De Blasio Economics: Growth with Equity
As New York City Mayor-elect Bill de Blasio switches from campaigning to governing, he faces challenges in creating jobs and maintaining a healthy economy while keeping to his goals of reducing inequality and helping low-income New Yorkers. The public discussion so far has focused on tax increases, new social programs and redistributing income, but New York cannot prosper with redistribution as the central strategy; the city needs quality jobs fueled by the private sector. Here are three ways the de Blasio administration can pursue growth and equity together.
Link private investment to quality jobs through community benefit agreements (CBAs). Los Angeles and other cities have successfully linked quality job creation for city residents with development strategies. Led by community organizations who work closely with labor unions, L.A. has used CBAs that condition city tax incentives, zoning preferences and code changes, and infrastructure development on concrete, enforceable benefits such as first source interviewing and hiring agreements, procurement and service contracts for minority and women-owned businesses and job quality standards, including living wages. This allows CBA advocates to identify which developers will agree to these conditions, and work with them to speed up projects and provide the political support needed for their realization.
The Atlantic Yards/Barclays Center project in Brooklyn envisioned a CBA linking affordable housing with private development, and although that project has been slow to realize its goals, de Blasio was right to support the community organizations who worked with the private developer. Mayor Michael Bloomberg is hostile to CBAs, and as a result the city has no coherent policy framework for them. CBAs also allow the city to see which developers will help pursue the Mayor’s social goals, and tilt the city’s scarce development resources towards them.
Advocate for and lead regional development. New York City is the center of a globally-competitive regional economy, and we need infrastructure development and cooperation among regional governments so they all prosper. By pressing for more regional cooperation from organizations like the Port Authority, Mayor de Blasio can remind others in the region that their prosperity depends on a healthy, growing New York at the region’s core. Gov. Andrew Cuomo has emphasized regional approaches in state economic development, and New York City should work with Long Island and Westchester, coordinating regional economic initiatives plans and forming a powerful coalition to get more state and federal assistance.
Regional economic coherence is harder to achieve because of New Jersey’s “beggar-thy-neighbor” policies. Gov. Chris Christie’s wasteful tax incentives trying to induce firms to move from New York to New Jersey creates costly and unproductive competition in the region, and Christie also killed the new rail tunnel under the Hudson. These policies add no value to the region’s economy and distract public officials from more rewarding win-win options. You only have to look at the Detroit metropolitan region to see how economic warfare between a core city and its region hurts everyone.
Invest in the green economy. The first anniversary of Superstorm Sandy reminded us that climate change is here to stay, and will increasingly threaten our prosperity. The de Blasio administration should continue Mayor Bloomberg’s ambitious $30 billion sustainability investment agenda, while finding more ways to infuse equity into environmental spending and job creation. And $16 billion in federal Sandy relief grants are coming to New York in the next several years. Those funds can create jobs and businesses, and help revive neighborhoods, but they must be monitored to assure they are effectively spent.
Climate change also will induce private and public investments in the coming years, and New York can demonstrate to the world how to adapt to climate change while creating jobs, technologies, and benefits for low-income communities, the ones most often affected by environmental disaster. Other win-win environmental job strategies include expanding mass transit, retrofitting homes and buildings to save energy, protecting key infrastructure from rising sea levels, and supporting environmental entrepreneurs and socially innovative businesses to work and grow in New York, while leveraging the city’s strong base of universities, capital and smart people.
Of course, there will be battles over income redistribution, improving job quality and strengthening social programs during Mayor de Blasio’s tenure; New York’s shocking inequality exceeds that of some African developing countries. But de Blasio’s supporters must understand that economic growth, not just income redistribution, is essential for any major progress on inequality. And private sector unions and business leaders can get behind these equity and growth strategies. Mayor de Blasio has an opportunity to not only articulate a vision of equity, but to make it real with concrete economic strategies linking equity with growth and opportunity.
Rick McGahey is a professor of public policy and economics at The New School.