Mollenkopf Phoenix Chapter 3

8/12/2019 Mollenkopf Phoenix Chapter 3

1/13

ThreeThepostindustrialTransformationofew york Ciry)ew york is nothirfi:'iil*r;:l-r',ftrilii';.Tr,ffirty s ikepoetry:ir' lt T:'*;il";j:il ff :Ts' e' raesff l,.*"n',:?:d#:i" psn,h;;:THHii::+t ll",::Tn'

"il1T*kIli:', '::ilffi','

;#H:"m#j#tiH#ilf,f;'T;:::1:'1qil",i:i:i:l:ffi ::ffi:":.::1'f.l::l:,.,,,co.po.,,l****.1e**rffilf:lT':ff::HT' thatre..u..,nr-in,r,i(I/alter Stafford, ClosedLabor Marketsl3Tur p_nrvtouscHApl**fffififfifi;*Nfifi*ftffilxili#if{i'*;'ffiil**f'ffi *fand hscalbasehas altered

f,,^ l,l,^/r/rl,' ",,- t

WASHINGTONHE IG HT

rFr ntwnUPPERWESTstoE

CE NT RAPARKMANHA

G NE E NW ICHV ILLAGEs oHo

LOWER EAST S IDESAT'NY PARK CIT Y

FINA NCIA L D 'S IR ICT 'h

A TL , 4 N T C O CE A N

FONOHAMPLAZA

BRONXSOUTI{BBONX

cLrNroN siuYvi ;aNrPANK SLOPE

CANARSIE

NewYork Ciry,Selected eighborhoods


2/13

4 6 C H A P T E R T H R E Ethese hreedomains,creatingnew pressures n the New York City politi-cal system.Interactions etweenState, ociety,and economyhavenot unfolded na stableenvironment.Between1.970 and 1990, the culmination of thepostindustrial evolution subiected ll three o rapid and thoroughgoing.hnng.. Someanalysts eject he term "postindustrial" becausemanufac-turing retainsa large shareof the national output and continues o be akey determinantof economiccompetitiveness,ven hough its shareofemploymenthas fallen steadily.a hile these acrscannot be denied, he"postindustrial" conceptneverthelessaptures rucialaspects f the cur-rent transformation hat other terms miss.Narrowly construed, he concepthighlights he massive nd irreversi-ble shift of employmentaway from the manufactureand distribution ofgoods oward services nd the associated hift from blue-collar o white-iollar work sertings.n this sense, ew York and other argecentraleitieshavebecomehighly posrindusrrial. ln 1982, 14.7 percent f the residentsof Los Angeleswere employedas manufacturingproduction workers; inNew York, the figurewas only 10.5 percent's)The postindustrial ransformation s far richerand more complex ha na simpie shift in economic secrorsand occupations,however. Like it spredeiesso., he industrial revolution, the postindustrial evolution ha steen driven by basicchangesn global capita l ism: apid technologicalchange, he globalizationof economic ompetition, he ncreasingmpor-tanceof finance elative o production, he globalizationand centraliza-tion of financialmarkets,and the formation of a new internationaldivi-sion of labor, with renewedmigration from third world industrializingnations o the core citiesof the 6rst world.oThis increasing lobal ntegrationhas beencenteredn and fosteredbya smallnumberof world-city nodes.None hasbcenmore central n prop-agatingchange nor has felt its impact more strongly than New York'7Bit*ein the ow poinr of the business ycle n 1975 and ts peak n 1989,the forcesof changewere partictllarly rapid. New York City's sustainedeconomicboom causedemployment n the advanced orporateservices,socialservices, nd dte public sector o mushroomand ncreasedhe city'sgrossproduct and median householdearnings.At the same ime, manu-facturingcontinued o decline.

The compositionof the city'spopulation alsochanged apidly. The ol dpattern n which blacks and Puerto Ricans eplacedwhites was steadilyiclipsed by a new pattern n which black, Latino, and Asian "new immi-gr"ntt" displaced he native born of all races.l'he rnt>vemcnt f womcninto the labor force and the rise of nontraditional households eshapedthe city's social base.Thesedemographicchangesntertwined with th erestructuring of the city's economy to forge a new racial/ethnic/genderdivisionof labor as well as new forms of inequality.E

P O S T I N D U S T R I A L T R A N S F O R M A T I O N 4 7This transformationerasedmany of the socialand spatial eaturesha tdisringuished he precedingera. while always mportant as a headquar-ters city' New York's single argestsocial strarum n the mid-1950swa sblue-collarwhite ethnics.Turn-of-the-cenrury mmigrants and the chil-dren tlrey bore before world rwar II constitutedan industrial workingclassof considerable roportions. Today, few white blue-collarworkersremain; many once categorized his way are now elderly.eNew groups

have replaced hem, ranging from white professional,und -unug.., ,ominority and femaleclericalworkers, to immigrant serviceworkers. of -fice workers in corporate, social service,and iovernment settingsvastlyoutnumberproduction workers.ri/hile many women and blacksbenefited rom the departureof whitemales-from the city's Iabor force, many were arso.*.lud.d from it sgrowth. The overall poverty rare and income nequality both increasednoticeably uring the 1980s.poverty rose rom 15 percent n1975 (about20 percentover rhe national average)o 23 percen in r9g7 (almost wicethe.national average).t0 ow labor-force participation rates or blacks,Latinos,and women,. hc growth of femaie_head'edouseholds, nd th edeclineof the real value of rransferpaymentscontributed o the growthof poverty.'r Ar the otlrerendof the ncomedistribution, . ' 'or, iapidrygrowing and remune.rative ccupations n the advancedcorporateserv-ices argelyexcludedblacksand Latinos.r2 hese rends ."nrfo.rn.d N. *York from a relatively- ell off, wlrite, blue-coilarcity into " n,or. ..o-nomical ly iv ided,mu l t i rac ia l ,white-col lar i ty . rThe contradictoryforcesof investmentand abandonment n New york,spostindustrial evolution-also eshaped ts built environment.co.por"t.office owers and zonesof luxury ..rid.n.. and consumption "ros. a.ldrta decayingpublic infrasrructureand declining neighborhoods,makingNew York a "phoenix n the ashes."to, lonry f l r tg ls : d ic r the . i f u.g i ito experience er gains n the sizeand quality of its housing ro.(.; ur.,and placesassociared ith the ndustriai city and rhe poor i..ti*a i,.ou-ily, while invesrmentsurged nto office construcrio;, the institutionalexpansio' of hospitals and universities, he conversionof former loft-manufacturingareas' he gentrificationof Iate-nineteenth-centurypper-class eighborhoods,and rhegrowth of new immigrant neighborhoods.Growth of $/est Indian, Latin, and Asian mmig-ron, o-"-unities likeCrown Heights,JacksonHeights, and Elmhursr,"togerher ith ,p*rrdmobility for some native-born blacks, drove the bolundaries f tire ol dghettosourward into former white working-class esidentialn.ighbor-hoods.Prornptcd by this minority invasionl white edrnics .t.ea'ted oethnicenclaveson the city's periprery.'5 The growing number of poorblacksand Latinos reinforced he ioilapse of th-e ld gi.,to coresof th esouth Bronx, Harlem,.the Lower EasrSide,and cent"rarBrookryn. The iciry hus presentedtself as a paradoxicalmix of sprendor nd decay.


3/13

\j1

4 8 C H A P T E R T H R E E

These adicaleconomic' ocial, nd spatial hanges ad potentiallyI"rg.'ptfi i i.al implicationr.Fit", they altered he economic'demo-,r""Ofrl., nd goueinmenralnterests ith which ocalpoliticalentrepre-neursnteract. conomicestructunngtrengthenednesetof.eco.nomici""..ri, *nile severely nderminingthers.Commercial anks, nvest--.nrb"nt r, thediversifiedinanciaf rms'corPorateaw.firms' nd ea lestate evelopersccrued astly ncreased.revenuesnd assets' ublicsector roducernterests-particularly.ublicemployeesnd nonprofit"rg-iJ*t"s that rely on public unds-also ncreased

n sizeand re -;;;;.;r. Deindustrialization,n heotherhand, ndermined anufactur-;;i l;;s and he unions har representedheirworkers.Firmsand;;pl"t;.t in the risingservict"ttot' displaced anufacturingn the.ornpetitionor space, apital,-labor,ndpolitical upport'-- Oi, ifr. demogiaphicrfnt, ih. postinduitrial evolution ltered onstit-";;;t ;;;" *lii.h .l..toral alignments.ad ested'ewish

armentwork-. . ro . f t " f i " " r t .u .do. . rd i sapp"eared ,wh i le themanager ia landpro fes -sional trata f th. gro*ing "t'o" became ore ewish .nd.talian'Th ee.;;ih'"? ,t. n"tiir_born"black

nd puertoRicanpopulations lowed,irhil. th. new mmigranrs ecamehe driving orce n thecity'spopula-,ion.sin.. theold "-ndn.* minoritygroups olonized istinctocationsin iirr.uofuingdivision f laborandexperiencedifferent conomicra -i..iori.r, they" eveloped ifferentand sometimesonflictingnterests'rrr.l""|ir"*;;-.ltt; fosition,lackof English' ndnoncitizentatus fifr. i i"-lg."nt, t.nd"d'to excludehem rom thepoliticalarena. lroadJ.ltgt"ftic trends n.thtlt" significantlylterid he composition ftheelectorateomparedo the195ds.n short, hepost-industrialevolu-tion alteredhe aw ngredientsromwhichpolitical ntrepreneursight;;;k;; ;tg"nizea doriinantpolitical oalitionn New York Citv'-- i.cond,"thesehangeslso xacerbatedensionslong he characteris-ticollffitindustrial f"aultines f race, ativity, thnicity'

ender, ouse-;";iJ'f;;, and ndustry ector' he primary ension perates,betweennurn.ri."tiy decliningbut stil l politi ially and economically ominantwhitesand he nume.icallyncreasingut economicallynd politicallysubordinate aiorityof biacks, atinos, nd Asians' he diversity ndcompetidon mong hese attergroups'however' eneratesecondaryi.nrion, within thi emerging o"n*hitemaiority'(Forexample.,lackDrotestersave onductedoycotts gainst orean reengrocers')t'i l;;;,",i;; hlchlt cyclical, urt_ond_boomarure f theeconomyro mthc 1g60so tlre ggtrs p.d th. pace f c6angc, ccerruatedhc evel f.o "n i . . ' anddestab i l i zed loca lgovernment 'Srevenuebasc.AsShef te r l ras;"*], i i it ttor.. looseold i""ttn' of -politicalaccommodationndop".n.i theway to-newon.''ft Frorn195b nto the t970s' ocalpublicexpendituresose aster hanrevenues. ntil theearly1'97)s,citygov-. , n n l . n , f i n a n c e d t h i s g a p w i t h s u b s t a n t i a l i n c re a s e s i n f e d e ra l a i d a n d

P O S T I N D U S T R I A L T R A N S F O R M A T I O N 4 9borrowing. Economic contraction, dwindling local revenues nd inter-governmental ransfers,and the closureof the capital market led to themid-1970s iscalcrisis.This crisiseroded he autonomy of city governmenr,hrew elected ffi-cialsand public employees n the defensive, nd madepublic support orprivate investment politically attractive. Theseoutcomes ostereda re -newedeconomic boom and, as city revenues nd governmental uthorityrecovered,a renewed struggle over the "stakes and prizes" of localpower. The city budget doubled between 1977 and 1.987, inanc ed argelyfrom increased ocal revenues.t once more becamea powerful prize fo rthose who built the new conservative ominant coalition and for thosewho sought o challenget .The postindustrial evolution hus exertedstrong but contradictory n-fluences n the local political order. It transformed he economicand th esocial contexts n which New York City governmentoperates. t erasedsomeclaimants or power while creatinga varietyof others; t altered herelative nfluenceof these nterests,what they wanted from government,and heir strategies or gettingpower. The economicand iscalcollapse fthe mid-1970s sped he paceof changeand broke down old patternsofpolitical accommodation; renewed economic growth after 1977 in -creased he potential rewardsof power.

Restructuring he EconomyThe forces hat drive economicgrowth in New York City spring rom itshistoric ole as he leadingport city and as he continent'spremiercorpo-rate headquarters omplex.'7They generated legacyof market, bank-ing, and corporateservice unctions hat sustain he city's position as oneof the globe's three leading centers of businessdecision-making.Th edepth and breadth of t he city's advancedcorporateservices avebecomeits primary competitive advantage.Theseactivitiesare concentratedn theManhattan central business istrict,where Nvo million peoplework in 500million square eet of of6cespace, urroundedby a 30-county egion ha tcontainsanother eight million jobs. In 1985, they produceda grosscityproduct of $150 billion and a gross egionalproduct of $425 billion.rs

Internationalizntion and the Corporate Headquarters ComplexThe industrial growth that was synonymouswith urbanization between1850 and 1950 may turn out to be an histor icalexception,while thecomparative dvantages njoyedby port cities n the earlynineteenth en -tury have eturned o drive urbangrowth in the second alf of t he rwenti-

t i .IIIIIIlJI


4/13

5 0 C H A P T E R .T H R E Eeth century.New York has organizedmuch of U.S. foreign trade since1g00.The'Portof New York and New Jersey emains he argestgatewayfor U.S. merchandise mports, accounting or 20 percentof the oceancargo and 40 percentof the internationalair cargo.reAs internationaltraie rose from 2 percent o 20 percentof GNP since 1970, and th etrade balanceworsened,New York prospered'2o hough ocean cargonow moves hrough New Jersey, he brokers, awyers,and financing e-mains n New yoik, while John F. Kennedy'sAirport air cargo facilitieshavebecomemassive. mports and exportsof goodsand services exclu-siveof factor payments)account or a third of the region'sproduct an dprobably more of the citY's'I.Since he founding of combines ike U.S.Steelat the turn of the cen-tury, New York has"alsobeen he eadingcenter or corporateh_eadquar-,..iin the United States.Drennan includes n this grouping the "chiefadministrativeoffice and allied" employmentof industrial corporations'corporateservices uchas management onsulting,and ancillaryse_rvlces,u.i, u, hotelsand restauranrs.ithin this complex,ho'ever, the fateofindustrialcorporationshasdiverged rom headquarters ctivities n othersectors.The number and employmentof industrial corporations head-quarrered n New York have declinedsignificantly n the last-two dec-ud.r; the number of FortuneJ00 industrial irms headquarteredn Man-hattan fell from 128 to 50 since1955.The numberof headquarters f thelargestbanks, life insurance irms, and diversified inancial firms grewover the sameperiod.22In the mid-i960s, New York containedover a qlrarterof the Fortune500 industrialheadquarters. lthough they departed, hey eft behindanunparalleledarrayof advanced orporateservices rms that serve lientson'u ,.gion"l, national, and globalscale. he increasing conomic ole of iinuestnient anking and he capitalmarketshad a powerfLrl ffecton Nervyork city. with London and Tokyo, Ncw York bcgan o form a single iglobal capital market, to which New York firms contributed a steadTirr.u,,, oi n.* financial "produ6s." The rapid growth of employmentand earnings n investmentbanking had a strong multiplier effect onother sector"s,ucltas egalservices.23he intcrnationaloperationsof U'S'firms, and the U.S. heaJqua.ters f foreign irms remainconcentratednNew York. Drennan has shown that 24 of the 100 largestU.S. multina-r ional irmsare ocated n thec i ty and anothcr 5 in thestrburbs. a lf th eNew York city firms' revenues ere from foreign,operations, omparedto a third narionally.vhile theseNew York city firms were then a quarter of the national otal, they accounted or over a third of total foreignrevenues.tocommercial banking alsoplayeda maior rolc.with dcregulation,Nervyork bankssought o diu.rrify their financialservices nd build nationalancl nternational ranchnerworks. arge oreign anks,especia l lyapa-

P O S T I N D U S T R I A L T R A N S F O R M A T I O N 5 1nese anks,now have ar largerdeposits han do the argeu.s. banks,bu tNew York's shareof foreign deposits n u.S. banks2i a u.s. officesofforeign banks25ncreased.Meanwhile, its shareof u.S. banking assetsheldsteadyat one-third during the 19g0s.27 eturns o these

"rr.,,*.r.

considerably igher than for the largerJapanese anks.Moreover,Ne wYork city 6rms held a quarter of the assets f the world's 130 largestinstitutional nvestors.l8New York's dominant position in advancedservices eaches ar be -vond financialservices.while a quarrer of all securitiesirms with morethan fifty employeeswere located n New york, more than a third of al llarge arv firms and more rhan half of thosewith foreign officeswere.2tNerv York could also claim five of the "big six" accoirnting irms an dnineteen f the world's thirty largestadvertiiing agencies.r0"rennan asfound hat New York accounrs or 20 percentoJ n'ational mployment n"information intensive ndustries,"with a higherconcentration hun "n y9r :r gily except Washington and Boston. By .ont."rr, New york lagsbehindcook.county (chicago)and Los Angeles ounty in absorute u- -bersof people employed n the centrarofficesof business orporarions,and he concenrrarionof its workers in this activity doesnot rank in th etop ten cities.rl

The Tbleconununicntions ond Computer ReuolutionThe revolution n computersand telecommunicationsechnologyhas re -inforcedNew York's role as a global business ervlces enter.Globalbanks^suchs citicorp, the securitiesirms operatingon wall Street, ndlarge inancial nstitutionssuchas American *pr.rJh"u. provideda p.-mary mpetus for technical nnovarion.As Kenneth phillips, a citictrpvicepresidentand chairrnnn of the legisrative ffairs commirreeof th eNervYork Corporate TelecommunicationUsershasobserved,

A literal evolution as akenplace enderinghe bitsandbytes ntering ewYork ia a arge atellite ish, r flowingunder hestreetsf Manhatran t hespeed f light, n a fiberopticcable,whichareparrof a multi-million ollarelectronicsunds ransfer. . . Thiscomparativelymallarea f landhadovernvice he elecommunicationswitching apacity f theaverage.reigncoun-try' morccomputcrshana country he size f Brazil, nd moreword proces-sorshan l l he ountr iesf Europe ombined.apira l nvesrmenty businessusersn private elecommunicationsystems,ommunicatingork processingstat ions,omputer ainfrrmes, in is, ndmicrosscurrentlyn heb i l l ions fdollars nd s growingannuallv.IThestock exchanges nd the interbank funds transfernetworks accounrfo r a arge olumeof inrerc itv nd transhorder nrr f lo*,s lr , ,r hn , . . . i . . ,


5/13

5 2 C H A P T E R T H R E Efinancial nstitutionsalsogeneratemmense raffic. n 1983, an AmericanExpressofficial noted that the firm processed 50,000 authorizationsper day with an average esponse ime of five seconds nd "respond[ed]virtually instantaneouslyo 500,000 daily messagesirectinghigh-speedtrade in securities ommodities,bonds, treasurybills, and a host of otherItems.--

Processing his volume natLrrally equires ncreasinglysophisticatedcomputerhardware and software.The "turrets" in Wall Street irms maytap up to 150 nformation-vendorservices, rovideaccesso a worldwidevoicenetwork, and cost$50,000 o install.They arewired into redundantfiber optic and satellitedigital communicationssystems,on which thetwenty largest New York brokerage irms spent $2.2 billion in 1.987.34Noyelle has observed, New York is usually egardedas the leadingde -veloperof new computerized echnology n the financialservices. . . Fi-nancial nnovation is increasingly ased n part on the developmentofnew computer-drivenproductsand processes."r5Thesecommunicationsnodesdependheavilyon local network capac-ity, which is greater n New York than anywhereelse.New York Tele-phonehas nstalled hree iber optic networks n and around Manhattan,while the city government,with Merrill Lynch,'WesternUnion, and thePort Authority, has nstalledanother ring connecting he four other bor-oughs o the city's "teleport" on Staten sland.New York is served y fiveintercity fiber optic networks and six satellitecommon carriers, alongwith private earth stations un by the television etworks and other largefi ms. n 1981, New York accounted or almostone-fourthof the nation'soverseas usiness alls and 15 percentof the residentialcalls, wice asmany messageunits as originated in Los Angeles, he second eadingorigin.36As massive s he growth of financialand corporateservices as been,they constituteonly one leg of the triad of service ectors.Governmentitself s the secondsector.What some have called "the third sector" or"the independent ector"alsomademajor contributions o the growth ofthe New York City economyduring the 1980s.Nonprofi t and publicservices elpcd make possible r.rd nhanced hc city's dominant positionin the advenced orporate erv ices.

Even hough some of these nstitntions,such as oundations or muse-ums, do not employ large numbers, heir prestige nd resources an stillbe extremelysignificant.A RegionalPlan Association tudy showed ha tNew York City foundationsmade 29 perccntof the total dollar value ofU.S. oundationgrants n 1975,which n turn helped o supporta broadarray of city-basednonprofits.rTElite cultural i nstitutions have helpedNew York keep ts competitiveedgeas a global city; as geographybe -comes essdeterminant or economic ocation.cultural amenities ecome

P O S T I N D U S T R I A L T R A N S F O R M A T I O Nstronger.3she richness f the city's popular cultureand ts ethnicdiver-sity rJinforce his attraction'3e

OfficeConstruction oonrUntil he ecessionhatbegann 1990, he growthof these erviceectors;;;;;J; h.rg. d.rn"nd"fot "t* of6cespacen New York City' Con-struction-cont.".t"*",ds in New York City rose in constant ollars)from $2.4bill ion n 1979 o $4'8 bill ion n 1'987; ornmercialontract"*"ri, ^1."e grew rom $1 bill ion intg7g to $2.5bill ion

n 1987.401n;;;i;80;, nrt]-ri* buildings dded24'2 millionsquare9.et9f spacenmidtown(wi thanest imate"c l28mi l l ionmorecomingavai lablebetween1988and 1.994). imilarpatterns eld or downtownManhattan' adi-."ffy .ft"tging ,h. .iry;, ittyti"e'ar he ownership nddevelopment f,fr.J.U"ifai"g", ", fttgftfy intt''t'"ttd.: accordingo SalomonBrothers'thirtv-six real estate"f"rnilit '"owned50 percent9l'i: primeofficeil: ; i lniu,rut.tt Constructionmploymentoubled etween '977and1989,making t virtually he onlyblue-collar'oods-relatedctivitythatexpanded ithin theNew York City economy'

IndustrialDeclineAs u r f e i t o f f o r c e s h a s d i m i n i s h e d g o o c l s p ro d u c t i o n a n d d i s t r i b u t i o nNew York.Son1."r."g.neric 'l ikeToreignompeti t ion.with'S' ndus-tries oncentratedn NewYork,such s hegarmentndrtstry' tnersarerp..ri. tt n.* York' suchas isingspace' nergy' nd aborcosts' heretiring f rhe urn_oi_th.-..nt,rrymmigrant enerationhat dominatedsmall usinessn New nrk, th. iecline f th. pott, hede.vastatingffecto f r . . . r r i o n i n t h e l g TO s a n d t h e e a r l y l g g 0 s ' a n d t h e f a i l u re t o c a p t u regrowing igh-technologyndr"rstritt:.. . .Employmen,t p.in?ttgand publishing'which s closely ied o theadvancedcrvrces'"t ttiUf" tluiing hc 1980s'hottglrt too washit bythe1990 ecession.roadly peaking,owever' ew York sno onger ni"i""tl"L.iry. Table3'1 sirowshatmanufacturingmployment ascu tb y t w o - t h i r d s s i n c e l g 5 0 t o | e s s t h a n l 0 p e rc e n t o f . t h e c i t y ' s e m p l o y .ment.4r rucking,*"*iou'i"g, and whoiesaleradeexperiencedhes a m e f a t e ' o n . , t u d y . , h n * , , "h , , t o t a l g o o d s - re l a t e d e m p l o y m e n t f e l lfrom35.4percent iih. tot"l in 1'959o 2t'8 percentn 19.85'aaThe4ecline f ,n.,"ti rurinessarallelshedepartrrre.of.industrialead-ouarrers.ewyork hiriori ."l lu pecial izedn small r ight-weightoods:#ili;;;;;;; in relation o their ransporr osts, uchasapparel,


6/13

5 4 c H A p r E R H R E Efurs, ewelry,as well as books,magazines, nd newspapers.othe parts ofthese ndustries hat produce high-fashion tems with small runs or thatrequire quick resupply and close supervisionof production have beenslowest o leave he city. Other parts can rely on low-wage immigrantlabor.a6 oreigncompetition, he retirementof a generation f immigranrJewish ailors, diamond cutters,and factory owners, and business-cycledownturns destroyed much of the rest, however.These ong-termshifts n the New York City economy vereacceleraredby the rapid fluctuations n the city's business ycle.The 1970s contrac-tion devastatedmanufacturingwhile only slowing he growth of the serv-ices; he boom of the 1980s spurred the service ectors,without muchslowing the fall of manufacturing. Table 3.1 shows that the whip ofthe business ycle educedmanufacturing rom almost a third of city em-ployment to less han one-tenth n four decades.aTonversely, inanceand private services lmost doubled rom a quarter o nearly half of cityemployment.The economic boom of the 1980s expandedall three componentsofthe service economy. Finance and other advancedcorporate servicesemergedas the most powerful motors driving economicactivity n Ne wTABLE3. 1

Industry 1950 Percent 1970 1977 1980 1989 PercentConstruction 123Manufacturing 7,040Nondurable (810)Apparel (341)Pr in t ing (119)Durable (230)Transport 23 2Communica-tions 55Utilities 34Wholesale 32 2Retail 433Finance,

insurance, ndreal estateServicesGovernmentTotal

3 .5 11030.0 75 6(23.3) (525)(e.8) (204)(3 .4 ) ( r2 1 . )(6.6) (241)6.7 2031.9 9 51 .0 269.3 30 212.5 434

9.7 460' t4.6 78 51 0 .8 56 31 0 0 .0 3 ,7 4 5

64 77 121539 496 36 0(376) (351) (26s)(153) (1 4 0 ) (1 0 0 )(e0) (e4) (88)(1.53) (145) (e5)157 150 13 476 82 s926 25 23248 245 228372 358 40 2

414 448 53 0783 894 1 ,147508 516 50 23,188 3,302 3,607

3. 410.07. 32.82. 4L . O3.71 . 60 .66. 31 1 . 1

14.73 r . 81 6 .71 0 0 .0

33 650737 43,459

so,zce: New York State Department of Labor. 1950 Transportation, communications,Uti l i t ies and wholesaleand retai l employment iguresest imated.1999 Communicat ionsf iguredepressed y labor dispute.Columns may not add to total due o rounding.

Employment n NonagriculturalEstablishmenrs, ew York Ciry AnnualAverages,950-1989 in housands)

P O S T I N D U S T R I A L T R A N S F O R M A T I O N J JYork City and indeed he surrounding region.Financialservices ener-atedhigh earningsand had a argemultiplier effecton related ectors, utTable 3.2 shows that it accounts or only 1'4.7petcentof total employ-

TABTE .2Employmentrends,NonagriculturalEstablishments,isingSectorsinNervYork Ciry,1969,1977, 1989(in thousands)

1969 1977 1989Percent f1977-1989 1977-1989Annual gain n seruices

Goods roduction and distributionServicesFinancial ervicesBanking

SecuritiesCorporateservicesLegalservicesManagement onsult ing

AccountingEngineering nd architectureBuildingservicesPersonnelervices

Communications,ransport, and media'CommunicationsAdvert isingPublishing

Entertainment,ulture,and tourismRestaurants,ar sHotelsLegitimate heaterMuseums

Education nd researchElementary nd secondaryCollegesHealthand socialservicesHospitalsOther healthservices

Social ervicesGovernment noneducational)Local

StateFederalI O t a l

0.31%

3.49%

2.28%3.82%

1.1 t%

3,659 1.10% n ,a .

r,961 1,,3071,837 1,881466 47 49 7 1 1 899 70183 22828 3935 2223 212'1. 163527 54249 21.285 7639 3270 52185 762123 10634 241 0 1 44 b 5

158 24 81 5 1 1 5 177198 24 0104 11947 6647n 55398 37 7254 24 23 8 5 1106 843 ,7 9 8 3 ,1 8

99 42,6755 3 117 1t J /54176-) )

J- t2 147

-0.96%3.2s%2.36%1L.44%

n.a,100.015.942.6

22056',396 l2301 3 1J.t3 08

31 51 8 41 1 335 01.3910 012142729956/ o

1 . 1

9.3

9. 31 5 .0

5.8

Sollrce:Nerv York State Department of Labor..Reflectsreclassi f icat ion ue to break-upof AT&T and adjustment or a labor dispute n 1989.r'Estimate.


7/13

5 6 C H A P T E R T T T R E Ement and contriburedonly 15.9 percentof tlre city's ob grorvth duringrhe 1977-89 boom. Nerv York's 'niquely broad'array oJ nonfinancialcorporate services xperienced ruly explosivegrowth, accounting fo r42.6 percent f the obs gained.Nonprofit education,health,and socialservices nd the public secroralso made signif icant ontr ibut ions o the city 's economic ortunes, sTable 3.2 shows.Health and education loneconstirure g.4 percent fthe c ity 'semployment ase nd produced 4.3 percent f i ts employmenrgains n the 1980s.Govcrnment erv ices xcluding ducation onsti tute11'8 percentof employmentand contributedanorher5.g percentof th egain. The public and nonprofit secors rhus accounred or almost a thirdof the overall expansion.

Racial Succession, the Racial Division of Labor,and the New InequalityLike the c ity 's economy, ts p.pulr t ion has also bcen grobalizecl" nd"deindustrialized."Much of the white, ethnic vorking-*a middle-classpopulat ionmovedaway rom the city during he 1970s nd 19g0s;thosewho renrainare ar rnore ikcly o be elderly han he restof the popula-tion. In recentdecades,hc "new imn'rigrati. '" hrrsbeconre hc drivingforce behindsocialchange, cdefining he natureof racialsuccession.rt ithe same ime, women's roles, he natureof familiesand household orma-tion, and the array of subcultures avebeen adicallyaltered.of all theseforces, he mpact of migration on New york city hasbeenmost distinct.

Waues of MigrationFour wavesof migration havewashedover New york city: the Irish an dGermans f te rJ.848,he tal ians nd middleEuropeanJewsrom 1g90 o1920,Southernblacksand PuertoRicans n rhe 1940-70 period, and th ecurrent "new immigrat ion" from the caribbean, Latin America. an dAsia.a'These vaves ntersectedwith different phasesof the city's eco-nomic growdr, crearinga distinctive acial/ethnlc ivision of labor. Th egroups arrived with different resources nd employedvaried strategieswith respect o the economiccontext they found. Each wave thus pro-duceda charecter ist ic l t tc rn of ct lrn ic ompctit iorr .The first wo immigrant wavesbuilt upon eachother and prodLrccdcumulative ayering characterized y the ability of earliergroupr to gainupward mobility by colonizinggoodeconomicniches nd difeniing th..against ewcomers. n this respect,New York resembled tlrer arg-e, ld ,industrial citiesof rhe northeastand midwesr.Bur white flieht -d th t

P O S T I N D U S T R I A L T R A N S F O R M A T I O N J /economic declineof the mid-1970s complicatedeconomicprogress orthe atter part of the third and the fourth waves.The black and Puerto Rican immigrants after World War II and thepost-1955 "new immigrants" confronted previously established mmi-grant generations nd their assimilated hildren who occupieda rangeofindustry/occupational iches.During the first part of this period, ethnicsuccessionn the abor market took on a distinctly acial orm. Blacksan dPuertoRicans aceda slowly decliningbut still well entrenched nd resis-tant white population. n the 1970s, apid white flight changed his situa-tion in two ways.Vhite flight created penings or minority entrantsevenin declining goods-related ectorsbecausewhites left faster han the in -dustries declined.sO ccess o growing sectors with well-remuneratedjobs, whether in commercial construction or investmentbanking, re -mainedeffectively l osed o minorities.

The sr.rrge f immigration in the wake of immigration-law reform in1965 also redefined he nature of racial succession. uring the 1980salone, he city experienceda net gain of roughly half a million immi-grants, eversing he city's previousdecades f population oss.Roughlyone-th irdof th is inf lux camc rom Caribbeanblacks,one-quarter romAsians,and one-fiftl.r rom Latinos.srThe native-born black ancl PuertoRicanpopulationsbegan o decline n absoluteas well as elative erms n1980s,so that foreign-born blacks and Latinos were displacingnative-born b lacksend PuertoRicans swe l l as whites.The 1980censusoundthat 18 percent f thc adult b lackpopulat ionwas orc ignborn; by 1988,a CUNY survey found that the rate was over 30 percent.The PuertoRican shareof adult Latinos declined rom 51 percent n 1980 o 54 per-cent n 1988.

Social Change n the 1.970s nd 1980sThe "subtle revolution" has also had an enormous mpact on New YorkCity. rVomen entered the labor force in massivenumbers, the femalelabor forcebecamealmostas argeas he male abor force,nontraditionalhouseholds isplaced he traditional family as the dominant householdform, and birth rates fell below the replacement ate.s2 hough black,PuertoRican, and some mmigrant women havehigher ertility rates hannativewhites, hey are falling over time. And while labor-forceparticipa-tion for native-bornblack and Puerto Rican women has been ower thanfor native-bornwhite women, mmigrant black, Latin, and Asian womenare ikely as native white women to work or more so .The basicchangesn population, race, amily patterns, nd abor-forcepart ic ipat ion uring he 1970sand 1980sarehighl ightedn Table3.3. nboth decades,New York became esswhite and more foreign born, its


8/13

58 C H A P T E R T H R E ETABLE3. 3Changesn the New York City Population, 970-90

1970 t980 19901980-90PercentChange

Total populationNon-Hispanicwhite population(percentage)Non-Hispanicblack population

Native bornForeign bornHispanicpopulationPuertoRicanNon-PuertoRicanNon-HispanicAsian populationForeign-born opulationTotal households

Family householdsMarried couple amilies\Withch i ldren. 18Female-headedouseholdsWith ch i ldren. 18Nonfami lyhouseholdsAveragepersonsper householdMales n labor force(percentage ales 15 )Femalesn labor force(percentageemales 15 )

7,322,564 3.553,',t63,125 -13.79(43.2)1,847,049 9.031.,270,000' -2.31'577,000" 54.50.1 ,783 ,511 2 5 .8 5895,753 4.21885,748 62.57489,851 5 3 .0 52,082,931 24.712,81.9,401, 1.11't,734,908 -1.291,098,418 -9.72510,813 4 .6 2507,459 9.52t ) s ) g g \ 1 " )1,084,493 5.1g2.54 2.001,891,21,1 9.18( 7 1 . r )7 ,695 ,217 l g .0 g(53.7)

7,894,8624 97) SOq(53.0)1,525,745

1,279,630846,731476,913115,8301.,437,0592,835,8722,043,7651,603,397774,496l S l K g )209,006793,1072.741,988,774( 7 . 1 )I,355,554(42.2)

7,071,6393,668,945(5 1 .e )7 ,6 9 4 ,1 2 71,300,1,44393,9831,,406,024850,552545,472300,4061,670,1.992,788,5301.,7 7,5541,203,3875 3 5 ,5 8 1452,933307,7091,030,966. 2.491,732, ' .165(6 e .5 )1,435,533( 4 7 . r )Sorrrce: .S.Census, 970,1980PublicUseMicrodrre amplc i les: 990STFl andSTF3."Estimatedn he basis f 1988CUNYSurvev.

Lat ino and Asian popular ions grew rapid ly, i rs housclro lds werc lessl ikely to be families,and familieswere ess ikely ro have wo parents.Bu twhile the city lost population heavily n the 1970s, he economicboomand mmigrant surgeof the 1980s ncreasedhe populationby 3.6 percent(roughly 251,000). Moreover, the growth of immigrant families haltedthe fall of mean householdsizeand slowed he growth of nonfamily an dfemale-headedouseholds. he popr.rlation ain reversed hreepreviousdecades f decline;more remarkably,New York Ciry gainedpopulationrelative o its surroundingmetropolitan,breaking he pattern of the pre-vious six decades. he white population declineconrinued n the 1980sbut far less apid ly than in the 1970s.During the 1980s, mmigrat ionbrought the number of Latinos almost evenwith the number of blacks,

P O S T I N D U S T R I A L T I { A N S F O R M A T I O N 5 9

rvhilemmigrantsrom china andelsewheren Asiawere he most ap -iaiygto*i{ group, hough til lsmall elativeo theothers'

TIrcNewRaciallEthniclGender iaision of LaborEconomicanddemographicchangesintersectedwiththerapidchangesin,f't. .""t-y and ab]or^marketo produce newpattern f how groupsare istribuied crosshe attice f industriesndoccupations.hewhite,.i inil, blue-collar orkingclass hrank o thepointwheretaccountsor"lrfrro, 5 percent f the ity's adultpopulation. s t agedanddimin-ir-fria,'i* riraleoffspringe.,ie.edmanagerial nd professionalccupa-tions.Minorities, articilarlyLatinos, iplaced etreating hiteswithiniir. ,fr.inf.i"g a.,ufactu.ing abor orce.-Theemalewhite-collar ork-;;; ;i;r; .rp"ond.dgrearly.vhir. womenmake p abouthalf hisgroup,*fii;. btu.t ondotherminoritywomenholdanother uarter.Menmakeup th. rest.)This new pattern s associatedith both growingpovertyandworseningncomenequality' ace, ender,ativity' ndethnicity llplayed .ole n sorting roups cross conomic iches'In broad rerms, [ii., disproportionatelyold managerial, rofes-sional,and clerical obs in construction,ransportation,.inance, d-vanced orporate erviccs,ducation, nd.government'lacks end toholdclerical nd serviceobs n health, ocial ervices'nd government.Latinos reconcentratedn service nd operativeobs n manufacturing,,.riru.on,r, andhealth ervices.n each f these roups'malewh-ite-col-larworkersaremore ikely o be managersr professionalsnd.femalesio be l..i.al workers,whilemaleblue-iollarworkers remore ikely obecraftsmen nd women o be operatives's1Thesebroad Patterns o vary across pecific ombinations f race,ethnicity r nati;iry' andgendei' owever'Amongwhitemales' or ex -;;;l;, ihoreof Jewish niestries restrongly epresentedn theapparelinai,rr.y,wholeJalerade, hecorporate ervices,hilewomenof Jewishancestriesre concentratedn education.5oalesof ltalianancestry redirf.opo.rinnately n construction,ransportation' nd wholesale nd,.,l if it"a.; high proportions f Irish malesmay be foundworking n,rtntpo.r"rionibanking, the bar and restaurant usiness' nd publicr.r"1... Amongblacks, ative-bornmenaremore ikely o be n trans-portation, o--uni.niion, andutil ities ndwomen n education' ociali."r"i*; ;J lrp..i"l ly gou.rn-.nr. Jamaicanmales, n theotherhand,;r. ;;;. l ikeli to b. iln -"n'f"ttuting (cspeciallyf .durable oods)'lonstruction' ndhospitals. imilarly, ominicanmmigrantsremoreiil.ty ,f,"n puerroRicanso work in manufacturingespeciallypparel)o, ,.,,"u."nts and ess ikely o work in health ervices,ocia| ervices,


9/13

6 0 C H A P T E R T H R E Eor government.Somegroupsachieved xtremelyhigh concentrationsn afew industr ies: or example, n 1980,44 percentof a l l Chinesemalesworked as wairers and cooks in restaurants,while 40 percent of allDominican women and 54 percentof all Chinesewomen worked be -hind sewing machines n the garment industry. Even among whites,21 percentof Jewishancestrywomen worked in education,while 15 per-cent of the White Anglo-Saxon Protestantand Irish males worked inbanking.55This pattern of ethnic specializationeflects he mprint left by the ini-tial immigrant generations,hough to be surewith upward and outwardmobility over time.56One can seeJews n the garment ndustry, Italianconstructionworkers, and Irish iremen, hough hey arenow more ikelyto own or manage heir enterprises, r to be craftspersons ather thanoperatives.By looking at where groupshavespread rom the initial con-centrations,one can also sense he trajectories hat prior immigrantgroupshave ollowed. The Irish, or example, ertainlydid not beginwithconcentrationsn investment ankingand corporate aw but usedpoliticsas a springboard o gain access o them. Italiansachieveda similar butlessermobility into these ectors. ewsgainedaccesso investmentbank-ing but evidently not nearly so much entree nto commercial banking.Their specialization n the public school sysremalso led to a compara-tively high representarionn higheredr.rcation.Blacksand Latinos have achieved essmobility into the best remuner-ated and most rapidly growing sectorsof the economy, and there arecontinued ndications of discrimination againsr hem.iTBut blacks andLatinos diverge considerably n their labor-ntarketconcentrations.Re -flecting their higher degreeof political mobilization, blacks are muchmore heavily representedn health, social services, nd public employ-ment. Latinos, on the other hand, remain odged n the decliningmanu-facturing sectorsand have experienced ownward mobility with them.Vomen also ag behind men n gainingprofessional nd managerialposi-tions, with white women positioned bettcr than minority women, anclblack women betterpositioned han Latinas.5sThis new racial, ethnic,and genderdivision of labor has created om-plicatednew patternsof infergroup ension l'rat annotbe summedup ina simple ichotorny ike "management crsus orkers" or "whitesversusblacks."Vhite males f English,German, r ish,andJewish ncestr iest i l lclearlydominateupperpositions n t he economy,but their representationis declining elative o the kaleidoscope f groups hat arestriving o taketheir place.Thesechallenging roupsaredifferentiated y race,ethniciry,and gender.No single nteresr nites hem against he dominant group; tothe contrary,myriad differencesragment hem.

l " 6lP O S T I N D U S T R I A L T R A N S F O R M A T I O NThe Nezu nequalitYAgainst this highly complex mosaic has been aid an increasingly tark;ffi; il;;;it;v:' wr'ii' nlunv people. ntered he labor market' thesrowrhof female-he"i.a "-ifi.t t .p, largeproportioll ^ofblacksan dffi;; ;;;;i i;. D;rpir. ,r'. overall rosp.ritv f the1980s,abor-forceparticipadon"r., a.-.tinti-*ong both^mtnand womenand povertyrose.Thesepoo. ,o-il ies tend Jisproportionatelyo- be native-bornblacks, uerto i."n', unJOo-initont 'iht' th"n immigrantWest ndi-ans r Latine-.rl.on'' ihe people ortedntodecliningndustriesr ou tof the abor o... .*p.ri.n..i ,.ol incomeosses.incewelfare aymentsfor, *r.""a to in{lotion' hepoorest ouseholdsxperienced-thereatestffi.";;il;;;;;;t;i i-n..,.o*. distribution,he urgefe.arningsnmanagerial' .ofessioJal;'";; "t" clerical ccupatio.ns'speciallyhe nassociatedith Wall ;;;; .;"r.d median eal buseholdncomeso rise;;;;;;; iq8or. d; ;h;" of total ncome eceivedv the owest20Dercent f householdseclinedrom 15'4 o 11'6percent etween 97 5ffii;;;, *iil. irtt, of the op 10 percent

ose rom43'8 o 49'Tpercenr'r"Uti"",i"ffy worse han heU'S' rend'5'Rapidly ising .nt, accentuatedhisproblem'Even hough he city'shouseholdsn.r."r.dl f reO,Oooetween 980 nd1988' henetdecl inei n t l r e c i t y , s h o u s i n g s t o c k d i d n o t s t o p u n t i l a f t e r l g 8 3 ' a n d s t t b s e q u enet expansion ia noi '*tth tht household rowth'Sincemorehouse-holdswithmoreincomewerechasinganessen"tial lyf ixedhousingsupplyit wascertain hat rentswouldrise,ent/incomeatiosworsen' nddou-;li;;";-;;J l]otn.l.rrncssncrease.50hoseat the bottomwereat anincreasingompetitrJei'"au"n"gt with allthose bovehem'The esultwas he disproportio;;;;;";;h in Nt* Yorkof whatsome ave alled"theunderclass."5'

The Fiscal ContextLike the restof the New York City economy'he.public ectorexperi-;;;;i;"';; "nd ofttn ttnsettlingl"'""gt' during he 1970sand

1980s'Fourbroadperiods:;;i l;l;;t";uishei for pubiic.f i lt '. in New YorkCity.62 etween1'961 nd 1959'thecity'sbudget oubledn real ermsfrom $8.5bi l l ion n-SJe'Z if l ion in 1982dollars)'63hisgrowthwa sfinanced rimarily tttougtt ocal.revenuesnd ntergovernmentalrans-fersdrawn .om tl',e a']induttd economic oomof theperiodand n-creasedederal ia ro,n',t. K.nn.dy andJohnson dministrations.he


10/13

C H A P T E R T H R E Eshare f Iocal evenuesell rom 57.8 percento 49.0percenr, owever.The share orrowed ose rom 11.5percento 13.gp....nt in the irstyears f the 1950sbut then ell to 9.1 percenr.nrergovernmentalid ,particularlyederal id, hus ose asrerhan hebudgeias wholeor anyof itsother unding ources.Between 969 and 197 , thebudget ontinued o grow at half therateof the 1950s, ut heprevious ourcesf financing id not followsuit. n1982 onstant ollars,hebudget eaked t $2L.7bill ion n 197 . Localrevenueshrankagain rom 49.0 o 42.2 percent f the otalasback-to-back ecessionseducedocal ax ,.u.nu.r. Intergovernmentalid alsodeclinedrom42 percenro 40.4percentn 1973, ccoveringo 44 per-cent n 1.975 s the ciry's iscal traitsworsened.This efleirs majorfalloff n federal id under he Nixon administration,artially ounteredby increasesn state id.)TheLindsay nd Beame dminist iat ionsor -rowed o closehegap, ncreasingheirsharerom9.1percentn 1969 o13.5percentn 1975. Borrowing eaked t 15.1 ercenrn r974.)Th ecity ol led p ncreasinglyarge ebrs,rnrountingo more han$13bil_l ion n currenr ol lars 975 including7 bi l l iori in l .rorr-rermebtat a

timewhen he otalbudget asonly$12.4biil ion). ts nability o pay hisshort-term ebt ed the banks o cur off credit,precipitatinghe fiscalcrisis eriod rom 1975 o 1983._ ln th.is-period,ity spending ecreasedrom $21.1bill ion n consrant1982 dollars o $15.5 bill ion, a decline f 22.2 percenr.Borrowingdroppe-dapidly o7.6 percent f the otal n 19g3.Local evenuesn-creased.rom42.2pefcento 51.5percent f the otal, eflecting.newedexpansionhat took hold n thecity'seconomy fter1977. nt"ergoue.n-mentalaid rose n the mmediare akeof thehscal .iris, ..".i i3g a7.lpercentn 1978,but thendecrinedo 40.9percentn 19g3, erow helevel f late1950s.Most of rhis epresentcdiate ffortso "rri* rhecrry;despite elp rom the carter administrationn 1977 and 797g, ederalaiddecl inedrom $2.5bi l l ion n l97g to $2.2bi l l ion n 19g3 n .ur..ntdol lars.6aThe post-1977economic xpansion et the stage or the renewedgrowthof the city budgetbetween 9g3 o t9g9. ihe growthof rocarrevenres as so strongduring his period lrat he city budget ose nconstant982 ol larsrom$16.5 i l l ion n 19g3 o $20.7 i l l ion n 19g9,or 27,3percent.65orrowing rsoncreasedrom7.Gpercento 0.7 per-cent,.reflectinghe ciry's eturn o the capitarmarkerend its cresireorebui ldrs capital udger. emarkabry,nrergovernmenrarid decrinedeven urther, rom 40.9percento 29.i percentf the otal.Thestockmarket rash f october 9g7 effectiv.ty"rk.d theendoftheboomera n New york city, and ndeedn thenation,and heonserof anew ecessionn 1990.Berweenhemonthof thecrash nd hebegin-

P O S T I N D U S T R I A L T R A N S F O R M A T I O N 6 3ningof 1990, otal New York City employment oseby only 56,000 obs'pub-lic rnploymentgrew by 25,000during this period,while he financialservices eclinedby 5,000 obs.Between he middle of 1989 and the en dof 1991.,otal employment declinedby 190,000,while public employ-mentheld steady.This disparitybetween he privateeconomyand publicpersonnel xpendituresed o renewedand ncreasingly evereiscalprob-lems n 1990 and 1991.Political Implications of the Postindustrial RevolutionTheseprofound changesn the city's economy,society, nd public sectorhad hiee ma or consequencesor the nterestswith which politicalentre-preneursmust nteractas hey seek o constructa victoriouspolitical coa-iition. They altered the size,disposition,and potential nfluenceof theinterestsn the economicand socialenvironments n which politicsoper-ates.Tlrey also created distincfly postindustrial ensionsand conflictsamong these constiruencies. inally, the sharply cyclical nature of thebusiness ycledestabilized ld patternsof accommodationamong nter-estsand opened he way for attemptsat defininga new dominant coali-tion that would help determinewho would benefit rom the economicboom of the 1980s.

Chnnging Const tu enci eThe postindustrial evolution has altered he constellation f interestsn 1{.'the two operatingenvironmentsof politics, he market and the citizenry, ,] 'as well as within the public sector tself. In the marketplace, he 1970s iand 1980ssharpened he distinction between he rising sectors-finance,the other advancedcorporateservices, rivate,nonprofit socialservices,and government-and ihe declining se6ors-manufacturing, wholesal-ing, nd freight transporr. t propelled he former upward and outward,*h i l . d irn in ishing nd displacing he atter.The rising economic constituencies ad a clear, f latent or partiallyexpressed, genda or city politics. The city's corporate eaderswantedcity government o reduce ts tax burden on the private economy,shrinkits'frinctions and employmenrbase, educeseemingly nchecked laimsfor socialservices, nd increase ervices elevant o the privatesectoran dthe middle class.Realestate evelopers nd their nvestment ankersan dcorporate awyerswantedcity government o promoteprivate nve tment-oi. oggr.rsively hrough a capitalprogram that would restore conom-ically rli-evant nfrastructureand through regulatoryand tax incentives


11/13


12/13

66 C H A P T E R T H R E Egroups, or example,West ndians, 'orked in such isingsectors shospi-tals and local government.But even among Wesr lndians, the largestnumber of immigrants worked in the declining manufacturing sectors,where he numericaldeclineof white workers was even more rapid thantheir lossof jobs, creatingopenings or immigranr rvorkers.Their weakposition n the labor market reinforced heir weak political position.Out of this contradictorypatternof declining opulation groupsdomi-nating he better obs n the risingeconomicsectors nd the rising gr


13/13

',/'

C T I A P T E R H R E EThe central problem of racial nequality .rasl'rus aken on a clualita-tively new and more complicated orm. First, the basic dichotomy be -tweenwhiteson one sideand native-bornblacksand PuertoRicanson th eother has been fragmentedby ethnicity/nationalityand gcndcr.7O es tIndian mmigrants differ objectively rom native-bornblacks n economicand cultural terms and competeagainst hem, ust as Latinos do againstblacksand Dominicansdo againstPuerto Ricans.Significant ifferences ivide eachgroup. Gendercan be one such dif-

ference. lack women, for example,are betterpositioned n New York'sclerical abor force and are beginning o gain better entry to managerialand professional obs than black men. More importantly, as the incomeinequalityamong black households asgrown greater, he socialand po-litical distance between he black middle classand the black poor ha swidened.As a result, he relationshipbetween he established lack ead-ershipstratum and a significant ortion of its constituency asbecome armore problematic. mportant assuch divisionsare,however,whether a-tent or overt, they take on political importanceonly to the extent thatactors n the political systemmobilize hem.

P oliti cal D e tabilizsti onFinally, the sharp fluctuation of the business ycle alsohad a major im-pact on New York City politics.As Martin Shefter as argued, his cyclerocked he political systcmand ruptured old patternsof political accom-modation among interests. he downturn of the fiscal crisis put severestress n public sectorproducer nterests, articularly he regular Demo-crat ic organizat ionsand the public employeeunions. This disarrayopened he way, ilter 7977, for new forccs o organizea new dominlntcoali t ion.The post-1977 boom dramatically ncreased oth the conflicts acingthe political systemand the sizeof the resources vailable o rhe nreresrsthat succeededn organizing he dominant coalition.The creationof newconstituencies, he decay of old ones, thc clranging powcr rclationsamong them, and the clashes etween hem exert deep but sometimescontradictory forces on New York City's political systern. he politicalresponses, owever, were deeply shapedby the ways in which interac-tions between he political systemand its electoral,governmental,an deconomicenvironmentshavebeen nstitutionalized. t is to these nstitu-tional patternsand practices hat we now turn.

FourTheRulesof the Game n New York city Politics

In extremely versimplifiederms,here ppearto be at east wo "powerelites" n theCity,aparty-centeredneanda "status" enteredne '(Theodore owi, At the Plea*re of

theMayor)'Thesuccessfuloliticiann New York City ha sto focus n two audiences:rime oters ndcampaignontributors.(Norman dler, o l i t ica lonsultant)rAnalysts . . muststopmistaking thnicity orpolitics;whileethnicitymaybe moreimportanthan lesso voting, conomicssmore mportant o governmentolicythanethnicitY.flim Chapin, Vho RulesNew YorkToday?") l

pnsvlousl-y it has beenargued hat political actorsseek o constructan d-maintirina clominant orl-irion by using city government's elationships*itl., ..nnonlic and political/electoralnterestso win elections nd secure- the coopcration from public and private power-holders equired o gov-' ern. over the last seu.raldecades, ocialchange as altered he natureof^it .r. governmental, sociirl, and economic interestsand created ne wconflicis and tensions among them. These interestsand conflicts ak eon political rnelning, l]n*cu"r, only within a specific ettingof politicalinstitutions and practices.These nstitutional patternsstrongly.mediatethe broaclersocial changesdescribedabove and shapepolitical actors';1.,1.; towards interJsts n the government, he electorate,and th eeconomY.'The critical step toward building a dominant political coalition is towin mayoral electlons. his means ashioningelectoralmaioritiesout of-if,. .o"rriruent elementsof the city's electorate.But having won office,, i . . "yn , and his or her al l iesmust also govern 'To do so' . theymustachieve he active cooperation rom thosewho occupy positions nside

Documents

Mollenkopf Phoenix Chapter 3