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1 New York City: The Economic & Fiscal Aftershocks of September 11th James Parrott Fiscal Policy Institute July 17, 2002

2 Fiscal Policy Institute Nonpartisan research and education organization. Focus on broad range of tax, budget, economic and related public policy issues that affect the quality of life and economic well-being of New York residents. FPI’s work intended to further development and implementation of public policies that create a strong, sustainable economy in which prosperity is broadly shared by all New Yorkers.

3 FPI’s 9/11-related Activities Analysis of the 9/11 economic impact Analysis of the fiscal implications for the City and the State Labor market and sectoral analysis for Emergency Employment Clearinghouse Convene/support Labor/Community/Advocate Network to Rebuild New York (LCAN)

4 Economic Impact of the World Trade Center Attack  75,000 lost jobs  Another 75,000 lost earnings City-wide impact; airports and midtown hotels not just south of Canal Street Low-income workers bore the brunt (60%) People of color and immigrants (56%) hard hit Chinatown, “economic ground zero”, and other poor communities heavily affected

5 How FPI’s analyses were used Widely cited in the media Helped set the standard for understanding the economic impact Only report to focus on low-income workers Contributed to Congressional passage of funding for Emergency Employment Clearinghouse Used by relief organizations, including FEMA, to extend benefits to dislocated workers

6 FPI’s Analyses of NYC and NYS Budgets While some of State deficit due to 9/11, more of it a result of overzealous tax cutting in recent years Governor using reserve funds and the Mayor is using massive borrowing and service cuts to balance budgets Next year, tremendous pressure to cut budgets State and City should balance budgets in more balanced and economically sensible manner State needs to assume more of local Medicaid burden and increase education aid to urban districts

7 FPI’s Labor Market, Sectoral & Economic Analyses FPI provides labor market and sectoral analysis to Emergency Employment Clearinghouse FPI tracks recession, unemployment and indicators of household economic stress. Preparing report on State of Working NYC for Sept. to broaden understanding of polarization, structural and cyclical labor market challenges, and needed policy changes.

8 Rebuild Discussions: Challenges and Opportunities At times, appearance of democratic participation, but is it really different? Will July 20 Javits event be different? Public authorities in charge, responsive to Governor and Mayor Voice and clout needed for dislocated workers and low-income communities Officials contend emphasis should focus on physical site; billions in federal dollars are being spent in name of economic development

9 Labor/Community/Advocate Network to Rebuild New York (LCAN) 50+ labor and community organizations endorsed Convened in October by FPI and Central Labor Council to share information, evolved into network to develop common policy agenda for rebuild priorities LCAN Policy Statement launched in April One of major rebuild-related networks, significant participation in the Civic Alliance, MAS Imagine NY, RDOT, Spotlight Coalition

10 LCAN Priorities Use $1B of Community Development Block Grant monies to fund public-private creation of 75,000 jobs Build affordable housing; Lower Manhattan shouldn’t just be playground for the rich As we rebuild, green technology must be used to dramatically reduce the environmental burden

11 What we’re up against Recession, NYC unemployment headed toward 10% City’s economy overly dependent on Wall Street Mounting economic distress: exhausting unemployment benefits, rising household debt problems, record homelessness 9/11 United Services Group reports unmet needs of people affected by 9/11 of $768 million ($700 M for affected workers) City and State fiscal crises worsening Billions in federal resources to rebuild NY economy, but very little going to workers

12 Next Steps for FPI and LCAN For FPI Shift NYC economic development strategy from subsidies to sectors Present alternatives to more fairly balance budgets Capitalize on broader audience for economic analyses For LCAN Impact policy-making and rebuilding public debate through advocacy and organizing Beyond rebuilding, should LCAN continue and address ongoing economic issues?

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