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The Place for New York Policy and politics

Citizens Union

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Using This Crisis to Prevent the Next One

Gotham Gazette

The Place for New York Policy and politics

Photo (c) Urban Agenda

While the economic picture is grim across the country, New York City has been especially hard hit in recent months. The city's heavy dependence on Wall Street revenues has left us facing a projected budget shortfall of nearly $4 billion. Adding to the city's crisis, a quarter of the shortfall is due to state cuts resulting from Albany's crippling financial difficulties.

For More on Helping New York's Economy

Paying Attention to Cities By Jonathan Bowles
After years of federal policies neglecting urban areas, Barack Obama has sent some encouraging signals that he understands their importance. Certainly, New York could use a helping hand. The director of the Center for an Urban Future lays out some ideas for what the president could do to aid New York.

An $825 Billion First Step By James Parrott
The stimulus package proposed by Congress is key to halting the economy's downward spiral but it will not solve all our problems. Economist James Parrott of the Fiscal Policy Institute looks at what the package would do -- and what more needs to be done.

Infrastructure Investments that Make Sense By Carter Craft
As big as the stimulus package may be, the country has to invest the money wisely. An urban planner offers some novel ideas for New York projects -- from recycling grease to ferries for freight.

From Gas-Guzzling Cars to Clean Buses By Charles Stone
Simply lending funds to struggling auto companies won't spur economic growth. Instead, an economist suggests, the government should create a voucher program to deploy the resources of the auto companies, spur investment -- and help the environment.

Previous Articles
A Federal Stimulus for City Parks By Anne Schwartz
Advocates hope that President Obama and Congress will recognize that funding parks would not only improve the quality of life and the environment but also spur investment and raise real estate values.

Stimulus Money: The Downturn's Silver Lining? By Graham Beck
The stimulus package could offer more federal funds for transportation projects. The MTA is making its list, but there are sure to be lots of restrictions -- and competition.

The crisis highlights the danger of the city's economic over-reliance on Wall Street. Even when times are good, only a few New Yorkers reap economic windfalls. When times are bad, the entire city suffers.

For all the pain it is causing, though, the sagging economy presents us with the chance to rebuild our economy in a way that prevents similar economic crises in the future. The federal economic stimulus package before Congress presents an opportunity to build a greener and more equitable economy. Urban Agenda, convener of the New York City Apollo Alliance, urges Congress to fund projects that will create high-quality, "green collar" jobs and help make New York City more environmentally sustainable.

A stimulus package for New York City must focus on increasing investments in public infrastructure -- rehabilitating and retrofitting schools, buildings and mass transit systems - not on giving tax breaks. Currently, the Obama administration is proposing $150 billion in tax cuts for businesses. However, prominent economists, including an advisor to Republican presidential candidate John McCain, note that every dollar spent on public infrastructure projects generates $1.50 in economic activity, while tax breaks lack this "multiplier effect." Every $1 in tax cuts produces less than $1-- and sometimes as little as 30 cents -- of economic activity.

Green Is Not Enough

While we need to act quickly, we must also act responsibly. It is not enough to just create "green" jobs. Instead, we must create "green collar" jobs that pay well, provide health benefits and offer opportunities for career advancement while improving our environment.

This is key. Creating jobs that pay poorly and do not provide health benefits or pathways out of poverty will lead to an underclass of workers employed in green jobs but unable to make their way into the middle class. If we consider both environmental benefits and wage and job standards, we can have jobs that will help the resurgence of the middle class, strengthen our economy and make New York City a leader in sustainability.

The NYC Apollo Alliance has compiled a list of recommendations for evaluating projects to ensure that we maximize the potential of our green collar workforce. (The full document can be found here.). Projects funded with stimulus dollars should:

  • Create employment for a wide spectrum of workers, from low-skilled to highly skilled.
  • Support local employment opportunities. Outsourcing occurs not only when jobs are sent overseas, but also when labor is imported into an area with an already trained and ready labor pool that can, and should, be employed.
  • Create jobs that offer good wages, health care benefits and paid time off.
  • Promote employment in environmentally sustainable areas, such as retrofitting building, brownfield redevelopment and urban forestry.
  • Promote the retrofitting and maintenance of existing infrastructure, such as mass transit systems, roads and bridges.

Using these criteria to evaluate projects proposals will help rebuild our economy and create a greener, more sustainable city. For instance, using federal stimulus funds to create an "Efficiency Matching Fund" providing a 100 percent federal match for state-approved energy efficiency programs would help quickly channel funds to green job development. Every $1 invested in such programs saves $2 to $4 in energy costs for consumers, freeing up additional consumer purchasing power. Energy efficiency programs also bring us closer to environmental sustainability.

The economic stimulus must fund training and readiness programs to ensure there are enough skilled workers ready to do these tasks. The Consortium for Worker Education, the Association for Energy Affordability and the New York Industrial Retention Network developed a plan to integrate economic development and workforce development to promote energy efficiency. With funding, this proposed Green Jobs Center would include a training center to assess, train and place over 2,700 workers in the energy efficiency industry. The center also would provide business services for over 900 businesses seeking to expand or enter the energy efficiency market over a three-year period.

Finally, to ensure that stimulus spending creates jobs in the near future and new industries in the long term, it must include language that allows cities and states to give preference to local companies when they purchase goods and materials used in federally funded capital projects. This will nurture local green manufacturing and reduce the carbon footprint of projects by removing the need to transport products long distances.

The Wall Street disaster offers us the opportunity to build a new economic future. Wisely invested, the federal stimulus can generate the green collar jobs that will rebuild our middle class and create a more sustainable environment for generations to come.

J. Mijin Cha is director of campaign research at Urban Agenda, convener of the Apollo Alliance. The alliance is holding a public forum on Feb. 2nd to discuss the New Apollo Plan, the economic stimulus and New York City. For more information, visit

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Gotham Gazette

The Place for New York Policy and politics

Gotham Gazette is published by Citizens Union Foundation and is made possible by support from the Robert Sterling Clark Foundation, the John S. and James L. Knight Foundation, the Altman Foundation,the Fund for the City of New York and donors to Citizens Union Foundation. Please consider supporting Citizens Union Foundation's public education programs. Critical early support to Gotham Gazette was provided by the Charles H. Revson Foundation, Rockefeller Brothers Fund and the Alfred P. Sloan Foundation.

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Down and Out

By Megan McLaughlin

Laura DeMaio put down the phone with a pained expression on her face. Someone had just called her for help with a mortgage payment and had not even thought to apply for unemployment insurance. He had lost his job at the World Trade Center. "I thought I'd just get another job," he told DeMaio.

"That's the typical response I get," she said. "Most people don't even realize the economy is so bad, that they probably won't get a job so easily." DeMaio is a social worker at the Federation of Protestant Welfare Agencies, where I am the executive director. She handles dozens of phone calls every day, giving out emergency cash assistance. Requests are typically for the most basic needs -- coverage of rent or mortgages, outstanding medical bills or health insurance premiums, utility bills, food.

She administers to people who have always lived on the edge of poverty. But these days, she is receiving more and more calls from 9/11 victims. It is their needs, we know, that will eventually overburden the entire system


Americans have shown themselves to be extremely generous, sending more than one billion dollars so far to New York after September 11. But New York charities are nevertheless taking it on the chin, caught in a double-bind, and things are only going to get worse.

As we know from the experience in Oklahoma City, when government aid tapers off, victims and their families will continue to require various forms of help, especially mental health counseling. These needs will be compounded by the recession, which will require them to look for job re-training, food aid, child care, and in some cases, shelter.

But ironically, according to advocacy groups, both private and public dollars are being diverted from these regular services, to newly created charities specifically devoted to, in the words of Melissa Aase of University Settlement House Project Home, "disaster funds, trauma, and the fallout of the WTC disaster."

With so many funds for victims, there has developed a kind of donor fatigue for other causes in New York, a city that is well known for its social consciousness and its glittering benefit season. In fact, public perception of priority needs at this time is intensely focused on victims of September 11, with little thought to long-term social service needs in a weakened economy.

The recession, the immediate and feared future losses of revenue, donor indifference, and severe budget cuts are putting nonprofits into survival mode. It is prime benefit season, yet most are being cancelled, or the turnout is so low that charities are taking unexpected financial losses. With few funds available for operations, the overall feeling in the nonprofit community is that within the next year, many New York charities will be forced to pare down key programs and services.


This would be a sad predicament for the people of New York at this time in particular. Social service needs were already enormous prior to September 11. Now, poverty continues to deepen. Nearly 20 percent of New Yorkers live at or below the poverty level. Homelessness is predicted to escalate. Welfare time limits are fast approaching. And, HIV/AIDS is continuing to devastate our neighborhoods, especially communities of color. The poor in fact, are at greatest risk, with the recession hitting low-wage workers most, according to economists.

In the city, job losses from September to October are estimated at over 100,000, and in October, unemployment rose to 5.4 percent. A dire prediction is that the unemployment rate may even reach 7 percent by the end of the year, nearly twice as high as it was a year ago. This does not bode well for low-skilled workers. Nor is it encouraging for people who worked at the World Trade Center and who have now joined the ranks of the unemployed.


The argument that now is the time when low income communities are most in need of government assistance has not gone over well with city or state officials. In anticipation of huge revenue losses because of the attacks and the recession, Mayor Rudolph Giuliani very quickly announced that city agencies would face budget cuts of up to 15 percent. Many agencies do not know how they will be affected. Some are holding to last year's spending levels, but others are operating as if the money will not be there at all. That translates into more job losses. Agencies are getting ready to cut staff. In many cases, loss of a staff person could mean that an entire program is dismantled.

In Albany, where member items (the money given to individual legislators to allot at their own discretion) sometimes fund entire programs, the news is little better. On top of a budgetary process that would be comedic if it were not such a sham, the state barely passed re-appropriations of funds to pay for last year's contracts. At the last minute, the governor, senate and assembly agreed to provide $200 million for social services. That may sound like a lot of money, and in truth, no charitable organization wants to appear callous or insensitive to fiscal policy choices at this time. However, $200 million will not go nearly far enough to meet already existing needs.

Normally, the state spends $500 million a year on social services. That leaves many nonprofits wondering how they are to cope with increasing demand. Those working with the most vulnerable population hope that the city does not return to the crisis from which it worked so hard to extricate itself in the 1970's. Nonprofits have always been a crucial safety net for New Yorkers, but they require investment from both government and private citizens to offer the kinds of services we all hope none of us ever require.

While nonprofits encourage city and state governments to take a second look at the quandary of the social services sector, New Yorkers must rally round the charitable nonprofit community. Each person's involvement and support of the nonprofit sector, however small, provides the lifeblood for our larger community - and indeed, our ability to emerge from this recession and the recent disaster as a stronger, more vibrant city.

Dr. Megan McLaughlin is the executive director of the Federation of Protestant Welfare Agencies


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Gotham Gazette is published by Citizens Union Foundation and is made possible by support from the Robert Sterling Clark Foundation, the John S. and James L. Knight Foundation, the Altman Foundation,the Fund for the City of New York and donors to Citizens Union Foundation. Please consider supporting Citizens Union Foundation's public education programs. Critical early support to Gotham Gazette was provided by the Charles H. Revson Foundation, Rockefeller Brothers Fund and the Alfred P. Sloan Foundation.

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