New York, NY —
But as WNYC’s Andrea Bernstein reports, the city economy is weakening, the next Mayor will face a $3 billion budget gap, and all those promises may not be so easy to keep.On the corner of Wall Street and Broadway: Malik Kahn sells bananas, peaches, mangoes and other fruits lined up in bright piles. He shakes his head as a customer hands him a quarter. He says in the last month business is down.
Kahn very bad…like about you can say 75 percent down. I think its ah the stock affect me right away because I’m outside the stock, and the people buying $1 worth of bananas, they’re spending $2 everyday now they’re spending 25 cents for one banana
Kahn lives in Queens, with his wife and three year old son.
7 before we go out for dinner once in a week, now we don’t go out we don’t have that much money to go out, I hope it’s going to get better. I’ve worked on this corner 9 years, never I’ve seen it this bad.
A few blocks away Georgie Marcopoulos sells hotdogs and sausages on the corner of William and John Street, not too far from the New York Stock Exchange. He prepares a hot dog for a man in a business suit, then waits for his next customer.
Marcopoulos: I’m starting 35 years ago, this place over here, it used to be gold down here you know, at lunchtime, you don’t see the sidewalk for the people, so crowded,
People in this area are losing their jobs – thousands so far this year, and more layoffs are expected. There are other signs, too, of the economic slowdown on Wall Street. Ronnie Lowenstein works in one of the towering office buildings that line the canyons of lower Manhattan.
Lowenstein: when we moved into this building it was ¾ empty and it was terrific because you could always get an elevator it was my local economic indicator...
Ms. Lowenstein is the director and chief economist for the Independent Budget office.
(continued) then about a year ago, it was my understanding it was fully rented, rents had gone up significantly, they spiffed up the building a lot, and you had to wait for elevators and now all of a sudden its not as bad as it was a year ago.
Ms. Lowenstein says there’s no question an economic downturn is upon us.
James Parrot, the chief economist for Fiscal Policy Institute, agrees. And he says a downturn on Wall Street has a disproportionate affect on the city’s economy. Parrot: these are very high wage jobs, the average wage in the securities industry is over 200,000 dollars a year, four times what the average wage is in New York City. That means bonus payments are going to be less, that means consumer spending is going to be less and real estate spending is going to be curtailed before long.
There are other indicators. High-end restaurants say business is off 30 percent. Hotels are wondering what to do with empty beds And there's less money in the city’s tax coffers – less money to spend on all the things the candidates for Mayor and City Council and all the other offices are promising In fact, even if things don’t get any worse, the current city budget predicts the next mayor will face a $3 billion hole, according to economist Lowenstein.
Lowenstein. Unless something very dramatic happens nearly instantly and there’s no indication that it well because if anything the U.S. numbers are eroding…they’re going to have immediately find ways to retrench and that’s not a happy place to be particularly if you’re a new administration having been elected making lots of promises to people.
Aside from a drop in tax revenues, there are other problems looming. Just as federal time limits on welfare begin, rollbacks in federal funding for public assistance and police are expected. City police and teachers have no contract and other city workers also want a raise. But there may be one ray of hope. The situation isn’t likely to be as bad as it was in 1990 says Marsha Van Wagner, chief economist for the citizen’s budget commission.
Van Wagner: The situation is not as dire I don’t think, no one would have predicted when Dinkins came into office, that the next year the city would lose 190,000 jobs, which is what happened in 1991. I don’t want to look foolish by saying we don’t have to worry this time around. I think its unlikely we have that kind of a downturn.
That’s an economists way of being optimistic. And for now, that may be all the candidates can hang on to. For WNYC, I’m Andrea Bernstein.