Friday, March 04, 2011

Is Brooklyn thriving and an economic engine? Markowitz cheerleads, but the evidence of unemployment is sobering

Brooklyn Borough President Marty Markowitz gets on his soapbox for an essay that's part of the March/April issue of City Limits, Defining Brooklyn.

The headline is Beep Says Brooklyn Is NYC's Economic Engine: "In spite of saying 'goodbye' to our treasures of yesterday, Brooklyn is thriving," writes Borough President Marty Markowitz.

(The essay is mostly adapted--self-plagiarized?--from his State of the Borough Address last month. More importantly, now that Markowitz is embarrassing himself by lying about Atlantic Yards in an attempt to help Forest City Ratner recruit Chinese investors, how much credibility does he have left?)

The evidence for his optimism?
In spite of saying "goodbye" to our treasures of yesterday–Brooklyn is thriving. The reason is simple: Brooklyn has embraced modernization without forgetting its past and become an economic engine for New York City.

Don't believe me? The proof, as they say, is in the pudding. And in this case the pudding is employment data. From June 2009 to June 2010 none of New York's boroughs were even close to Brooklyn. Brooklyn increased employment by 3.6 percent. Not only is that nearly double the next highest number in New York City, it's good enough for 2nd best of all large counties … IN THE COUNTRY. And Crain's New York Business proclaimed Brooklyn to be "at the forefront of the city's economic recovery" thanks to the 14,000 jobs Brooklyn added in 2010.
Do the math

The problem? A 3.6 percent increase in employment is a mere dent in an 11 percent unemployment rate. In other words, you don't subtract 3.6 from 11. (To reduce 11 percent to 7.4 percent would require a near 40 percent drop.)

After all, there were more than 123,000 unemployed Brooklynites at the end of last year, so 14,000 jobs, while not insignificant, is but a start.

Markowitz knows that. In his State of the Borough Address, he stated:
In fact, Crain’s New York Business, noting that Brooklyn added more than 14,000 jobs last year, proclaimed Brooklyn to be “at the forefront of the city’s economic recovery.” That’s great news, but you know what? 14,000 jobs aren’t nearly enough to meet the needs of Brooklyn. We need MORE jobs, jobs, jobs right here, right now.
It takes him longer in the City Limits article, but he acknowledges it:
This is all great news, but it's not nearly enough to meet the needs of Brooklyn. Brooklyn needs more jobs right here and right now. As far as I'm concerned, for elected officials, jobs should be "job one." That's why I'm setting aside over $1 million in capital funds and working with the New York City Economic Development Corporation to develop a "business incubator" in one of Brooklyn's economically challenged areas.
What does the BP do?

Therein lies the germ of an article I wish City Limits had done, looking carefully at the Borough President's job.

Is spending $1 million of his capital budget on a business incubator a significant allotment? After all, more than one third of his capital budget for 2009, some $24.6 million, was directed to the $64 million amphitheater planned for Asser Levy Park in Coney Island, home of his concert series.

Office space

Markowitz writes:
For years, I've been urging large companies to consider moving their back offices to Downtown Brooklyn, but I've changed my tune. Brooklyn is no longer just for back offices. Companies like El Diario, the largest Spanish language daily in the country, and UniWorld, an ad agency that wrote the book on marketing toward the African American community, have already moved their full operations from Manhattan to MetroTech.
Um, why has he changed his tune? Because the market for back offices has tanked. After all, the Downtown Brooklyn rezoning has produced condos, not jobs.

Why are smaller companies like El Diario and UniWorld moving to MetroTech? Because they got a good deal on vacant space, space likely once occupied by back-office tenants.

There's nothing wrong with adapting to a new market, but the picture is more mixed than Brooklyn's biggest cheerleader admits.

An unbalanced economic shift

A sobering article, headlined Quitting Time: A Factory's Fall, A Neighborhood's Fallout, suggests that Brooklyn may be suffering from a fundamental shift:
[Jerome] Krase, of Brooklyn College, argues that New York City has always come out of recessions well because of its versatile economy, with real estate and financial services existing alongside manufacturing. The borough still has the workers and infrastructure, he says; it is the balance between sectors that has become skewed. In a healthy local economy, when one sector weakens, others can pick up the slack. Without diversity, cities become too reliant on the employers that they have and suffer when those employers fail.

Many in the city, Krase says, did not realize soon enough what harm the departure of factories could do.

"There was this euphoria of gentrification and all these new industries that were going to develop, which just didn't happen and didn't make sense even," Krase says. "How long can you sustain an economy based on retail?"

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