May 5, 2009 City Council packet - Laserfiche WebLink

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probably be reduced from its recent peak of 8.3 percent to perhaps 7 percent —I suspect it may fall farther, to perhaps as little as 5 percent, roughly its contribution a generation ago_ in either case, it will be a big reduction, and a sizable portion of it will come out of Manhattan. Lean times undoubtedly lie ahead for New York. But perhaps not as lean as you'd think —and certainly not as lean as those that many lesser financial outposts are likely to experience. Financial positions account for only about 8 percent of the New York area's jobs, not too far off the national average of 5.5 percent. By contrast, they make up 28 percent of alljobs in Bloomington -Normal, Illinois; t8 percent in Des Moines; 13 percent in Hartford; io percent in both Sioux Falls, South Dakota, and Charlotte, North Carolina. Omaha, Nebraska; Macon, Georgia; and Columbus, Ohio, all have a greater percentage of population working in the financial sector than New York does. New York is much, much more than a financial center. It has been the nation's largest city for roughly two centuries, and today sits in America's largest metropolitan area, as the hub of the country's largest mega -region. It is home to a diverse and innovative economy built around a broad range of creative industries, from media to design to arcs and entertainment. It is home to high-tech companies like Bloomberg, and boasts a thriving Google outpost in its Chelsea neighborhood. Elizabeth Currid's book, The ihlarhol Economy, provides detailed evidence of New York's diversity. Currid measured the concentration of different types of jobs in New York relative to their incidence in the U.S. economy as a whole. By this measure, New York is more of a mecca for fashion designers, musicians, film directors, artists, and — yes —psychiatrists than for financial professionals. The great urbanist lane Jacobs was among the first to identify cities' diverse economic and social structures as the true engines of growth. Although the specialization identified by Adam Smith creates powerful efficiency gains, Jacobs argued that the jostling of many different professions and different types of people, all in a dense environment, is an essential spur to innovation —to the creation of things that are truly new. And innovation, in the long ran, is what keeps cities vital and relevant. In this sense, the financial crisis may ultimately help New York by reenergizing its creative economy. The extraordinary income gains of investment bankers, traders, and hedge -fund managers over the past two decades skewed the city s economy in some unhealthy ways. In 2005, 1 asked a top-ranidng official at a major investment bank whether the city's rising real- estate prices were affecting his company's ability to attract global talent. He responded simply. "We are the cause, not the effect, of the real-estate bubble." (-As it turns out, he was only half right.) Stratospheric real-estate prices have made New York less diverse over time,