New York needs both rich and poor to thrive

This commentary originally appeared in Newsday on May 20, 1979.

I am concerned that some of New York’s intelligentsia have apparently accepted the proposition that “shrinkage” is an inevitable — even desirable — approach to New York’s future.

No one who has lived in this great city over the past 10 years could fail to have seen shrinkage — the decline in the city’s population — at work. We have been told that it was not a consequence of deliberate municipal policy. But we have watched the South Bronx burn — square miles of habitation destroyed. We have seen Bushwick and Bed-Stuy decay until they look like a holocaust has passed through them, with the empty eyes of windows without glass staring out at streets without people.

Lower middle-class communities in Far Rockaway and South Jamaica have been replaced by desolation and the strained hopes of communities on the skids.

The Census Bureau estimates that the city may have lost nearly half a million people since 1970.

Deliberate or not, this process of reduction — whatever it is called — poses at least two question: first, whether the phenomenon, for all its sadness, contains any redeeming elements, and second, whether it ought to be encouraged.

I believe “shrinkage” is a siren song that whispers: “We can get rid of our problems.” In some there is a deeper voice saying that our “problems” are created by the poor rabble f our city, who happen, accidentally, to be black and Hispanic for the most part. Triage is the process, not of uplifting them, but of making them go away.

It is a vain hope that our problems will emigrate. It is an old hope, too, like that which motivated the signs, “No Irish Need Apply.” And those that haunted the Italians and the Jews as they made their adjustments to hostilities in our economy and society.

Obviously, I do not mean to say that everyone who predicts of believes in shrinkage is a bigot. But these same urges, I think, motivate, for some, the desire to depopulate today.

The desire to get rid of our problem poor has often been revealed as a bias against manufacturing industry, which attracts them, and for service and professional forms of economy — nice, middle-class, you know. This works its way slowly into policy and soon the wish becomes reality.

The vision is of a grand middle-class city of respectable city with a socially and economically homogenous population.

The tale can be told like this:

Once upon a time in a great city, many good government experts and the elite business leadership of the city had toiled to make a vision of the city come true.

Let’s call the city, “New York.”

Many were jealous of the style and character of the great capital cities of the western world, like Berlin, Paris, Madrid, Rome and London. Since the mid-19th Century, they had believed that the beauty and order of these cities should be imitated in New York City.

Instead, New York City was a confused jumble of factories, lofts, pushcarts, banks, slaughter houses, elegant skyscrapers, brokerage houses, smoke-belching cracker factories and delicate, federal-style buildings. A grubby proletariat filed into subways and trolley cars, and they were everywhere.

What a great city like New York needed was an economy based on gentlemanly pursuits, such as banking, finance, lawyering, accounting, etc.

The economic leadership was not very successful for a long time. As New York City’s industrial power grew, so did its population, and right through the 1940s, New York’s manufacturing base also grew. Its wealth was a magnet for the poor and they came by the millions.

But then a formidable coalition formed: experts and financiers, real estate interests and good government people. We taxed the factories and the merchant’s industries more heavily than we taxed other activity. We zoned against them. We overregulated them and under protected them. We gave them short shrift and they understood they were not very welcome in New York City.

These manufactures also learned there were places all over the country which were begging these factories to come to them. They began to leave New York, and at first these departures were welcomed.

As more and more left, a new theory took over to explain it: “New York City was the vanguard of a new kind of economy and a kind of society called the Service Economy and Society. It was based on things like government, finance, banking, publishing, communications, legal and economic expertise — very much like its European older sisters.

New York City continued to lose factory jobs throughout the ‘50s. In the ‘60s the unemployment wasn’t noticed because government was soaking up most of the marginal increase in unemployment.

In 1969, the service economy for the first time exceeded the factory economy.

But in 1969, our city went into a recession. It has been receding every year since.

The dimensions of this decline can be described in the following way: Based on the normal growth that might have been expected for New York, if it maintained only the national rates of growth, the actual effects on the period were: 900,000 people (a population the size of Baltimore), mostly skilled and middle-class, gone; 800,000 jobs (more jobs than in the State of Kansas) — mostly in manufacture — lost. We lost 14,000 business establishments.

It was a catastrophe. New York City was experiencing unplanned shrinkage. It was becoming much less diversified in its economy. It was growing more dependent on fewer industries — service industries, including government. These industries were not capable of producing as much in taxes as did the old mix of manufacturing and services.

By 1975, New York City was in terrible trouble; it was bankrupt and was saved only by the timely intervention of the state, under Hugh Carey’s leadership, and a federal loan.

What had happened?

By getting rid of its factories, the city shed more than just its leading tax producers. The city was at the same time getting rid of its greatest immigrant adaptation machine. But America had shut its immigration doors in the 1920s. So there seemed to be adequate reason to believe that New York City would not have to deal with such a wave again.

“Out with the factories!” was the cry. But, after they were well on their way out, a new wave of immigrants di hit the city. Blacks, Puerto Ricans and South Americans. Moved by the post-World War II mechanization of agriculture, especially in the American south, they came to New York City looking, like other immigrants, for opportunities to work and grow.

They were, like other immigrants, mostly unskilled. But unlike previous immigrants to New York they faced a situation where factory jobs were leaving and the only open jobs were for white collars.

Many wound up on public assistance. Their children flooded the public schools, where were not able to handle a wave of depressed immigrant youngsters from underemployed and demoralized families. Also, the schools had to train them for white collar jobs and in one leap, lift them into the middle-class in a single generation.

The public schools broke down under the strain of so great a burden. Drug abuse became a hopeless escape from hopelessness. Crime increased and welfare, now growing by the positive feedback of a sick system, also produced the spreading despair that can be seen in the South Bronx, Bushwick, along the Grand Concourse and in South Queens.

When the economic decay finally undermined the city’s financial base in 1975, government could not take up the slack. It, too, was depressed and had started laying people off.

And that’s about where it is today. New York appears to be stabilizing. However, as several people have pointed out, it is a midtown Manhattan real estate flurry that dazzles us: the outer boroughs are still suffering decline. And the city is borrowing from the future on its capital budget and it will have to pay the price of neglect.

I write of the importance of primary industry and factory work, not to denigrate the importance of service industries. I believe respectfully that the city’s fathers, from the beginning, made the mistake of seeing a competition between different types of industry.

That is unhealthy. We need, rather, a balance of both. We are a mixed bag in New York City: educated and uneducated, rich and poor, smart and not-so-smart, strong and weak, resourceful and confused, good and bad — a true cosmopolitan city. We need jobs that will be attractive to all peoples who come to New York.

This is a port city with an open door. It should have a variety of industry, to have a job for everyone. That’s the kind of city it always has been — when it has been closer to its best.

Mario M. Cuomo of Holliswood is secretary of state of New York. This article is adapted from a speech to the New York State Bankers Association.