NYC’s Primary Election: A Leap Forward for A Jobs Guarantee, or Train Wreck?

Noreen Connell

By NOREEN CONNELL

The winner of the Democratic primary election for New York City mayor usually goes on to win in November, the two big exceptions being mayors Rudy Giuliani and Michael Bloomberg.

Out of the eight Democratic mayoral candidates receiving endorsements and press attention, three have made strong promises about programs to create jobs, all making a historical reference to President Franklin D. Roosevelt’s New Deal. In addition, their job programs are linked to concerns about equity and the environment.

New Jobs

Attorney Maya Wiley, a former mayoral counsel with a prior career in civil rights organizations, dedicates $10 billion in capital funding for a “Works Progress Administration” that would create 100,000 “hire-local” jobs for neighborhood climate abatement.

Dianne Morales, a former executive director of major non-profit organizations, backs a “Green Municipal Jobs Guarantee Program,” which also includes a “hire-local” requirement. But Morales gives no specific funding or job targets.

NYC Comptroller Scott Stringer initially stated that he would create 50,000 “New Deal Jobs” and later increased his goal to 100,000 jobs. There is an important qualifier for his promise, however. By his calculation, every billion dollars in capital funding can create 5,000 new jobs, so the city would have to have an additional $20 billion in its capital plan.

Other candidates now make promises of creating as many as 500,000 jobs. Still, the small print makes it clear that their calculations assume the resurrection of the city’s tourism and hospitality industries. Some even mention lifting the current mayor’s “pause” on the capital plan.

Cash Relief

At the beginning of the race, only one mayoral candidate, Andrew Yang, a small-business entrepreneur and former presidential primary candidate had come out for a $1 billion “Basic Income Program,” which would grant $2,000 a year to 500,000 of the city’s poorest residents.

Two other $1 billion cash relief initiatives have emerged.

At the end of May, Eric Adams, the Brooklyn Borough president and a former commander in the New York City Police Department, unveiled his “NYC AID Program,” which would provide families with annual incomes of up to $50,000 with a city-funded 30 percent supplement to their federal income tax credit (which is now refundable). This could provide up to $3,000 extra a year for families who have participated in the workforce.

Shawn Donovan, former budget director to President Obama and U.S. housing secretary, is now highlighting his “Equity Bonds” proposal. This is a savings bond for every child with an annual city contribution of $1,000 ($2,000 for every poor child), which could be

cashed out at 18 years of age. For the lowest-income youths, this could come to almost $50,000, enough for college or starting a business.

And the Winning Economic Strategy Is…?

Because New York has lost 585,000 jobs during the last year, the highest (by number and proportion of labor force) among the nation’s large cities, the priority of the mayor in 2022 will be to reverse the damage to many residents hurt by unemployment, bankruptcy, or large debt.

It’s tempting to view the June 22 primary as a two-way contest between job creation and cash relief initiatives. But this is misleading because all eight of the leading Democratic candidates devote most of their economic platforms to their strategies for bringing back small, neighborhood businesses. There’s a reason for this —job losses, outside of tourism and entertainment, have been overwhelmingly experienced by low-skilled and low-wage workers who have been hammered by the contraction or closure of small businesses.

The three candidates who have presented themselves as the better “managers”–Shawn Donovan, former New York City Sanitation Commissioner Kathryn Garcia, and former Vice-Chairman of Citibank Ray McGuire–have ambitious agendas for small businesses revitalization. In their 2021 websites in March, Garcia and McGuire mentioned high rents as a contributing factor in the decline of retail stores. But by April, their plans included providing temporary city rent subsidies. Eric Adams plans to have “Taxless Tuesdays,” a day when the city would forego its sales tax for small stores. Wiley limits her focus to minority and women-owned enterprises (which all the candidates promise to strengthen), while Morales extends her plans to support the creation of worker cooperatives and community businesses.

The platforms of all eight candidates also include a large-scale City University of New York project to provide skills training and apprenticeship opportunities.

The central problem with all of the ideas for reviving small businesses is that they are presented as though they have a proven track record of success. Trump-era Paycheck Protection Program and Economic Injury Disaster loans did not successfully target smaller businesses and gobbled up $700 billion without stopping the dramatic job losses over the last year. Why are these strategies preferable to the government creating new opportunities? For CUNY’s elaborate skill training programs to work, jobs requiring these skills must be available.

Does It Matter Who Wins?

Since less than a quarter of Democratic voters usually turn out for primaries, polling and campaign funds are less predictive of victory than a get-out-the-vote activity by community groups, unions, and — sometimes, good advertising campaigns.

So, as of a month before the primary election, Andrew Yang is no longer polling first but has gained support from Asian and Hassidic communities. Comptroller Scott Stringer lost the endorsements of some progressive groups because of an accusation of sexual harassment, but he has not lost union support. Running as a moderate, Eric Adams also has union backing and high poll numbers. However, Adams’ acceptance of substantial contributions from real estate interests and his positions on policing could cost him votes because Democratic primaries tend to skew left.

A strong progressive turnout could help Dianne Morales. Kathryn Garcia received the coveted New York Times endorsement, but will that count more than the get-out-the-vote effort by 1199 Health Care Workers for Wiley? Rank-choice ballots, where voters can list up to five candidates, may also create surprises.

If President Joseph Biden’s infrastructure bill passes the U.S. Congress, whoever is elected New York City mayor could preside over a large job-creation plan no matter what promises he or she made during the campaign. Without a “hire local” provision, however, a good share of skilled construction jobs may go to workers in the tristate area as they have in the past. Moreover, if a less progressive candidate wins, there may be even more capital-funded private-public partnerships. Under the last two mayors, these have not produced many new jobs.

If there is no progress on infrastructure legislation in Congress, a progressive mayor will be left with few options. During the dark days of the Trump administration, former Public Advocate Letitia James introduced an “NYC Jobs for All” bill to the New York City Council. The National Jobs for All Network advised James on the plan, which required a $7.4 billion investment by the city (mostly from local property tax increases) to create over 150,000 jobs. After the first year, the program was projected to cost $4.4 billion annually to continue.

Noreen Connell, a former Assistant Commissioner of the New York State Department of Labor, is a board member of the National Jobs for All Network.

*A Special Note About Very Small Businesses

Business failure is often traumatic to owners, so during economic recessions providing emergency loans to keep this from happening is as compassionate as more extensive unemployment insurance for workers. But other factors, beyond a sudden lack of customers, may put a small company at risk.

Even before the Covid-19 recession, the number of Hispanic-owned small businesses in New York City shrank, especially in the Bronx, though they increased in other large cities, according to a September 2020 Center for an Urban Future report, “NYC Minority Businesses in Flux.” Soaring retail rents may be a factor. An October 2020 article in the Riverdale Press revealed that a little donut shop was going out of business, but that even before the pandemic, the store had struggled to make a profit for the last three years after the monthly rent increased to $10,000. This is just one example of the many small retail businesses in the Bronx that are caught in almost a “sharecropper” relationship with their landlord.

Meaningful support for small businesses promised by NYC mayoral candidates — such as loans and grants, help designing websites and internet contracting, temporary wage and rent subsidies, and reduction of city taxes, red tape, and fines — may not result in a significant return of jobs at small companies barely making a profit. Since vacant space provides a tax advantage for real estate companies, candidates’ proposals for a new city tax on vacant storefronts may help small businesses even more than an emergency loan program.

 

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