In a piece at Bloomberg dripping with nostalgia but which fails to take the actual New York City of today into account, Brian Chappatta and Elaine He confidently declaim that the rest of the country needs New York City too much for it to decline:
The most difficult question confronting the nation’s elected leaders is how to balance the health and safety of the citizenry on one hand and preventing unnecessary damage to the world’s largest economy on the other. The New York City metropolitan area looms large in that calculation. Data from the Bureau of Economic Analysis put in stark relief just how much New York powered the U.S. economy during its longest expansion in history and provide a crucial starting point to understanding how a lasting bite to the Big Apple could hinder hopes for a swift nationwide recovery.
What they fail to grasp is the dominance to which they point (financial sector, consumer spending) has never been connected so tenuously not just to the rest of the country but to New York City itself as it is today. Let’s consider just one factor: income inequality. Income inequality In New York City is the fifth highest in the U. S. Higher than Chicago. Higher than Washington, DC. And when you consider the metro area (rather than the city itself) the situation is even worse. That is lopsidedly due to the financial sector and the financial sector has never been more portable than it is now. It doesn’t need the infrastructure. It doesn’t need the people. It doesn’t need the city.
What that means is that those big spenders can pick up and leave New York City behind and all of that spending will go with them, leaving a lot of much poorer people behind.
Dig deeper into New York and you find that the other sectors on which New York’s economy depends, e.g. the apparel industry, have taken an enormous hit from the lockdown. It’s far too early to predict how much or whether the sectors will recover.
I couldn’t agree more, and they are leaving.
“the financial sector has never been more portable than it is now.”
You betcha. A guy who owns a New York hedge fund built a new building in my Colorado ski town about three years ago and moved himself and all his 150 employees out here.
And that was before the pandemic taught us that people who sit a a computer all day can work from anywhere…
I made the choice to not live in a large city. I do like living close enough so that I can take advantage of the cultural events, sporting events and such. Can we do without them? I dont know. Since very large cities seem to be common in many countries I assume they offer a lot of advantages to make up for the higher cost of living or they wouldnt exist. Has that substantially changed? It looks to me like big cities survive big natural disasters pretty well, and since these riots arent likely to happen again for a long time. The bigger change may be Covid and future pandemics. It does look like density may be a factor.
Steve
The reason the New York City metro is so dominant is geographic. It has a superb harbor, and it is on one end of what once was the only practical route into the interior: up the Hudson and Mohawk to the Great Lakes and the central plains. No other city on the east coast has those advantages. Even today, anyone in Europe and points east and south who wants to trade with the US must go through NYC. That is the primary economic foundation of the region.
NYC has also accumulated enormous cultural assets over the years. No other city in the New World had such a rich collection of art and architecture, music, museums, orchestras, theater companies…
New York may go into a decline of sorts, but its natural advantages and cultural heritage means that it will always be America’ First City. It will even outlast the US, itself, as Rome outlasted the Roman Empire.
PS. I grew up in inner city Boston (Dorchester), so I have some understanding of a city’s underside. But now, due to circumstance, I live in north central Ohio, adjacent to Amish country. I would not live anywhere else.
So, the future of New York City is living in the past? The Metropolitan Opera is without peer in the U. S. but the CSO is a better symphony, the Art Institute is as good a museum as the MMA, Chicago’s urban architecture is better, and the primacy of Broadway is in the past.
This history of cities is nothing lasts forever.
Rome was replaced by Constantinople. Chang’an was replaced by Beijing. Kyoto by Tokyo. Montreal by Toronto. Shanghai by Hong Kong, and maybe Hong Kong by Shanghai or Singapore. Philedelphia by New York.
The party always ends.
This should be a moment of dread, a cities decay is always associated with massive social / economic turmoil, and is usually non-recoverable.
I have a relative in the apparel industry in NY – she’s a fashion designer for a well-known brand popular with upper-middle-class women. She’s furloughed and that company is likely to go under.
And I agree with CO. There’s no Iron Law that NYC will retain its status.