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2020 Killed NYC’s Economy — We Need Leaders Who Will Help Build It Back

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2020 Killed NYC’s Economy — We Need Leaders Who Will Help Build It Back

New York Post October 21, 2020
Urban PolicyNYC

This has been a hellish economic year for Gotham. Before mid-March, New York City’s economy boasted nearly 4.1 million private-economy jobs — a record. These jobs spanned corporate law, software design, finance, real estate, manufacturing, construction, health care, retail and services. There was basically a job for everyone, from CEO to dishwasher.

Today is a different story. Shutting down entire industries for months, even for a justified reason, brings mass-scale job destruction. As of late July, New York City was missing 16 percent of its jobs, or 646,100 positions, relative to last July. After the 2008 financial crisis, by contrast, we lost 206,300 jobs.

Blame the duration of New York’s lockdowns, as well as interconnections of the city’s industries, with Manhattan as the knotted center.

The recession also has begun to slam industries that initially avoided closures. In finance and real estate, the city has lost 34,600 positions, or 7.1 percent of the total. It’s obvious that with demand for apartments down, fewer people need a real-estate broker. But banks have also shed employment, with commercial banking giving up 1,800 jobs, or 2.5 percent, relative to last July, and investment banking losing 3,100 jobs, or 6.2 percent.

The professional and business-services industry is down 110,300 jobs, or 13.7 percent, including many temporary workers. A longer-term danger in these fields is not job loss but transfers, with Manhattan’s banks and law firms considering opening satellites in New Jersey and Westchester and basing workers at the office nearest their homes, at least some of the time.

So how to begin to move forward? New York should start with what’s working — relatively speaking. A visitor to one of New York’s many neighborhoods early this fall, walking around on a pleasant evening, would see what seems to be a healthy city. Outdoor restaurant tables on The Bronx’s Arthur Avenue and in Brooklyn’s Williamsburg and in many other areas are packed, a welcome bustle that the city must build on.

Yet the bright spot of reopened restaurants won’t last without rent relief, since rent bills are piling up faster than revenue from limited-capacity indoor dining. Beyond rent measures, government can do smaller-scale things to help neighborhood businesses. For instance, state regulators could give restaurants an extra six months on expiring liquor licenses.

Quality-of-life issues are another concern. Illegal vendors populate sidewalks, crowding customers who now must wait outside small stores in order to maintain social distancing. Panhandlers and mentally disturbed people harass passersby. The city isn’t responsive.

If a homeless person is sleeping in front of a storefront, the owner can call 311. But 311, in turn, calls social services, which, accompanied by police, ask the homeless individual if he needs help. If the person says no, the site is then logged on 311 as a location where the individual has refused help — and that completes the government response. Meantime, property and business owners must clean up feces and urine.

Confronting the biggest crisis that New York has endured in at least 45 years — maybe ever — elected officials have been bizarrely sanguine about the city’s well-being. Neither Mayor de Blasio nor Gov. Cuomo seems to think much about Manhattan and the challenges of its recovery — or the repercussions for the city’s other boroughs if Manhattan doesn’t bounce back to its old self.

New York isn’t a barrel of oil: When the price goes down, demand won’t naturally go up. In the 1970s, when middle-class residents and their employers fled Manhattan, newcomers didn’t immediately take their place, renting apartments or office space at now-lower prices. Lower demand for housing in unemployment- and crime-ravaged South Bronx, Bushwick and Harlem neighborhoods resulted in destruction of the supply of apartments, via fire and neglect, not price declines that spurred higher interest.

Gotham was lucky after its previous nadir, in the 1970s. Many American cities never recovered their populations after the tribulations of that era; they still launch serial failed experiments to revive long-desolate downtown business districts.

New York’s future is uncertain, but government can do much to ensure that the world continues to choose the city as a home, office or place to visit. Gotham can protect the quality of life from Fordham Road to Eighth Avenue. The state can ensure that mass transit improves, rather than crumbles, so that riders come back. Both levels of government can mediate commercial-rent relief, coupled with property-tax relief for owners who agree to ease up on rent.

If it can reach the other side of the pandemic, New York City can live again.

This piece originally appeared at the New York Post

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Nicole Gelinas is a senior fellow at the Manhattan Institute and contributing editor at City Journal. Follow her on Twitter here. This piece was adapted from City Journal.

Photo by wdstock/iStock

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