De Blasio and a Bunch of Other Mayors: The Economy's Still Not So Great

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Photo Credit: noheadlights via Compfight cc
Things are still pretty bad. And they're worse in the big cities.
Mayor Bill de Blasio, along with a group of city leaders from across the country, are trying to drum up some attention for what has turned out to be a lackluster economic recovery, especially within large metropolitan areas.

After running on a populist platform last year, the mayor is stumping for economic growth and promoting a newly released study from the U.S. Conference of Mayors that, while not exactly bearing news, certainly puts the current economic situation in stark relief.

The bottom line is that the jobs gained as the country has inched out of recession are a far cry from the jobs we had before Harrah's of Wall Street blew up the world. While the country has now "recovered" the more than 8 million jobs lost in the crash, the average wage of jobs lost, according to the report, was $61,637; the jobs that replaced them, by contrast, pay only $47,171.

The report says that gap may never be closed without decisive action, particularly at the city level. Manufacturing and construction jobs, which made up a significant chunk of those that vaporized, might have been unsustainable anyway in an economy puffed up on a housing boom that proved to be a bubble. And as manufacturing continues to move offshore, a trend that's been at work for decades, they're likely not coming back without some help from government.

De Blasio laid the blame for the long-term trends squarely at the feet of the free market politicians of decades past.

"I think it was the Reagan revolution of the '80s [that drove these trends] and amplified later by Newt Gingrich," de Blasio said, according to a press conference transcript released by his office. "I think it was a series of leadership changes that brought about a set of policies that were not focused on cities. And I think it was to the peril of our cities...the changing economy is our calling card, because the economy now requires the education system to be so much stronger."

The report is mainly just a litany of really bad news, but it does very briefly offer some policy recommendations, like a heightened focus on educational initiatives in a high-tech economy that demands specialized skills. Pre-kindergarten education -- which has shown to have strongly positive effects that last throughout a student's educational career -- is cited as another priority. A signature initiative of the de Blasio administration, universal pre-kindergarten is being rolled out for the first time this year in New York City.

Investment in infrastructure also gets a nod as a worthwhile way to increase meaningful employment, but the report hedges a bit on a minimum wage hike, saying it increases prosperity but can also inhibit hiring.

While the report's projections for the future aren't entirely pessimistic -- it calls for 2.5 percent income growth in 2015, and then 3.8 percent annual growth through 2017 -- it predicts that growth will be concentrated in upper income households.

The report includes one potentially surprising fact about the New York City metro area: Inequality here is increasing at a relatively slow pace as compared to other parts of the country.

The region, which includes the five boroughs, northern New Jersey and Long Island, did see faster wealth gains at higher income levels over the past decade. But the ratio of change in New York -- a 0.8 percent shift in the mean as compared to median salary, in favor of wealthier households -- wasn't even enough to land it in the top ten in the nation. Auburn, GA, which the study ranked first for most lopsided growth, saw a shift of more than 21 percent, and nationwide the figure was 2.6 percent.

Find the rest of the report on the following page, but be warned, it's not pretty.


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1 comments
Mike
Mike

How about old school supply side economics and cut NYC personal and corporate tax. Stimulate consumption and business activity.EBITDA should flow upwards

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