third of the total jobs lost were in finance, and they accounted for more than 55 percent of the wages, the study showed. Tourism-related businesses were hit second-hardest.
Queens, too, saw a sharp job loss - about 15,000 jobs a month in the three months after the terrorist attack. Losses were heaviest at Kennedy and La Guardia Airports, with air transportation accounting for more than 60 percent of the jobs lost and nearly 80 percent of the wages. The impact on the other boroughs was noticeable, but not nearly as pronounced, the study found.
Manhattan's borough president, C. Virginia Fields, said the report illustrated the importance of diversifying the economy with other, more stable industries.
"When Wall Street is down, everything dies in New York," Ms. Fields said. "We have not done enough to keep and expand jobs in other areas."
Copyright 2004 The New York Times Company
July 1st, 2004, 08:58 AM
That graph looks a bit off there. It looks like we were in an accelerating loss before 9-11 (not a strait line as depicted), but, at the same time, it looks like it was starting to round out.
9-11 gave us a huge chunk of lost jobs, that followed a delayed exponential decay curve as people have gotten back to their "normal" lives.
But just like any other injury, I think we will always have the scar it left.
July 5th, 2004, 05:36 AM
9/11 and the New York City economy: A borough-by-borough analysis (http://www.gothamgazette.com/rebuilding_nyc/bls_study.pdf)
October 1st, 2004, 07:42 AM
New index developed to measure Downtown economy
By Divya Watal
The economy of Lower Manhattan is slowly healing from its post-September 11 wounds, according to a new economic index for Downtown.
Pace Downtown Index, developed in July 2004 by Pace University’s Center for Downtown New York, measures the state of business activity in the Downtown area. In one comprehensive number, the index the effect of economic revitalization in the past month.
“It’s a substantial tool for showing how we’re doing economically,” said Daniel Slippen, director of the Downtwon center.
The index is the first post-September 11 indicator to track economic activity in Lower Manhattan.
Slippen developed it along with three professors and analysts at Pace University—Joseph Morreale, Farrokh Hormozi, and David Pearlman. They used four variables to calculate the statistic, two from financial markets and two from the real estate market. Specifically, they used Standard & Poor’s 500 index, the federal funds rate, the gross Lower Manhattan product, and real estate vacancy rates.
“Any index is a collection of variables,” explained Hormozi, professor of economics and political science at Pace. “Accurate data is very important to develop a good index. For a local area like Lower Manhattan, such data does not exist. So, we have to synthesize the situation. The four variables we selected have a psychological impact on people in this area.”
“When the S & P goes up, people feel good,” said Hormozi. “And when they feel good, they go out to dinner at restaurants. They drink at bars. They buy clothes at stores. The psychological effect is built into the index.”
The S & P 500 is particularly important for Downtown since the financial services industry is concentrated on Wall St. Hormozi said he placed greater weight on the financial variables because the index is for Lower Manhattan. Had they made a similar model for Midtown, they would have used lower weights or replaced the variables with more appropriate ones, such as hotel occupancy rates, Hormozi said.
The index takes 1996 as the base year and places it at the 100 level. In 1996, the Lower Manhattan area was beginning to recover from a slump in the real estate market. Over the next four years, financial markets accelerated, reaching a climax in 2000, registering a high of 111.68 for November 2000.
After September 11, 2001, economic activity plummeted, and the index declined that reaches to its lowest point of 95.43 in February 2003. Since then, the growth rate has gradually crept up the ladder. The latest P.D.I. statistic for August 2004 is 97.36.
How long will it take for Lower Manhattan to reach pre-September 11 levels?
“We should reach 100 by next summer,” said Hormozi. “Everything’s moving in the right direction. There’s a lot of activity in the downtown area, and our evaluation is that growth will be continuous.”
P.D.I. is updated on the third Thursday of each month at Pace University’s Web site, www.pace.edu/paceindex, as well as at www.LowerManhattan.info.
Downtown Express is published by
Community Media LLC.
October 3rd, 2004, 06:00 PM
The New York Times
Fast Growth, but Wall St. Lags Behind
By LYDIA POLGREEN
Published: October 3, 2004
IF there was any doubt about the recovery of New York's economy from the deep doldrums caused by 9/11 and the collapse of the financial markets, it has disappeared in the last few months. The city has actually outpaced the nation in job growth, something that almost never happens. But other indicators, from Wall Street profits to the inflation rate, may hint at trouble ahead.
"Private sector job growth for New York City is ahead of the national rate," said Barbara Byrne Denham, an economist at the real estate firm Jones Lang LaSalle who writes a monthly newsletter about the city economy. "There is a lot of good news in the data. Almost every industry is adding jobs, and almost no industry is losing jobs."
Yet several indicators — including the dip in Wall Street profits, inflation as measured by the Consumer Price Index at an annual rate of 3.3 percent and an unemployment rate that has fallen but is still high at 6.7 percent — have led some economists to be cautious about the breadth and robustness of the recovery.
"We are encouraged by the strength of the city's economy in the first half of the year," said Adam M. Blumenthal, first deputy comptroller, speaking recently as the comptroller issued a less-than-rosy assessment of the city's second-quarter economic performance. "But the signs are not unalloyed positives when you look into the future."
Although job growth has been robust, much of the tourism industry has rebounded to pre-9/11 levels, real estate has continued its upward surge and incomes are still rising, there are worrying signs on the horizon.
Surging profit growth in the first quarter on Wall Street, New York's dominant industry, fizzled in the second quarter, shrinking by more than 60 percent. Unlike virtually every other sector, finance has not added jobs, which is particularly troubling, Mr. Blumenthal said, because every 1,000 jobs in finance support 3,000 jobs in other sectors, from retail to hospitality to real estate.
"I don't think there is any evidence that this is a robust and diversified recovery," Mr. Blumenthal said.
Overall job growth, a good indicator of economic health, has been steady and relatively strong in New York City and even stronger in much of the region. This has led some economists to conclude that New York has not only emerged from its long recession but is also rebounding modestly — notwithstanding shrinking Wall Street profits and other negatives.
Jason Bram, an economist who tracks the local economy at the Federal Reserve Bank of New York, said that the city's current job growth was both unusual and a good sign that the city is on the right track.
"If you look historically back 20 to 30 years, you'll find over time typically New York City, because it is such an established, mature economy, has employment growth a point or so below the nation," Mr. Bram said. "Now job growth is pretty much on par with the nation. What that suggests is that we are doing better than expected. Over the past few months, national growth has been relatively weak, but New York City has done relatively well."
The regional economy is also doing well, he said, with some areas, like New Jersey, outpacing the rest in job growth.
"Northern New Jersey is over all doing better than New York City, and Jersey City jobs are up almost 3 percent from a year ago," far exceeding the city rate of a 1.2 percent job growth over the same period, Mr. Bram said.
Central New Jersey's job count is up 2.4 percent, he said, and the far northern New York suburbs, including Dutchess County in the Hudson Valley, has seen job growth close to 2 percent over the last year. Long Island is keeping pace with the city's job growth, Mr. Bram said.
The lack of job growth in finance is worrisome, he said, but can be viewed as a positive sign that the city's fortunes are not entirely dependent on Wall Street.
"The city is coming back without any growth in Wall Street jobs," Mr. Bram said. "That is very unusual. If you look at the glass as half full, we can say that the city economy has diversified because we usually need Wall Street to carry us; we don't have Wall Street in terms of jobs right now, and we are still growing. On the other hand, maybe this growth won't be sustainable because we have never had rip-roaring expansion without Wall Street."
Mr. Blumenthal said that Wall Street would remain the driving force of the city economy, and said lack of growth there would limit the expansion of jobs in other sectors that depend on it, like legal and office services, publishing and hospitality.
"Nothing is going to replace financial services as driver," Mr. Blumenthal said. "It flickers though the whole economy."
Since 9/11, many companies have tried to move staff members outside Lower Manhattan to make their businesses less vulnerable to an attack. That has had tough consequences for Lower Manhattan, where rents remain $20 a square foot lower than in the rest of the city.
But major job growth like the 1990's tech boom is most likely to come only with efforts to attract a new industry to replace the thousands of jobs that vanished when the dot.com bubble burst. A biotechnology sector, drawing on the skills of the many medical centers in New York, is one possible source of jobs, Mr. Blumenthal said.
"In the short run, we are tied to Wall Street," he said. "Diversity in the economic base in the long run is the best way to counter what is ultimately going to be the effort by some firms to diversify jobs outside of downtown and the city."
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