(What’s Left of) Our Economy: Green Shoots of Recovery in New York City?

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(What's Left of) Our Economy, CCP Virus, consumer spending, coronavirus, COVID 19, election 2020, healthcare, Jobs, New York City, restaurants, stimulus package, subsidized private sector, The Partnership for New York City, Wuhan virus

Since I’m a New York City native, I’m a New York City fan. (At least I think that logically follows!) Therefore, one of the most disturbing trends I’ve followed in the CCP Virus era concerns the especially serious troubles the City has suffered this year, economically as well as medically.

I still haven’t made up my mind about whether New York has been pushed by the virus into a period of long-term decline, or whether we’ll see a return to normal once the pandemic has been brought under control (insert your own definition of this goal).

Yet for the last two months, whenever the case for pessimism seems to become conclusive (see, e.g., so much of the evidence in this recent New York Times piece), an email appears in my inbox from a friend who sends me the regular updates on the City’s economy from the Partnership for New York City.

The organization, comprised of hundreds of New York’s most prominent business leaders, says it seeks to “build bridges between the leaders of global industries and government, drawing on the resources and expertise of business to help solve public challenges, create jobs and strengthen neighborhoods throughout the five boroughs.”

Whatever you think of its sincerity or effectiveness or overall objectivity, the data it regularly releases tracks with statistics I monitor from other sources, so it seems reliable to me. And some of the figures it’s presented lately have been major stunners.

For example, as early as late July, the Partnership reported, consumer spending in the City had nearly returned to 2019 levels. In late March, it had plunged to 53 percent below them. Just as unexpected – the big laggards were New York’s wealthiest boroughs, Manhattan and Brooklyn (although maybe the Manhattan results weren’t so surprising, given its dependence on business from office workers, so many of whom weren’t commuting to their offices).

According to a late-September bulletin from the Partnership, not only had New York’s private sector employment increased on month, but “the city has outpaced U.S. private sector job growth for three consecutive months.” The leader here was the healthcare sector – which RealityChek regulars know are only partly private sector jobs, given the industry’s massive dependence on government subsidies. (See, e.g., here.) But the same problem distorts the national figures, so this finding still legitimately counts as a pleasant surprise.

Even more surprising: “209 business licenses were issued in September, up 11% from 189 licenses issued in August. The number of new business licenses has increased for four consecutive months and is up 260% since May.”

Of course, this number of businesses is less-than-tiny for such a gargantuan metropolis. But any signs of entrepreneurship these days are encouraging, and support the even more encouraging possibility that the City remains a powerful magnet for individuals with talent and drive.

No one can doubt that New York still faces massive challenges going forward, especially since the onset of winter, and the growth of lockdown fatigue, means that a second virus wave may hit. Moreover, the colder the weather gets, the greater the struggles of a hugely important restaurant sector that’s been able collectively to hang on with its fingernails thanks to regulatory reforms that helped eateries expand outdoor dining since late spring.

The fiscal situation seems dire as well – unless Democrats sweep to power in next week’s national elections and approve the kind of big aid package for cities and states that Republicans have generally resisted. (The continuing deadlock over a broader relief bill, which could drag on if Republicans retain the White House and/or Senate, obviously could remain a big problem, too.)

Even then, the City will be hard-pressed going forward to fund needed services adequately without the kinds of tax increases that tend to drive taxpayers away, cuts in more controversial outlays that tend to antagonize powerful constituencies like public employee unions, or some combination of both.

For now, however, these Partnership reports have been revealing impressive resilience in the New York City economy. And it bears remembering that, over any significant period of time, so far no one has ever made any serious money betting against it.

(What’s Left of) Our Economy: Amazon’s Fishy HQ Decision

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Alexandria, Amazon, D.C., education, Long Island City, New York City, STEM workers, tech, The Partnership for New York City, Washington, {What's Left of) Our Economy

Everyone who’s followed Amazon’s highly publicized search for a second headquarters site (which wound up choosing second and third headquarters sites) knows that New York City and the Washington, D.C. suburb of Arlington, Virginia were selected because of their abundant supply of world-class tech workers. Or at least that’s what the on-line retail behemoth said.

Except a leading business group from New York – which has applauded the city’s win – has just come out with some projections completely belying this claim.

According to The Partnership for New York City, “Amazon is the first tech mega-company headquarters to locate in New York City, a breakthrough that will solidify the city’s future as a leader in the world’s fastest-growing industry.”

But in its latest quarterly Dashboard NYC, which tracks leading indicators of the city’s economic performance, The Partnership also forecast that, of the 25,000 net new jobs likely to be created directly by the new Amazon facilities in Long Island City, Queens, and the nearly 90,000 increase in the region’s payrolls that will be generated indirectly, 68 percent won’t require a high school education. In fact, 18 percent won’t even require any formal schooling. And another ten percent will be fill-able by folks with only some post-high school education.

As a result, fewer than one-third of these jobs (some 32,000) will require a bachelor’s degree of some kind. It’s true that a relevant college or graduate degree isn’t needed for success in technology (as most dramatically demonstrated by the founding of Microsoft by Harvard dropout Bill Gates, and the creation of Apple by Reed College dropout Steve Jobs). Indeed, a recent analysis of Census Bureau data reports that fully 35 percent of the country’s science, technology, engineering, and math (STEM) workforce lacks a bachelor’s degree, and that 80 percent of this subgroup have had only some college courses.

But it’s also true that far from all of the 32,000 total Amazon-created jobs that will require completing an undergraduate college education will be science and tech positions. For instance, many will certainly come in managerial or administrative positions at Amazon itself, and in all non-Amazon companies that add new hires because of Amazon, or that are created because of Amazon, that won’t require a special tech background.

I’m certainly not qualified to second-guess Amazon’s decisions. And maybe the situation in the Washington, D.C. area is significantly different (though this article indicates that it’s not – albeit not in the way you may think). What does seem clear, though, is that the company hasn’t been leveling with the rest of the country (or the world) about its new headquarters decision. And when the dissembler is the world’s second largest U.S.-based publicly traded non-government employer (behind WalMart), that should raise a question or two.