The editors of the New York Times ask a very good question. Why are New York’s small stores closing?
In his classic 1949 essay “Here Is New York,†E. B. White described the city as “a composite of tens of thousands of tiny neighborhood units,†each “virtually self-sufficient†with shops that met most residents’ basic needs, from groceries to shoes, from newspapers to haircuts. Every neighborhood was so complete, White wrote, “that many a New Yorker spends a lifetime within the confines of an area smaller than a country village.â€
Nearly seven decades later, that observation is still largely valid, but it is being sorely tested by a scourge of store closings that afflicts one section of the city after another, notably in Manhattan and parts of Brooklyn. This plague has been underway for several years, but its familiarity does not diminish the damage inflicted on the economic and the psychic well-being of neighborhoods. One by one, cherished local shops are disappearing, replaced by national chains or, worse, nothing at all. To borrow from Tim Wu, a Columbia University law professor who has examined the issue, “Blight extracts a social cost.â€
I think the answers are obvious and the problem may be the opposite of what they suggest: costs create blight.
Small, local stores are suffering from a combination of taxation, big chains and their billion dollar advertising budgets, and e-commerce.
City governments are rapacious. Their requirements for money increase even when their populations shrink, cf. Detroit, St. Louis, and Chicago. To get those funds they impose higher taxes which induce a positive feedback loop.
There’s one obvious remedy to the problem unmentioned in the editorial: end the sales nexus requirements for levying local sales taxes on e-tailers. But that’s just a patch.
What we should do is decide what sort of country we want to be and effect the policies that will do that. If we want to be a country with only a single retailer (that would be Walmart, not Amazon), just continue to do what we’re doing. If we want to be White’s country of tiny, self-sufficient neighborhoods, impose those policies which would include high city earnings taxes and ends to transport subsidies.
“impose those policies….” Where’s the Stalin we need for Chicago?
NYC is not a representative city, and should not be lumped in with others — its problems and solutions are pretty much unique. It’s very common to lump all of America’s cities together, but each of the major metropolises have their own character (San Francisco struggles with Prop 13, for instance which is unlike what any other has to deal with; Chicago is its own special hell hole)
Anyway, small businesses in NYC don’t struggle with taxes so much as they struggle with rent. The taxes may be high, but the rent is higher and rising faster.
One of the components of rent is tax (as explained in the linked NYT article).
A small, relatively stable component.
? The percentage of immigrants in the U. S. population has doubled over the period of the last 25 years. That defies any definition of stable. More than 15% of the population are immigrants. That isn’t small.
IMO the gravest problem we have is poverty among inner city black children. For me that’s an issue that should have our attention. It’s difficult, persistent, and cries out to us morally. Unfortunately, continuing immigration of unskilled or low skilled workers is making that problem intractable. Similarly, poverty on Indian reservations is a grave problem which immigration is aggravating.
Wrong thread, sir.