Crains New York - March 4, 2013 - (Page 11)

PORZIO Inequality debate doesn’t reflect reality “The rich got richer and the poor got poorer in New York City last year as the poverty rate reached its highest point in more than a decade,and the income gap in Manhattan, already wider than almost anywhere else in the country, rivaled disparities in sub-Saharan Africa.” —The New York Times, Sept. 20, 2012 NYC’s poverty rate is the lowest of the five largest U.S. cities Rank in top 20 Philadelphia 28.4% 2 Houston 23.8% 5 “Income inequality can weaken or destabilize the local tax base, reinforce patterns of racial and economic segregation, and undermine the vibrant social, cultural and economic mix that is the foundation of New York City’s identity.’’ —Comptroller John Liu, announcing that the top 1% of income earners account for a third of the income in the city, May 2012 R epetition can become fact. That certainly applies to the issues of inequality and poverty. New York is the most unequal city in the nation, the experts have repeated endlessly the past few years, and the plight of its poor has worsened dramatically. Yet neither statement is the whole truth, according to some intriguing new research from the city’s Economic Development Corp., which shows inequality in New York to be not much worse than in the other largest cities in the country—and its poverty rate lower than those places. Make no mistake. There is no more important issue in New York because inequality and poverty are central to any assessment of whether Mayor Michael Bloomberg has made the city better for all or just the fortunate few and what sort of policies New York should embrace. The problem is that research on Porzio, Bromberg & Newman P.C. is pleased to announce the expansion of its New York Real Estate, Corporate and Commercial practices: Chicago 23.7% 6 Los Angeles 22.6% 9 NYC “None of the largest cities in the U.S. has a greater degree of income polarization than New York City.” —Pulling Apart: The Continuing Impact of Income Polarization in New York State, Fiscal Policy Institute report, Nov. 15, 2012 W E L C O M E S N E W AT T O R N E Y S 20.9% 13 Total U.S. 15.9% N/A S T E V E N R . W A G N E R P RINCIPA L J O H N R . W A G N E R OF COUNS EL B O N N I E R E I D B E R K O W OF COUNS EL K A R E N E . S C H W I M M E R A S S OCIATE Source: New York City Economic Development Corp. research from American Community Survey The skilled attorneys bring further strength and insight to Porzio’s representation Inequality in New York is not because our poor are poorer than elsewhere, but because our well-off are better off, and there are more of them. The average of commercial, industrial and residential clients in real estate construction, zoning, ownership and management transactions and litigation. household income for each income range (called a quintile) is higher in New York City than the average of the largest cities. PEOPLE PERFORMANCE Poverty has increased less in New York than the other large cities since the recovery began. In addition, New GREG DAVID York’s poverty rate is the lowest among the big five cities and ranks 13th among the top 20 cities. New York had the sixth-highest poverty rate in 2000, just before the beginning of the Bloomberg era. Nationally, it is clear that inequality has gyrated because the income of the super-rich is dependent on dividend and capital-gains income derived from markets. Their income spiked in 2007, fell sharply in 2009 and has rebounded since then. Inflation-adjusted wages for other workers have been stagnant, and poverty has increased in the poor economy of recent years. Those statements are true for New York,but the city has also added more than 200,000 jobs, at twice the percentage increase as the nation as a whole, putting employment here at a record 3.8 million. Many of the jobs are in fields like retail and hospitality, in which minorities are heavily represented and have been able to get jobs, although the pay isn’t great. Still, a sizable number are in goodpaying sectors like business services, film production and technology. The bottom line: Inequality and poverty are issues here, too, but not more extreme than elsewhere and, in some cases, less severe. Some economist or research group without an ax to grind should tackle these issues. In the meantime, New Yorkers should apply caveat emptor to this debate and understand the world is a more complicated place than the advocates would have you believe. PERSPECTIVE PBNLAW.COM Morristown, NJ | Princeton, NJ | New York, NY | Westborough, MA is made up of five counties (other cities are parts of counties) to compare where the super-rich live (Manhattan) with a very poor county in Georgia and the subSahara. The EDC looked at the city as a whole. Different numbers, very different conclusions. The EDC has an agenda, too: to bolster the mayor’s claim that the city’s economic recovery is stronger than elsewhere and that the benNYC has fewer poor and more upper-income people efits are widely shared. Its numNYC L.A. Houston Chicago Phila. bers, based on an Under analysis of the $25,000 29.2% 29.2% 29.9% 30.8% 38.8% Census Bureau’s $150,000+ 11.8% 10.0% 9.4% 8.8% 4.4% American ComSource: New York City Economic Development Corp. research from American munity Survey, Community Survey deserve to be taken as seriously as these issues is completely politi- those of the other side. cized. Studies on inequality in the Here’s what the EDC found: Income inequality is not much worse city are primarily undertaken by the labor-based and very liberal Fiscal in New York than in the other largest cities Policy Institute and the city comp- in the U.S. The EDC has plotted the troller’s office, matching Mr. Liu’s standard measure of inequality, known as a Gini coefficient, since similar philosophy. Crain’s was an early stoker of the 2007 and found the income disparity obsession with inequality in De- in Los Angeles and Houston in 2011 cember 2010 with a front-page sto- almost as extreme as New York’s. ry called “Gilded city,” based on a Fiscal Policy Institute study that put NYC’s poverty-rate index increased less in the recession than in the other most of the emphasis on high Wall largest U.S. cities (2007=base rate of 100) Street salaries. It’s been a one-sided 130 U.S. 122.31 L.A. 122.16 Phila. 119.33 conversation ever since. (ConservaChicago 115.61 Houston 114.98 tives have weighed in on the issue 120 nationally but not locally.) Much depends on how the 110 numbers are presented. The Fiscal NYC 112.97 Policy Institute did three-year av100 erages of an inequality measure. The EDC tracked the same meas90 2007 2008 2009 2010 2011 ure annually for five years. The Source: New York City Economic Development Corp. research from American Community Survey Times took the fact that New York March 4, 2013 | Crain’s New York Business | 11 http://www.PBNLAW.COM http://www.PBNLAW.COM http://www.facebook.com/crainsnewyork

Table of Contents for the Digital Edition of Crains New York - March 4, 2013

Crains New York - March 4, 2013
IN THE BOROUGHS
IN THE MARKETS
THE INSIDER
SMALL BUSINESS
REAL ESTATE DEALS
BUSINESS PEOPLE
OPINION
GREG DAVID
REPORT: 2013 ELECTIONS
CLASSIFIEDS
NEW YORK, NEW YORK
SOURCE LUNCH
OUT AND ABOUT
SNAPS

Crains New York - March 4, 2013