The town of the talk A survey of New York February 19th 2005
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The town of the talk Also in this section
Bridging the gap The next cool places to live. Page 3
After the fall What September 11th did, and what it didn’t. Page 4
Under new management On balance, the mayor’s political liabilities are assets for the city. Page 6
Graduating Harpo The politics of education. Page 7
Whitman’s paradox New York is here to stay; New Yorkers aren’t. Page 9 After the twin-tower nightmare, New York is back on form, says Anthony Gottlieb
ANDER into Avenue Q at Broad- New Yorkers is easily summed up. They Wway’s Golden Theatre and you can saved the city, and they are helping to re- see the best current incarnation of an old build its neglected neighbourhoods. In the New York favourite: a musical about the disastrous 1970s, New York lost 10% of its town that invented musicals. The show population and more or less went bank- features a group of young hopefuls who rupt. Without the in ux of some 780,000 are, for now, consigned by the city’s high foreigners in that decade, things would rents to a ctitious street in an outer bor- have been much worse. And ever since ough. If today’s twenty-somethings could then, immigration has helped New York to a ord a Broadway ticket, they would be avoid the decline that beset most of Amer- nodding appreciatively. ica’s other big old cities. Now immigrants The story is also true to life in another make up 43% of the city’s labour force, in- way, which it may not have intended. cluding over a third of its workers in - Some of the characters are people, some nance, insurance and property, over 40% are humanoid glove-puppets, and some in education, health and social services, are green or covered with hair. The real more than half in restaurants and hotels, New York is not quite as ethnically diverse 58% in construction and nearly two-thirds as that, but it is getting there. In the 1990s, in manufacturing. immigrants ooded into New York in greater numbers and from more countries Up and coming than ever before. The city’s population has When The Economist last surveyed New reached an all-time high of 8.1m, and a York, in 1983, it said the city needed to higher proportion of its people over strike more of a balance between rich 36% are foreign-born than at any time Manhattan at its core and its four partly de- since the 1920s. Los Angeles and Miami caying outer boroughs of Brooklyn, have an even larger proportion of immi- Queens, the Bronx and Staten Island. Man- grants, but New York’s are far more di- hattan is still enormously wealthy. The verse. Over half of Miami’s new arrivals residents of just 20 streets on the east side A list of sources can be found online are Cuban, and over 40% of Los Angeles’ of Central Park donated more money to www.economist.com/surveys are Mexican. In New York, the Dominican the 2004 presidential campaigns than all An audio interview with the author is at Republic provides the biggest chunk of im- but ve entire American states. But many www.economist.com/audio migrants, with a share of 13%. China comes of the most wretched neighbourhoods of next with 9%, then Jamaica with 6%. No 20 years ago in south Bronx, central A city guide to New York is at other country has more than 5%. Brooklyn and Harlem have seen a re- www.economist.com/newyork The impact of these multifarious new markable renaissance. 1 2 A survey of New York The Economist February 19th 2005
WESTCHESTER COUNTY
THE 10 km BRONX
NEW 2 Most immigrants live in the outer bor- competition can be erce. YORK La NEW Guardia oughs, two-thirds of them in Queens or One big reason why New Yorkers have COUNTY JERSEY NEW YORK STATE Brooklyn, where they build businesses been able to rescue their neighbourhoods, NASSAU COUNTY STATE MANHATTAN QUEENS and often homes. Flushing in Queens, attract people and smarten up the city is a INSET whose population is now nearly two- dramatic fall in crime, which began in the JFK thirds immigrant, is a striking example. 1990s and continues apace. Once notori- BROOKLYNKINGS COUNTY Poor and virtually all white in the early ous for its threatening streets, gra ti-cov- STATEN 1970s, the place is now Asian and ourish- ered subways, drug-addled hobos and ISLAND ing. Across the city there has been a boom general air of menace, New York today as RICHMOND in housing construction. From the start of its businessman-mayor, Michael Bloom- COUNTY ATLANTIC OCEAN 2000 to July 2004, permits for about berg, rightly never tires of saying is the New York City 85,000 new units were issued, almost as safest big city in America. Now that New many as in the whole of the 1990s. And Yorkers are comfortable lolling on the side- nearly half of all new housing in the past walks, eating outside and moving around HARLEM MORNINGSIDE seven years is reckoned to be occupied by the city, the trend is self-reinforcing. They HEIGHTS E. 116th ST. immigrants or their children. have reclaimed their streets. RANDALLS E. 110th ST. & WARDS
New York is once more where the LEXINGTON AVE. MADISON AVE. young want to go, whether it is to take up a Street smarts W. 106th ST. ISLAND high-paying job on Wall Street, to study, or Rudy Giuliani, who was mayor in 1994- to vegetate on Avenue Q whilst guring 2001, is usually given the credit for trans- W. 96th ST. out which of the city’s opportunities to forming the city with his introduction of MANHATTAN aim for. New York University is now the zero-tolerance policing. He did indeed W. 86th ST. UPPER most popular in America, according to a demonstrate that crime can be driven Central EAST SIDE survey of college hopefuls by the Princeton down and kept down. He showed that the UPPER Park E. 79th ST. Review in 2004. Its number of applicants city was manageable, which was a great WEST SIDE for undergraduate courses more than dou- legacy to leave. But the conquest of crime W. 72nd ST. PARK AVE. 2nd AVE. 3rd AVE. bled from 1995 to 2004. More graduates did not happen quite as New Yorkers think 1st AVE. from America’s top business schools go to they remember it. The virtuous cycle was New York than to any other city. For the started when David Dinkins, a black for- ROOSEVELT ISLAND less well-heeled, a little creativity may be mer mayor who is now rarely credited 1 E. 59th ST. W. 57th ST. Queensboro 8th AVE. required to pay the rent. At a subway stop with anything, raised taxes to hire thou- 7th AVE. Bridge CLINTON 2 MIDTOWN on 57th Street, a student busker plays the sands more police in 1990-93 and crime be- MIDTOWN 6th AVE. 5th AVE. EAST Godfather theme with her saxophone gan to drop. And it was Mr Dinkins’s police WESTTHEATER DISTRICT 3 QUEENS 4 6 Queens- held sideways like a ute, to accommodate commissioner, Ray Kelly now back in the W. 42nd ST. BROADWAY 5 Midtown a well-twirled hula-hoop. The e ect is a job again under Mr Bloomberg who be- 12th AVE. GARMENTGARMENT MURRAY Tunnel DISTRICTDISTRICT HILL pleasing vibrato. gan the campaign to stamp out wind- E. 34th ST. E
11th AVE. 10th AVE. 8 9th AVE. 7 a The city is bubbling with more conven- screen-washing squeegee men and s tional attractions, too. After a renovation other minor annoyances before they t R E. 23rd ST. i project that cost $858m, the Museum of turned into something nastier. It helped, v CHELSEAFLATIRON Modern Art unveiled its new building in too, that the city’s crack-cocaine epidemic GRAMERCYGRAMERCY e PARK r November. It hiked its admission charge was ending anyway in 1991. E 14th ST. from $12 to $20 but is packed. A couple of From the late 1960s to the early 1980s, GREENWICH VILLAGE weeks earlier, Jazz at Lincoln Centre lms showed the world that New York was WEST VILLAGE EAST VILLAGE H opened its concert spaces, run by Wynton steeped in sleaze and violence. The image HUDSON ST. u EAST HOUSTON ST. Marsalis, a jazz trumpeter, in the angular of the city portrayed in Midnight Cow- d s SOHO LOWER EASTWILLIAMSBURG BR. twin towers of the new Time-Warner Cen- boy , The French Connection , Death o LITTLE SIDE tre (TWC) at Columbus Circle. The TWC is Wish , Taxi Driver and Fort Apache, the n CANAL ST. ITALY the headquarters of Time-Warner, but also Bronx took time to fade. But in the 1990s TRIBECA HollandR Tunnel EAST BROADWAY houses a shopping mall (the rst real one three yawningly peaceful sitcoms broad- i CHINATOWNCIVIC M v anh Bridge e CENTER attan in Manhattan, which is causing shudders), cast a very di erent picture of the city, sup- City Brooklyn r Hall some of the most expensive apartments in planting menace with safer kinds of urban 9 FINANCIAL Bridge DISTRICT New York and two restaurants where it adventure. They were tinged with just WALL ST. NY Stock would not be hard to spend $1,000 on din- enough hedonism and cynicism to attract Exchange BROOKLYN ner for two. young people without risking their par- NEW Worlds away downtown, countless ents’ disapproval. The three are Friends , JERSEY Brooklyn-Battery Tunnel cheaper joints are jumping. According to in which nothing happens, Seinfeld , in 1 km Moby, a techno musician who owns a ve- which even less happens, and Sex and getarian restaurant on the Lower East Side, the City , where plenty happens, but usu- 1. Time-Warner Centre 6. United Nations ten years ago there was nowhere in the ally to someone else. 2. Museum of Modern Art 7. Madison Square Garden area for bands to play. Now there are if Sex and the City stars four young ca- 3. Times Square 8. Empire State Building anything too many venues. With at least reer women and is ostensibly about the 4. Grand Central Station 9. Site of World Trade Centre 850 bars and clubs all over the city, the di culties of nding a man in New York. It 1 5. Chrysler Building The Economist February 19th 2005 A survey of New York 3
Bridging the gap The next cool places to live
ROPERTY values in all ve boroughs der an awning outside a restaurant in Wil- Phave grown strongly since the terrorist liamsburg last November hung a poster attacks, according to the city’s property- about a proposed waterfront develop- tax assessors. But home prices in Manhat- ment: Think your rent is high now? Wait tan are rising especially fast. At the end of until these 22 luxury high-rise towers go last year, the median price of an apart- up! On the other side of its entrance ment on the island was $670,000, over apped a poster twice as large: Le Beau- 15% higher than a year earlier and more jolais Nouveau Est Arrivé. than three times what it was in 1995, ac- Areas of Brooklyn now house many cording to Miller-Samuel, a property con- of the city’s young writers and journal- sultancy. As Manhattan’s established ists, and are in e ect becoming Manhat- areas climb out of reach, young profes- tan’s left bank. Manhattanites throng to sionals colonise and upgrade other neigh- avant-garde opera, theatre, music and cin- bourhoods. People are getting used to the ema at BAM , the Brooklyn Academy of idea of a $1m house in Harlem. Music. There are, indeed, few other places This has been the story of Manhattan in America where one can hear a Swedish for as long as anyone can remember. opera in Swedish. Some also make the pil- Now it is happening to the outer bor- grimage to galleries and performances in oughs too. Parts of Brooklyn, especially, the cobbled streets of Dumbo (Down Un- have been yielding to gentri cation, der the Manhattan Bridge Overpass), thanks to good subway links to down- which estate agents are trying to dub the town Manhattan, pretty brownstone new East Village. houses and parks. First it was Cobble Hill Bridge and tunnel used to be the (already passé: CBS plans to air a sitcom Manhattanites’ dismissive term for insuf- about thirty-somethings in Cobble Hill ciently stylish visitors to the island from this summer), then Park Slope, now Wil- further out. Now Brooklynites use the liamsburg. term too, and count themselves among The writing is literally on the wall. Un- the insiders. Well-connected Brooklyn
2 has a point. According to an analysis for grid of streets packs together not only the prescience, in 1948 he wrote: The Economist, there are 93 men to every 1.5m people who live there but also 2.4m 100 women among single New Yorkers jobs, and the lion’s share of the city’s huge A single ight of planes can quickly end aged 20-44. In the country as a whole, and number of visitors. As the capital of the na- this island fantasy, burn the towers, crumble the bridges, turn the underground passages in most other big cities, there are more tion’s media, it is the place where America into lethal chambers, cremate the millions. young single men than young single talks to itself. Most of the news networks The intimation of mortality is part of New women. What the programme mostly and late-night talk shows, the two almost- York now: in the sound of jets overhead, in shows, though, are the joys of chatting, national quality papers, the news week- the black headlines of the latest edition. shopping and going out to glamorous lies and the book publishers are here. Dis- places. The six young friends in Friends course and intercourse in the broad sense Three-and-a-half years after New are poorer and don’t have quite the right of that word are the essence and the com- York’s blackest headlines, the island fan- invitations. They hang out together, dis- parative advantage of New York. This sur- tasy is evidently far from ended. Jobs are cuss who is hanging out with whom, then vey will argue that the jobs which thrive growing (just), Wall Street bonuses are up, hang out some more. Seinfeld is about a here are those that require or exploit the in- and last year there were more visitors than self-satis ed comic who occupies himself teraction of people jammed together. before the attacks. But then the numbers by being mildly witty about the trivial Yet density brings a small risk of great killed were not the millions White envis- frustrations of urban living and his eccen- danger. New York is a strikingly healthy aged; he was thinking of nuclear bombs. tric neighbours. place to live, and was so long before Mr Leave out the passengers and crew on Bloomberg began to wage a war on smok- the aeroplanes that were own into the Volume, mass and destiny ing in 2002. Partly because there is no World Trade Centre, and about 2,600 peo- All three programmes show New York as room for many cars so New Yorkers are ple were killed in New York on September essentially one big conversation, which is highly unlikely to be killed by them, and 11th 2001. Put that tragic number in per- why they re ect and sell it so well. For this take more exercise New York has the low- spective, and you can perhaps see how it is is the town of the talk a town of irrepress- est mortality rate of all but three of Amer- possible for New York to be a powerful ible boosterism somehow combined with ica’ s 46 biggest cities. But, as the journalist magnet for talent, youth and energy once deprecating and ironic Jewish humour, of and author E.B. White pointed out long more. In 1990 there were 2,290 murders in endless argument and opining, of making ago, the highly concentrated splendour of the city; last year there were 566. Thus even deals, exchanging ideas and remaking New York also makes it a tempting target if a September 11th were to occur every lives through meetings that seem pure for any perverted dreamer with the other year, the city would by one measure chance but are inevitable given the city’s power to loose the lightning of annihila- be quite a lot safer than it would be with buzzing density. Manhattan’s con ned tion . With what now seems like chilling crime at its 1990 level and no terrorism. 7 4 A survey of New York The Economist February 19th 2005
After the fall
What September 11th did, and what it didn’t
EW YORK has had intimations of evening. By contrast, in a shorter blackout killed at $7.8 billion. Firms got $9.5 billion Nmortality before. On June 15th 1904, in July 1977, New York had erupted in an in insurance payments for interruptions to the steamship General Slocum caught re orgy of looting and burning. The police say business. The cost of replacing destroyed when taking the congregation of a Ger- the di erence is explained by better polic- buildings depends on how much gets re- man church in the Lower East Side on its ing, not by September 11th. Perhaps. But built, and there are other imponderables. annual picnic, and 1,021 people died. At conceivably 1977 was the aberration and But the intriguing question is what hap- the time, that was a higher proportion of New Yorkers have been mostly civilised pened to the city’s prospects. the city’s population than the number for quite a while. The previous big black- killed in the attacks on the World Trade out, in November 1965, was all candle-lit Incalculable Centre. Downtown Kleindeutschland dinners too. New York’s long boom of the 1990s started (little Germany), a community of around The owner of several of the city’s most to slow down in January 2001 and the city 80,000, never recovered. popular restaurants says that customers had begun to shed jobs that May. So it is September 11th was very di erent in have become more mindful of their mor- hard to disentangle the e ects of the attack several ways. As an attack on America, it tality since September 11th. They drink from those of a recession that was already shook not only New Yorkers but Ameri- more, he reckons, and are going out in gathering pace and which it intensi ed. It cans and the world. America’s wars in Af- larger groups because they want to see is clear that most of a sudden plunge in ghanistan and Iraq were direct results of it. more of their friends before the next disas- New York’s hotel, bar, restaurant and air- Families from all over the region lost some- ter strikes. But other restaurateurs nd transport jobs in October 2001 can be one, and the funerals and memorial ser- nothing of the sort. It seems that every the- blamed on the attacks. The same applies to vices went on for weeks. Many New York- ory about how September 11th changed over 17,000 jobs, mostly in nance, that ers saw and heard their skyline’s proudest New Yorkers has an equally plausible re- moved across the Hudson to New Jersey in highlight collapse. Even more smelled the buttal. Even the economic impact of the at- the following weeks (although most had shroud of dust and smoke long afterwards. tacks is uncertain. returned to New York by the new year). Ac- About a quarter of the o ce space in lower Some things can be reckoned fairly cording to an analysis of trends before Sep- Manhattan the country’s third-largest straightforwardly. The clean-up took tember 11th by the New York o ce of the business district was destroyed, and 23 around $1.5 billion, and repairing dam- Bureau of Labour Statistics, the attacks buildings damaged. aged infrastructure will cost about $3.7 bil- were responsible for around 30% of the Many more could easily have been lion. Economists at New York’s Federal Re- wages lost in New York in 2000-02. killed. About 40,000 people normally serve put the lost lifetime earnings of those A comparison of New York with1 worked in the twin towers, and around 150,000 visitors passed through the World Trade Centre complex each day. At the time the rst plane struck, at 8.46am, the o ces were not even half full. According to the National Institute of Standards and Technology, between 16,200 and 18,600 people were in the towers, and around 87% of them escaped. But every death was one too many. New Yorkers shared a wave of grief and felt connected. Just under a year later, an implausible 46% told pollsters that they personally knew someone who had been killed or hurt. As a result, folk wisdom has it, they got nicer. The idea produces a derisive snort from Ray Kelly, the police commissioner. People becoming nicer to each other is not some- thing he sees in his line of business. Less hard-bitten souls point to what happened on August 14th 2003, or rather what didn’t. On that day a power failure blacked out New York for 25 hours, and the city coped easily and peacefully. There were fewer ar- rests than on a normal mid-week August The shadow of death The Economist February 19th 2005 A survey of New York 5
from downtown for much of the past cen- jobs in the sector in 1960, but in the past tury, largely because of midtown’s big rail ten years the number has fallen by 45%. It terminals, Grand Central and Pennsylva- still has its sweatshops in Manhattan’s his- nia Station. The building of the World toric Garment District, just south of Times Trade Centre in the 1970s was an attempt Square now known as the Fashion Dis- to stem that ow, and the conversion of trict, to sound less industrial. But they are some downtown o ce space into homes dwindling. The neighbourhood is gradu- in the 1990s was a bid to compensate for it. ally following the path pioneered in the Subsidies, tax-breaks and lower costs 1960s and 1970s by SoHo, as workshops are luring some south: several midtown become studio o ces and loft apartments. law rms have taken cheap space, and The city’s service rms increasingly Morgan Stanley is planning to move about contract out what they can, to save payroll 1,400 workers from midtown to lower and occupancy costs. This plays to one of Manhattan. Downtown vacancy rates re- the city’s strengths, namely self-employ- main higher than midtown ones, and ment, because plenty of outsourced jobs rents are much lower. That is likely to be a in fact stay in New York. A programmer, headache for Larry Silverstein, a de- designer or fund manager can be red one veloper who had leased the World Trade day and be back at work for himself the Still desirable Centre from the Port Authority of New next week. Self-employment continues to York and New Jersey just before the at- grow fast in the city, and to take a bigger 2 broadly similar cities supports the idea tacks, and is now busy lling the hole. share of employment: according to the that recession harmed its workers much The Freedom Tower, an asymmetrical Commerce Department, it rose from more than did September 11th. In a study structure somewhat evoking the Statue of 554,000 in 2000 to 656,000 in 2002 (the for the Russell Sage Foundation, a New Liberty, is due to be completed on the site latest year for which gures are available). York think-tank, Cordelia Reimers of the in 2008. There is no rm interest from any The self-employed are largely left out of City University of New York found that in big tenants yet. Together with four smaller the payroll gures that make headlines. 2002 the household incomes of workers in towers on the drawing board, the develop- New York is also reckoned to have about New York declined by less than in the ment aims to provide about 10m square 400,000 undocumented ie, illegal im- other cities she examined. As for the longer feet of o ce space by 2015. The area is due migrants, many of whom, no doubt, invisi- term, another study for the Russell Sage to get a performing-arts centre, a cultural bly work for themselves. Foundation, by Andrew Haughwout of centre, a memorial site and a magni cent New York’s high costs put pressure on New York’s Federal Reserve Bank, found glass-domed transport hub. Several parks employers to move out any back o ce little evidence that the attacks made the and lots of shops may be on the way too. jobs. This is nothing new, but it is intensi- city a less desirable place to work or live. But although on the drawing board the fying. Citigroup, for example, is planning But this does not mean that nothing is o ce buildings look more fetching than to move some 1,000 employees from changing. In New York, it always is. Two the slabs of the World Trade Centre, they downtown Manhattan to New Jersey, years after the attacks, just over half the may well, like the original, be hard to ll though it says it will eventually add more larger tenants of destroyed buildings had for quite a while if indeed they all go up. high-paying jobs in the city. Higher insur- moved to midtown, about a quarter were A study for the Lower Manhattan De- ance and security costs after September back downtown and 15% had gone to New velopment Corporation in 2002 estimated 11th have increased the incentive to move Jersey. Of those who eventually returned that it would be 2022, not 2015, before the quieter jobs to greener pastures. workers to New York, some rms, such as market would support 10m square feet of Anyone who doesn’t need to be here American Express, moved back almost all new o ce space, and demand is returning should get out, says the chairman of a big of them. Others are building back-up oper- more slowly than expected. investment bank from his Manhattan of- ations in Brooklyn or outside the city, dis- Employment in nance soars and ce. This is not a premonition of more ter- persing their sta for business-continuity plummets with the markets: in the boom ror, but part of a business plan. Deal-mak- reasons ie, in case of another attack. of 1995-2000, the securities industry ers and those who need to meet clients Morgan Stanley, an investment bank that created nearly 34,000 new jobs in the city, work best where the clients and other had been the World Trade Centre’s largest then lost them all again over the next three deal-makers are, goes the theory. The rest tenant, will move around 2,000 workers years. But the long-term trend in New York should be put somewhere cheaper. upstate to a back-up centre in Harrison, 23 is down. Since 1990 about a fth of the miles (37km) from the city. Only one big city’s nance jobs have gone. Consolida- A liking for apple pie employer left the city altogether after Sep- tion in the industry, such as Bank of Amer- The idea applies as much to publishing as tember 11th: Philip Morris, which pu ed ica’s acquisition of Fleet, and J.P. Morgan to nance: the publishers are here, so the o to tobacco-friendly Virginia. But, jolted Chase’s acquisition of Bank One, tend to agents are too, and authors can t in a chat- by the attacks, rms are reconsidering cause jobs in the city to disappear, espe- show appearance and plenty of readings where their people should be, and how cially when margins are tight. as they make their rounds. Marketers, ad- many they need. New York’s manufacturing industry, vertisers and fashion designers like a large The combined e ects of September which consists largely of clothes-making and diverse test-market, and fellow souls 11th and sluggish growth have underlined and printing, continues its disappearing to swap ideas with. Lawyers, architects, ac- or accelerated job trends that were already act. The city was once the largest manufac- countants and all manner of consultants under way. Firms had been drifting north turing centre in America, with nearly 1m want to be where their clients are. A brief,1 6 A survey of New York The Economist February 19th 2005
2 a design or a report can be e-mailed from anywhere; but a handshake, a lunch and a Opposite attractions 1 look in the eye remain popular as foreplay. Jobs and pay in Manhattan and the United States, 1978=100 Employment Real wages Doctors like large populations because Manhattan United States they can nd rare and interesting diseases lurking among them. 150 150 Ask the boss of a business that could be 140 140 anywhere why it is in New York, and the answer is usually people. It is not only the 130 130 plum jobs and the kaleidoscope of enter- 120 120 tainments that bring a highly skilled and eager workforce to New York, but also the 110 110 chance to nd a di erent job if the rst one 100 100 doesn’t work out. It is all very well to argue that telecommunications will eventually 90 90 wipe out the advantages of agglomeration 1978 85 90 95 2000 1978 85 90 95 2000 and let people scatter. In practice, though, Source: Bureau of Labour Statistics when rival rms are down the street, it is easier to nd and move to the next job. burden is often cited as a reason why it grown, but average real wages have barely And when people are your main asset, does not have more jobs. New York regu- moved. Three decades ago, when there it pays to be where they want to be. Why is larly comes way down the list in studies of were more jobs in New York than there are Goldman Sachs, an investment bank, good cities in which to build businesses now, income per head in Manhattan was building a new headquarters downtown and create employment. A report by the twice the national average. By 2001 that when it has a new building, just across the Milken Institute, a think-tank in Santa multiple had risen to three times. New water in Jersey City, standing partly Monica, last November ranked the New York has captured an increasing share of empty? A $1 billion cheap loan from the York metropolitan area as 169th out of 200, high-paying jobs by continually restruc- federal government may be one answer. just ahead of Kalamazoo. turing its economy to become ever more More importantly, though, key traders re- But this neglects one central fact about productive. fused to leave Manhattan. Some New New York’s economy: that it is pretty much The city seems to be doing well at ex- Yorkers will pay a high price to stay, even if the reverse of the rest of America’s. Just ploiting the advantages of density and pro- their jobs go. About 600 of the 4,000 em- look at employment and real wages in viding opportunity. Inevitably it will ployees at the o ces in Stamford, Manhattan, where most of the city’s jobs create fewer jobs than less crowded places, Connecticut, of UBS, a big bank, reverse- are, and in the United States as a whole because its borders are xed and it has lit- commute by train from homes in New over the past quarter-century or so (see tle room. And it can hardly avoid having York even though they could save a tidy chart 1). Although the city’s employment is plenty of poverty amongst the wealth, if sum in taxes by living near their jobs. highly cyclical, the underlying level has re- only because it is so welcoming to immi- Unusually, New York levies its own in- mained much the same for decades, grants who arrive precisely because they come tax on top of a high state income tax whereas real wages have grown strongly. are poor. But none of this calls for compla- and federal tax. Its infamously high tax America is the opposite: employment has cency. It calls for good management. 7 Under new management
On balance, the mayor’s political liabilities are assets for the city
T WAS an excruciating but also a heart- own $73m election campaign and runs the campaign, and he started in January 2002 Iening sight. At a community college in place like a benign and energetic CEO. In a with a huge scal gap to ll, thanks to the the Bronx on January 11th, Mike Bloom- notoriously patronage-infested city, he terrorists’ work, the recession and an im- berg ambled awkwardly down to the has no debts to unions, property develop- prudent budget by his predecessor, Rudy stage, trying hard to remember whom to ers or party bosses. A self-made billionaire Giuliani. Mr Giuliani’s popularity had kiss, and delivered his fourth annual State several times over, he is far too rich to be soared after his handling of the September of the City address. Cramming a stream of bought. He is not interested in higher of- 11th attacks. His approval rating among achievements, statistics and plans into a ce, though he would like to be re-elected whites, already high, went up by 24 per- speech that went on for more than an in November. A fellow billionaire says Mr centage points. Among Latinos and blacks, hour, he repeatedly mangled his words. A Bloomberg needs his head examined for it roughly doubled. America’s mayor , verbatim transcript would not be pretty. taking on the job. prevented by term limits from running New York’s 108th mayor is not a natural The timing, certainly, was a challenge. again, was a hard act to follow. politician. The founder of a business-in- The attacks on the World Trade Centre Wisely, the new CEO of New York did formation and media rm, he nanced his came during Mr Bloomberg’s rst election not even try to play the usual role of larger-1 The Economist February 19th 2005 A survey of New York 7
Graduating Harpo The politics of education
OW I came to be educated, over the schools in 2002, says that turning sometimes corrupt community school Hthe years, I don’t exactly know. I around the city’s public education system boards. That opened the way for the in- only know that it didn’t happen during will take ten years. troduction of a city-wide maths and Eng- my sojourn at New York City Public The mayor has certainly been busy. lish curriculum. Eight-year-olds who are School No. 86. Thus wrote Harpo Marx, First he persuaded the state government not ready to move up to the next class are who dropped out of school at the age of to give him direct control of the school no longer automatically promoted; next eight a century ago because Irish boys system and restructured it, abolishing a school year, the same will apply to ten- kept throwing him out of the window. politicised board of education that was year-olds. A hundred new, smaller New York’s public schools still have averse to change, and 32 ine ective and schools have been opened, and 95 more problems with discipline and a high school buildings are planned. Some drop-out rate. In 2001, only 38% of pupils $60m has been raised from private do- graduated from high school in four years, nors for an academy to train school prin- compared with an average of 68% for the cipals. Bad principals have been sacked. country as a whole. Probably no more It is conceivable that some of the than one in ve emerges ready for college. 80,000 teachers employed by the city de- Perhaps that is why nearly a third of the serve the same fate, though the majority city’s public-school teachers send their do a good job in sometimes terrible con- own children to private schools, accord- ditions, with some of them buying school ing to a survey by the Thomas B. Fordham supplies out of their own pockets. But the Institute in Washington, DC. teachers’ union contract makes ring for In 2001 Mr Bloomberg put education incompetence virtually impossible. Mr at the centre of his election campaign for Klein wants the 200-page contract drasti- mayor. He promised to reform the city’s cally simpli ed, with fewer restrictive school system in e ect, to take on the work rules, and less emphasis placed on schools just as Mr Giuliani had taken on seniority rather than merit. The union crime. Bravely, he asked to be judged on and the city have been locked in pay talks his success at it. But that will not be easy, for nearly a year. With 1,350 schools and except for historians long hence. Joel 1.1m pupils in the city’s public-school sys- Klein, a former head of the Department tem, critics are bound to come up with of Justice’s antitrust division, whom Mr stories worse than Harpo’s in time for the Bloomberg brought in to take charge of Hands up those who want change next election.
2 than-life mayor. Instead, he did some mar- empty. Vast areas of the city are still ing spaces. Mr Bloomberg is particularly ket research, recruited the best brains he zoned for uses that are long gone. A key keen on the idea because he thinks it will could nd many from business, some part of the Bloomberg team’s strategy has bring more visitors to New York, and tou- from his own company and set them to been to get zoning regulations altered so rism-related jobs provide work for un- work on implementing a business plan for that homes and businesses can go up in skilled immigrants. New Yorkers are un- the city. the right places, and underused areas convinced. To get the project moving, it is One of the most noticeable early steps spring to life. Architects and planners say, being tied to New York’s bid for the 2012 was to introduce 311 a form of central- hopefully, that Mr Bloomberg’s main lega- Olympics. This is a long shot: Paris is the fa- ised customer service for the city, mod- cy to the city will be the revival of its vourite, according to London’s bookies. elled on the service that comes with the - underused waterfront. New York has had Ladbroke’s puts New York at 14:1. The nancial-data terminals which made his little long-term planning for some time. Mr venue will be decided this July. fortune. Rather than navigate dozens of Bloomberg’s biggest ideas, if they work, The stadium may fail, but at least Mr obscure city agencies, about 40,000 New will pay o mainly after he is gone. This is Bloomberg has some new ideas. A key- Yorkers a day now dial 311 to make com- true of his school reforms too (see box). stone of what used to pass for New York’s plaints or ask for information or help. At economic strategy in recent decades was the very least, they get the opportunity to On the waterfront to give large tax breaks to employers to sound o , and the city nds out what is The largest plan is for Manhattan’s last stop them leaving the city, which they of- not working. One of the loudest com- frontier, 360 dull acres bordering the Hud- ten had no intention of doing anyway. plaints, notes the mayor, is about noise. So son river from west 30th to 42nd streets. Among those who have been o ered the city’s noise laws were rewritten, This is aimed mostly at providing more of- bribes to stay have been the New York though the city council has yet to enact the ce space and homes to meet demand in Times and the New York Stock Exchange. changes. But perhaps the biggest part of the 2020s and beyond. But the proposed Mr Bloomberg has mostly stopped this the plan is barely noticeable at all, because rst step, in partnership with the Jets foot- corporate welfare , though much of it is it sounds so boring and moves so slowly. ball team, is to build a 75,000-seat sports in the hands of the state government, and When a workshop closes in the Gar- and convention centre and extend a sub- there are fat federal loans for redevelop- ment District, there will often be a ght to way line out to it. At the moment, New ment after September 11th that cannot eas- prevent the space being used for anything York has to turn away many conventions ily be used for anything else. but another clothing factory, so it stays because it does not have big enough meet- The main assets of New York’s most1 8 A survey of New York The Economist February 19th 2005
2 valuable rms are their people, and Mr by Andrew Haughwout and Nathaniel Bloomberg believes that on the whole Hilger of New York’s Federal Reserve, New those rms would not leave for cost rea- York spends three times more per resident sons unless they are failing anyway. But than the average city. In public welfare, the demand for the city’s homes is high too, so multiple is over 17 times and in education it is perhaps odd that he has not yet sought over six times. to reform the city’s property tax. The rise in A lot of this spending is out of the city’s home values has long failed to be captured direct control, being mandated by the state in tax assessments, and residential prop- government. The state’s constitution re- erty is now clearly undertaxed in relation quires aid, care and support of the to the commercial sort. needy , and the city is forbidden to cut In the past scal year, according to the education spending unless tax revenues independent Citizens’ Budget Commis- plummet. Local boundaries make this Bloomberg redraws the map sion, homes for one, two or three families tougher for New York than for other places made up half the market value of city in the state: the city’s wealthy suburbs are city’s corner against the state and federal properties, but their owners contributed in other counties and therefore beyond the governments. True, he does not kick and only 14% of the total property-tax take. reach of its taxes. scream, as New York’s mayors have often Commercial properties made up 26% of Unusually, the city is obliged to pay a been expected to do. He prefers instead to the value, but paid a 43% share of the tax. chunk of the costs of Medicaid, which pro- work behind the scenes and through the Instead of trying to make the distribution vides health care for the poor. Elsewhere courts, which may be at least as e ective. more equitable, Mr Bloomberg sent a $400 this is funded by the federal and state gov- He contributes personally to the cam- rebate to many home-owners last year to ernments, but in New York the state xes paigns of congressmen who can be useful compensate for property-tax increases at the level of bene t and the city picks up a to New York, and in May won a court rul- the beginning of his term. He plans to do quarter of the bill. Similarly, the pensions ing against the state’s governor, George Pa- the same this year. But owners of commer- and fringe bene ts of the city’s municipal taki, which forces the state to repay $500m cial properties, who paid most of the in- workforce are negotiated between unions a year of the city’s old debt. creases, get nothing back. and the state government in Albany, then It will also be said that he made the city Given its voracious appetite for public paid by the city. Predictably, the pensions more expensive and that, as a rich man, he spending, the city badly needs more reve- and bene ts are generous. is out of touch and doesn’t care. His prop- nue from somewhere. According to an All in all, according to the city’s O ce erty- and tobacco-tax increases were the analysis of 27 American cities in 2001-02 of Management and Budget, non-discre- highest ever, and he raised various fees tionary city spending is set to soar from and nes. But New Yorkers know that $16 billion in 2004 to $22 billion in 2007, times have been tough since September Squaring the circle 2 whereas spending by mayoral agencies 11th, and rivals will have to come up with 2005 budget, $m stays essentially at. The small silver lining credible alternative plans for closing the Total = $46,900 to this cloud is that it puts pressure on the city’s budget gap. Gi ord Miller, the city Income Inter-fund transfers mayor to trim what he can. Mr Bloomberg council’s young speaker, and Fernando Taxes 345 has quietly eliminated some 18,000 Ferrer, a former Bronx borough president, 26,727 Unrestricted municipal jobs, mostly by natural wastage, will stand for the Democratic nomination, state & and seems to be doing more with less. and there will be others. The Democratic federal aid State 547 primary will do much of Mr Bloomberg’s grants Fighting a Republicrat work for him as the would-be nominees 8,573 Expected state & In the election due in November, Mr tear each other apart. Federal federal aid Bloomberg will bene t not only from in- A lot can still go wrong for the mayor. grants 550 4,716 cumbency and from his own money, but Failure to win the Olympics for New York Other also from the fact that his opponents can- would make the stadium plan look mis- Miscellaneous categorical revenues grants not work out how to attack him. He is in guided. His school reforms can be shown 4,636 806 truth a fairly liberal Democrat, who ran as in a bad light, especially when the teach- a Republican merely to avoid a gruelling Expenditure Higher education ers’ union weighs in. And he has not yet 497 Democratic primary. won the city’s heart. In a Marist poll in De- Education Fire 1,130 Some will try to play the revenge card: cember, 53% of registered voters said it was 14,511 after the Republicans’ victories in the time to elect someone else, and Mr Ferrer, Debt service Human 1,711 White House and Congress last year, New who has run (unsuccessfully) for mayor resources Yorkers who are overwhelmingly Demo- 10,040 Environ- twice before and is a familiar face, looked mental crats will be invited to show their disap- set to beat him by 12 points. But that was Admin- protection proval of Mr Bush by voting out the local before campaigning began in earnest. Tele- istration 1,829 of justice Republican. The problem with this is Mr vision ads should help to show that Mr Pensions 2,146 4,813 Bloomberg’s evident lack of any Republi- Bloomberg has done more than just perse- Health 2,353 Miscellaneous can agenda. The most unpopular thing he cute smokers and lobby for a stadium. This budget All other agencies has done was to raise taxes, and he does will be money well spent. It would be a 4,779 3,091 not want to privatise anything. pity to give New York back to the politi- Source: New York Office of Management and Budget It will be said that he does not ght the cians just yet. 7 The Economist February 19th 2005 A survey of New York 9
Whitman’s paradox
New York is here to stay; New Yorkers aren’t
EW YORK’S greatest poet, Walt Whit- United Jewish Appeal Federation of New Mumford Centre at the State University of Nman, could have been talking about York, for example, which raised $203m for New York at Albany, New York has the his city when he wrote his best-known various causes last year, was set up at the highest segregation of blacks and whites lines: beginning of the 20th century when a among America’s 100 largest cities, and Do I contradict myself? group of Jews got together to aid impover- the second highest segregation of Hispanic Very well then I contradict myself, ished European immigrants. Giving a help- and non-Hispanic whites. (I am large, I contain multitudes.) ing hand up seems to have got into the The centre also found that Asians and blood of the place. Hispanics are more segregated from non- He was referring to the chaos of his Hispanic whites in New York’s schools own soul. But New York, too, is well sup- The myth of the melting pot than in any other schools in the country, plied with contradictions. Immigration and race provide the next which can hardly be a good thing in itself. Consider, rst, the puzzle that the city contradiction. New York’s proudest boast But New York’s immigrants, especially seems to be a caring socialist republic of these days is that it celebrates all cultures those who have not mastered English, cut-throat capitalists. Its vast wealth is ob- and welcomes everyone. So it does, up to a have always chosen to cluster together. vious, and comes not only from its high- point. The city’s 18,000 restaurants serve Such cocooning eases their passage into a earning workers, but also from the heirs pretty much every food eaten round the foreign world. For a recent arrival, the and heiresses, the widows of rich industri- globe, and its residents speak every lan- bene ts of segregation are obvious. alists, the celebrities and the tycoons who guage under the sun except, it sometimes O the record, quite a few people keep apartments on Park Avenue. It is fam- seems, English (particularly when it comes worry that this new wave of immigrants is ous for worshipping success, particularly to taxi drivers and deli assistants). True, not like the last and will not assimilate so if someone has achieved it on his own. Yet London, Paris and Hong Kong are increas- easily, or that it will change the city in it is also wedded to high social spending, ingly open too, but each of them has an some unde ned but undesirable way. Yet has a romantic attachment to powerful la- ethnic group that is in the majority. New that is a familiar tune. At the end of the bour unions and does not seem to believe York now has none. Yet it is pretty much 19th century, New York’s old guard said in free markets, at least when it comes to the most segregated city in America. that the city’s Jewish immigrants could not housing. Most New Yorkers rent their New Yorkers may tut about gated com- learn and would get nowhere. And not so homes, and fewer than a third of all apart- munities in California and Florida, but are very long ago they maintained that Ital- ments are let at market rents. Over 1m their doormanned apartment buildings ians could not be educated either. apartments in the city are still covered by and rigorously selective co-operative To see where some of the next high some form of rent control. boards all that di erent? According to the achievers will come from, look at Stuyve- There are perhaps three main reasons dissimilarity index used by the Lewis sant High School, one of New York’s few1 why New Yorkers have strong social con- sciences. First, New York has managed to keep an unusually high proportion of its well-o people within the city rather than farmed out to suburbs. Crammed together in a walking city, rich and poor mix in the streets and cannot avoid each other. Second, although the place is famous for business and nance, plenty of New Yorkers work in jobs that come with a built-in social conscience. Of the city’s ten biggest private-sector employers, four are hospital groups and two are universities. Nearly 40% of jobs in Brooklyn are in health, education or social services. Add in the fast-growing arts, entertainment and recreation sector, the city’s many chari- table organisations, students and social workers, and you have a city in which plenty of people are not cut-throat at all. Lastly, New York has always been a city of immigrants, with a long tradition of looking after the latest arrivals. The giant Getting their turn 10 A survey of New York The Economist February 19th 2005
mayoral election this year, he will be the American pie 3 rst Hispanic mayor of the city, and it will Love you and leave you 4 New York City population, m be said that the city’s politics now re ects Components of population change, ’000 Indigenous Foreign-born its latest arrivals. That would be true in a Natural increase Overall population sense, because he would get the votes of change 8 Net migration newly arrived Hispanics, whose numbers 7 600 are growing. But even he does not come 6 300 5 from one of New York’s new waves: the + 4 number of Puerto Ricans, like that of non- 0 Hispanic whites and native-born blacks, is – 3 300 2 declining. 600 1 0 The revolving door 900 1900 10 20 30 40 50 60 70 80 90 2000 The most telling paradox about New York is that it is much less of a magnet than its 1,200 Origins of the foreign-born population 1970-80 1980-90 1990-2000 2000, % of total boosters like to pretend. With a growing population and surging immigration, it Latin Asian would be natural to think that more peo- the point of the place. Imagine a school in American 23.9 32.0 ple choose to come to New York than which no pupil ever left, or in which the choose to leave it. Not so. For the past three graduating class was less well educated All other 0.8 decades, even in the booming 1990s, more than the incoming one. New York could African people decided to move out (see chart 4), not do its job of enrichment if it did not 3.2 and the same seems to be true today. Were welcome plenty of people with little edu- Caribbean it not for the immigrants’ high fertility, the cation and issues with English , as the European (non-Hispanic) city’s population would be shrinking current polite phrase has it, or if it did not 19.4 20.6 slightly. Thus on balance people seem to send plenty of people away. Source: New York City Department of City Planning be voting against New York with their feet, Dr Johnson famously said that when a but for it with their wombs. man is tired of London, he is tired of life. 2 public schools to select its pupils purely by People leave, and for as many reasons Whether true or not for London, the same examination. Last year it got more stu- as they come. About half of the whites and cannot be said of New York, because New dents into Harvard than any other school Asians who leave the city stay in the New York is larger than life. It is faster, busier, in America. Half its pupils are either immi- York region, moving to a greener space, a more enthralling and, for many, eventu- grants or their children, with China, Russia new job, or both. Many other Asians go to ally too exhausting. That is fortunate for and India the commonest countries of ori- the west coast. Retiring whites tend to the city, as it makes room for the next new gin. Over half of its pupils are Asian. head to Florida. Blacks whose families New Yorker ready to try his chance. Recall There is something importantly di er- moved up from the southern states in the Walt Whitman again. He sang the praises ent about today’s wave of immigration, rst half of the 20th century are now drift- of New York, My city! , as enthusiasti- though, which is its diversity. This may ing back south. Some of the many Puerto cally as anyone. Give me the streets of well mean that it integrates better, not Ricans who arrived in the 1940s and 1950s Manhattan, he wrote, O such for me! O an worse, than previous ones, because ethnic are now retiring back to the island. intense life, full to repletion and varied! alliances are harder to form. Take Domini- But to mourn the departures is to miss And then he moved to New Jersey. 7 cans, the city’s biggest group of new immi- grants. They are mostly mulatto or black, so other Hispanic groups who on census O er to readers Future surveys Reprints of this survey are available at a price of forms usually describe themselves as £2.50 plus postage and packing. Countries and regions white do not accept them as their own. A minimum order of ve copies is required. India and China March 5th Yet neither do African-Americans, because Send orders to: Turkey March 19th the Dominicans speak Spanish. The Economist Shop Australia May 7th Such fragmentation certainly makes it 15 Regent Street, London SW1Y 4LR harder for new groups to elect their own Tel +44 (0)20 7839 1937 Business, nance and economics Consumer power April 2nd politicians. That was tough enough al- Fax +44 (0)20 7839 1921 ready. The state legislature has no term e-mail: [email protected] Oil April 16th limits and ruthlessly gerrymanders its dis- International banking May 21st tricts to keep the old guard in place. But Corporate o er Higher education June 4th change is coming, if very slowly. Last Sep- For corporate orders of 500 or more and Pharmaceuticals June 18th customisation options, please contact the Rights tember Jimmy Meng, the owner of a lum- and Syndication Department on: ber company in Flushing, narrowly man- Tel +44 (0)20 7830 7000 aged to beat the incumbent, Barry Groden- Fax +44 (0)20 7830 7135 chik, in a Democratic primary, and in or e-mail: [email protected] Previous surveys and a list of forthcoming November became the rst Asian-Ameri- surveys can be found online can in New York’s state assembly. If Fer- www.economist.com/surveys nando Ferrer, a Puerto Rican, wins the