Crains New York - January 14, 2013 - (Page 13)

AMY ROSEN AND MARIA PINELLI From foster child to entrepreneur Today Rodney is 23, has a bachelor’s degree and is pursuing dual graduate degrees at Yale.What put him on track for success? Rodney discovered the entrepreneurial spirit. At 15, he W S was introduced to an entrepreneurship program run by a nonprofit working in his school.Rodney started a video production business that showed him he could climb out of poverty and apply his schoolwork to the real world.He earned admission to Morehouse College and aims for a career in finance. In New York City, at-risk young people—like Rodney was—need our help.One in three children here lives in poverty, according to the Citizens’ Committee for Children of New York. And what hope do they have of finding a job with a living wage? Not enough. The city’s teen unemployment rate hit 35.6% last summer, according to the Employment Policies Institute. What is the secret to lifting young people out of poverty, providing them with good jobs and spurring business growth? There is none. It takes long-term vision,resources and strong public-private partnerships. Fortunately, there are nonprofits that for decades have been teaching Pay hikes would bust city budget hould city employees ever get a pay raise again? It’s not a facetious question. Neither is wondering how the city might afford any pay increase. The issue should come into focus early next month, when Mayor Michael Bloomberg presents his finan- cial plan for the 2014 fiscal year, which begins in July. On the surface, everything is copacetic.The Independent Budget Office estimates the gap in the 2014 budget at $811 million, or 1.6% of city-generated revenue.This is small by historical standards and can be dealt with relatively painlessly. One problem is that the mayor is counting on $790 million from the sale of new taxi medallions, which a judge last year ruled had been enacted illegally. If the decision is not reversed and the medallions aren’t sold, the problem doubles but remains manageable. Raises are a different story.Most city unions have been working without contracts since 2010. Teachers and the city have been at odds since 2008. The mayor says he has set aside no money for retroactive pay hikes, and budget experts agree he’s telling the truth. (New York City mayors used to hide money for such purposes.) He says any increases must be paid for with productivity gains,a theory the IBO says is politically impractical. So let’s say city workers win retroactive pay increases at the rate of inflation (3% or so).That would cost almost $4 billion in 2014. If the teachers get inflation-based hikes for the 2008-2010 period they worked without a contract, the bill would be $5 billion.The 2014 raises for teachers and all city workers would add another $1 billion. That’s a total $10 THE HIGH COST OF LABOR Impact of city worker pay hikes (in millions) 2014 Future increases at rate of inflation Retroactive 2010-12 increases Retroactive 4% teacher raises, 2008-10 TOTAL HIT Source: Citizens Budget Commission 2015 2016 $1,150 $2,787 $2,615 $3,917 $904 $904 $5,032 $2,698 $2,698 $10,099 $6,389 $6,217 GREG DAVID billion pile-on to the deficit for 2014 alone. The cost in each of the next two years would be more than $6 billion (see chart). By the way, there are other com- plications, including the unfortunate fact that the annual cost of putting money away to pay for promised pension benefits is no less than $8 billion,and the price tag for other benefits (primarily health care) will reach $4 billion next year. So there’s no way any mayor could agree to these kinds of budget hits, right? No. Every one of the four Democra- tic candidates for mayor is desperate for the endorsement of the city unions, starting with the United Federation of Teachers. It doesn’t take a genius to figure out the unions’ top priority is a contract with retroactive pay increases. No one is about to announce a deal during the mayoral campaign.It is crucial that all the candidates be confronted with the city’s fiscal realities and that they be asked to be clear about how they’d deal with retroactive pay raises for city unions. The more a candidate ducks the issue with platitudes, the more voters will know not to choose that person. January 14, 2013 | Crain’s New York Business | 13 hen Rodney Walker was 5,his parents were arrested on drug charges.He spent the next decade slogging from one foster home to another, each year falling further behind academically and socially. children from low-income communities to stay in school, recognize business opportunities and plan for the future. Ours, the Network for Teaching Entrepreneurship,has discovered that when at-risk youth are taught entrepreneurship, their street smarts can develop into academic and business smarts.With help from entrepreneur mentors, they create business plans and execute them, while gaining the motivation to continue their education and break the cycle of poverty. Rodney and thousands of others are living proof. Unfortunately, for every Rodney Walker,thousands of kids don’t benefit from this critical guidance. Schools cannot do this alone. They are too financially stretched to run quality entrepreneurship programs without outside support.That’s why it is vital that New York businesses large and small support efforts to send entrepreneurs into the classroom and mentor kids. Amy Rosen is president and CEO of the Network for Teaching Entrepreneurship. Maria Pinelli,NFTE’s board chair, is global vice chair for strategic growth markets at Ernst & Young. http://www.carltonfields.com http://www.carltonfields.com http://www.crainsnewyork.com http://www.crainsnewyork.com

Table of Contents for the Digital Edition of Crains New York - January 14, 2013

Crains New York - January 14, 2013
In the Boroughs
In the Markets
The Insider
Business People
Opinion
Greg David
Small Business
Report: Real Estate
The List
Classifieds
New York, New York
Source Breakfast
Out and About
Snaps

Crains New York - January 14, 2013