Tuesday, November 29, 2011
Brooklyn is better but will never be "back"
From City Journal:
The problem is that these boutique businesses have a limited impact on the borough’s total economy. For all their energy and creativity, Brooklyn’s young entrepreneurs tend to have few employees, and they’re not likely to be hiring large numbers in the future. The factories of the past employed hundreds, if not thousands; Dumbo alone once had three firms that each employed more than 1,000. Today, Etsy, one of the area’s more successful companies, has a staff of just 180. The old Brooklyn Navy Yard now rents space to 275 businesses, employing 5,800 people. That’s an impressive rise from 3,600 in 2001, true. But compare it with the Yard at its World War II peak, when it had 71,000 workers, or in 1959, when it employed “only” 15,000. Even Brooklyn Brewery has only about 50 employees, small potatoes when you consider that Schaefer Beer’s Brooklyn factory—now a luxury building called Schaefer Landing—once had 1,000.
There are numerous reasons for the disappointing employment stats. For one thing, Brooklyn’s young companies often appeal only to niche markets, usually people like their owners. For another, they benefit from the technology-improved productivity of manufacturing throughout the United States; it takes fewer workers to produce beer or chocolate than it did in the past. And if the firms do grow and hire a lot more workers, chances are that they’ll relocate. It’s extremely expensive and endlessly aggravating to transport raw materials into, and finished products out of, a borough strangled by the Brooklyn-Queens Expressway. Young businessfolks also face the familiar hurdles of all New York City firms: high taxes and burdensome regulations. It’s enough to bum out even the most idealistic hippie-entrepreneur.
Brooklyn’s story, then, doesn’t lend itself to a simple happy ending. Instead, the borough is a microcosm of the nation’s “hourglass economy.” At the top, the college-educated are doing interesting, motivating work during the day and bicycling home to enjoy gourmet beer and grass-fed beef after hours. At the bottom, matters are very different. Almost a quarter of Brooklyn’s 2.5 million residents live below the poverty line—in the housing projects of East New York, in the tenements of Brownsville, or in “transitional” parts of Bushwick and Bed-Stuy, all places where single-mother poverty has become an intergenerational way of life. Between 2000 and 2010, the percentage of the area’s population on welfare did decline markedly, but the number of Medicaid recipients almost tripled, to nearly 750,000. About 40 percent of Brooklyn’s total population receives some kind of public assistance today, up from 23 percent a decade ago.
To make matters worse, according to Crain’s New York Business, Brooklyn’s unemployment rate doubled between 2008 and 2009, a considerably higher rise than in Manhattan, Queens, or Staten Island. When manufacturing jobs do become available, they tend to require skills that high school graduates—and dropouts—lack. East New York and Brownsville also remain the highest-crime areas in New York.
And no one believes that’s transitional.