Jobs for All New Yorkers, Growth for All Neighborhoods

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    INTRODUCTION

    Today, New York is a tale of two cities. On WallStreet, life couldnt be better. A recent study reportfound New York City is home to more than 389,000millionaires. We have three times as manymillionaires as Los Angeles more, in fact, than LosAngeles, Chicago, and Houston combined,1 with 5%of our citys population able to call themselvesmillionaires.

    Yet also in New York, one-in-five New Yorkers livesin poverty. When you include those who earn lessthan 150% of the poverty threshold, nearly half of allNew Yorkers live near or below the poverty level.2

    Economic development policies in recent decades in

    New York City have been tilted towards creating jobsfor highly-educated professionals and growth inservice sectors that produce jobs that, under presentconditions, fail to pay a living wage. As thePartnership for New York City observed last month,job growth is primarily in high-wage and low-wagecategories. The city is experiencing a loss of middle-wage jobs and middle class households.3

    To its credit, the Bloomberg administration has takensteps to move the city from dependence on the so-

    called FIRE (financial, insurance, and real estate)sectors to expand support for high-tech and otherhigh creative capital clusters like media and fashion.

    The growth of the high-tech industry has been thebest reflection of that shift in priorities. New York CityIT jobs grew 60% from 2003 to 2012 and more techcompanies are choosing to relocate to the city from

    other places.4 Cornell NYC Tech, to be located onRoosevelt Island, is a symbol of new growth forcreative capital industries and the goal of usingapplied sciences to act as a commercial incubator fornew business growth in the city.5

    However, while many of these Bloombergadministration initiatives are welcome, they havefailed to improve the lives of most New Yorkers. Arecent report by Borough President Scott Stringer,Startup City, highlighted both the gains in the techsector and the gaps in public policy that have leftmost communities out.6 Our other industry sectorsand small businesses particularly those in theouter boroughs are, at best, ignored, and at worst,

    under siege by policy decisions of the Bloombergadministration.

    A significant portion of high-wage jobs created in therecovery have gone to talent recruited to the city rather than the large unemployed population alreadyin our neighborhoods. Take health care: New YorkState has recruited 16,000 overseas-trained nursesto work in NYC a glaring failure to create healthcare career paths for NYC residents.7 The result ofthe lack of jobs for many native New Yorkers: 15.8%

    of New Yorkers are estimated to be without a job orinvoluntarily working part-time, nearly double theproportion in 2007. 8 NYCs poverty rate is 22%higher than when Mayor Bloomberg took office.Median income declined 6% between 2008 and2011.9

    The City needs an economic development policy that

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    balances investments in the so-called knowledgeeconomy maintaining our leadership as a magnetfor global talent with catalytic support forentrepreneurs in new and neglected industries of thefive boroughs, real investments in creating careerpaths for indigenous New Yorkers and a focus onraising wages for all workers in the city. The prospectof a city without a middle-class is too frightening to dootherwise.

    We need to build a diversified economyin all boroughs & create jobs for all NewYorkers.

    We need a dramatic change that focuses onconnecting New Yorkers to jobs in the newknowledge economy, while at the same time,improving the quality of traditional service, tourism,

    hospitality, retail and manufacturing jobs and workwith small business leaders in the whole array ofindustry clusters scattered across the boroughs. Toget there, the Public Advocate is proposing that:

    The City should further reform and reduceeconomic development subsidies aimed atindividual companies like Fresh Direct andinstead invest in a 21st century workforcedevelopment system and redirect theseeconomic development dollars into investments

    in emerging sectors and neighborhoodentrepreneurs.

    The City should reinvest and restore the CityUniversity of New York (CUNY) to its historic roleas the preeminent pathway to opportunity for anew generation of immigrant and low-incomeNew Yorkers. A streamlined workforcedevelopment system should link students in highschool and university directly to workplace

    mentoring, apprenticeships and good jobs. TheCity should work with industry clusters to identifytheir workforce needs, and connect job-seekingNew Yorkers with sponsored training andeducation programs that lead to jobs.

    The City should establish a revolving loan fundfor small and growing neighborhood businessesand create economic job creation hubs in everyneighborhood to act as loan officers.

    The City should help small businesses markettheir services and goods to larger institutions inNew York, including the City government itself,as well as supporting coordinated exportstrategies outside the City. The ticketing war onmom-and-pop shops needs to end; instead, theCity should be providing the training and supportfor small businesses to navigate licensing andregulatory requirements, develop the businessplans, secure the financing, and choose thebusiness entity form that will allow them to growinto the future.

    The Citys economic development policy shouldemphasize improving the quality of low-wageservice jobs. Sometimes the most effectiveeconomic development tool is a larger paycheck.Every extra dollar taken home is money spent atthe local bodega, at the local barbershop orsalon, and for other local services, creating avirtuous cycle of local job creation. That meansensuring security for all workers: a living wage formore New Yorkers, stopping wage theft prevalentin low-wage industries, and establishingresponsible contracting rules to leverage theCitys potential to improve job quality forhundreds of thousands of New Yorkers.

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    1.REPLACE WASTEFUL TAX EXPENDITURES AND CORPORATERETENTION DEALS WITH A NEW ECONOMIC DEVELOPMENT FOCUS

    New York City currently spends around $4 billionevery year in the name of economic development between $500 million and $1 billion in operating

    budget outlays, $3 billion in tax expenditures, andseveral hundred million in capital budget outlays tosupport economic development. Tax expendituresinclude exemptions and abatements for residential,industrial, and commercial development,discretionary tax reductions offered to specificprojects, reductions on city business and incometaxes for particular industries and activities, and tax-exempt financing. Tax expenditures have beengrowing much faster than the overall tax base:business tax expenditures grew 192% since 2001,

    even as tax collections rose only 90%.10

    While some of this economic developmentinducement has been effective, far too much hasgone towards wasteful subsidies of individualcompanies. In a 2004 deal, Bank of America, thenations second largest commercial bank, receivedmore than $42 million in City subsidies in a deal formidtown Manhattan office space.11 In 2005, GoldmanSachs downtown headquarters was the beneficiaryof a $115 million in sales and utility tax payments,

    and annual property tax discount of $9 million everyyear. 12 More recently the City's IndustrialDevelopment Agency offered $74 million in City taxbreaks to Fresh Direct to expand their presence inthe Bronx after the company pitted New Jerseyagainst New York to extract a maximum subsidy.13Even the Partnership for New York City, New YorkCitys high profile business advocacy group,

    describes current NYC economic developmentincentives as obsolete and poorly targeted.14

    End a Notorious Example of PoorlyTargeted Incentives: The Industrialand Commercial Abatement Program

    One notorious example of New York Citys poorlytargeted economic development incentives is theIndustrial and Commercial Incentive Program (ICIP),recently replaced by the Industrial and CommercialAbatement Program (ICAP). These programs providetax breaks for rehabs or new construction ofindustrial, commercial, or mixed-use structures in

    designated areas. Subsidies flow overwhelmingly tooffice buildings and commercial retail projects, withonly 9% of the exemptions and 3% of the value goingto factories.15 Manhattan properties account for thelargest share of ICIP value by borough (35%),16 andwhile ICAP reduced the eligibility of Manhattanproperty in recent years, large Manhattan commercialbuildings can still receive tax breaks for renovation17or the construction of smart buildings. 18 Itsquestionable whether most of these subsidies arenecessary to induce any economic activity at all.

    According to a 2007 study by NYCEDC, more than75% of the projects receiving subsidies, worth over$2.8 billion, would have gone ahead even in theabsence of a subsidy.19

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    In its current form, the ICAP program isnt worthsaving and should be eliminated and replaced with anew less expensive, more narrowly targeted incentiveprogram that meets the following criteria:

    does not provide subsidy for projects in thecentral business district in Manhattan.

    targets emerging sectors and non-retailcommercial and industrial investment in the outerboroughs.

    has a reasonable benefit period which does notdeprive City of revenue beyond what isnecessary to induce desired economic activity.

    requires LEED certification or a city-certifiedequivalent for benefits for the construction of newbuildings.

    does not provide inflation protection for propertyin appreciating areas. requires all developments to make a showing of

    need demonstrating that the project would not beviable absent a property tax exemption.

    In addition, the City should increase auditing of the7,240 existing ICIP and ICAP beneficiaries whoreceive $662 million in tax breaks each year toensure that the use of the property remains eligiblefor exemption.20 A 2005 audit by the New York CityComptroller found that 14% of a random sample ofcurrent ICIP beneficiary projects was being usedpartly or entirely for ineligible purposes.21

    Eliminate Wasteful EconomicDevelopment Tax Expenditures, savingthe City at least $250 Million per Year

    Beyond reforming ICAP, Public Advocate Bill deBlasio is proposing a broad-based reform of tax

    expenditures and other subsidies, including thoseadministered through state authorities. This reductionwould be performed in conjunction with the creationof a new Unified Development Budget, to replacethe alphabet soup of existing and conflicting subsidyprograms which would require uniform reportingrequirements, including job creation metrics, for eachtax expenditure and economic developmentincentive.

    To guide these reductions, City officials shouldperform an analysis of each tax break and economicdevelopment incentive to determine what percentageof projects and investments would have occurredabsent the subsidy. The City should ensuredevelopment in high-demand areas remains on thetax rolls and resist pressure from large developersrequesting tax exemptions.Use the Money Saved for a BroaderEconomic Development Agenda

    Through reform of the current wide range ofeconomic development programs and eliminationof programs with notoriously weak payoffs like ICIPand its successor ICAP the City should be able toreduce use of business tax expenditures and othersubsidies, and free up $250 million per year aconservative target that is currently less than 5% of

    New Yorks tax expenditure budget.

    As the rest of this paper argues, what the City needsis not slightly more focused tax giveaways butinstead a much broader economic developmentagenda which shifts the focus from investing inretention deals to investing in the City workforce andneighborhood industry sectors, which will ultimatelysustain the economy into the future.

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    2.NEW YORK JOBS FOR NEW YORKERS: CREATE A WORLD-CLASSEDUCATION, TRAINING AND JOB PLACEMENT SYSTEM

    The Bloomberg administration has an admirablerecord in building a city attractive to educatedworkers. New York City gained 224,000 college age

    graduates in the 25-34 year old age group between2000 and 2010, a stark turnaround from the loss ofcollege graduates during the 1990s. MayorBloombergs focus on creating quality public space,greening and upgrading the citys transportationinfrastructure, and improving its attractiveness tocreative workers has played a significant role in thissuccess.

    Unfortunately, analysts estimate that anywhere from65% to as much as 98% of these new college-

    educated workers grew up outside the City.22 Thefailure of New York to produce its own educatedworkers is depriving innumerable young andunemployed New Yorkers of even the hope ofimproving their lives. Aside from a few worthyinitiatives too focused on job readiness, in thewords of the Center on an Urban Future, theBloomberg administration has had only limited focuson job training and building the skills of the cityslabor force.23

    Shifting the focus of workforce development tocreating an education and training system thatconnects youth and the unemployed directly to realjobs has to be one of the top priorities of the nextmayor. The City needs to better connect our publiceducation system, our workforce training systemsand our economic development programs to create afar more cohesive system that educates and trainspeople fortodaysjobs and the jobs of the future.

    Restore CUNY as the Central Gateway toa Quality Education and a Good Job

    Decades of state and city disinvestment haveundermined CUNYs historic role as a stepping-stoneto the middle class for more than a generation ofworking class youth and recent cuts since 2008have done even more damage. In the last twodecades (from FY 1990/1991 to FY 2010/11), whenadjusted for inflation and FTE enrollment, direct stateaid by the state to CUNY senior colleges declined by35.4%, while aid to CUNY community collegesdeclined by 32.7%.24

    We need to reinvest the proceeds of reforming NewYorks economic development subsidy programs tobegin to restore the cuts to CUNY over the pastdecade and put CUNY on a more solid footing toprovide high quality and affordable higher educationfor all New Yorkers.

    The City must also strengthen CUNY programs thatcan bring under-represented populations intotechnology and other key, high-paying sectors of theNew York economy. A good example is Borough

    President Scott Stringers proposal for what he callsSTEM Cell, an initiative to enroll a wide range of highschool graduates in two-year STEM degree programsat CUNY in order to place them in the middle skilljobs in the citys tech industry. 25 In addition, asBorough President Stringer proposed, the City, inconjunction with New York State, should offer ascholarship to students in tech fields if they promise

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    to stay in New York City to work or start a businessfor five years after graduation.

    The City should have a goal that within eight years,the majority of skilled technology-related jobs in NewYork City are hiring those educated in New York Cityschools because our schools and education

    programs are turning out desirable, highly qualifiedapplicants. We need to ensure that a tech industryboom for New York is also an employmentopportunity for its young people.Create an Integrated Training and JobPlacement System Connecting Careerand Technical Education High Schools,CUNY, Economic Development Hubs, andBusinesses

    A restored CUNY can become the centerpiece of aneducation and training system that aligns job creationin industry sectors with education in our publicschools, specialized training at CUNY, andapprenticeship programs for non-college bound youthand adults.

    Particularly in his last term, the Bloombergadministration did oversee an expansion ofsecondary and post-secondary educational systems,including new, dedicated Career and Technical

    Education (CTE) high schools and vocationallyoriented degree programs at CUNY. Yet too manyCTE schools are not aligned with projected industrygrowth sectors, as the Public Advocate detailed in a2012 report, and no data is officially publishedtracking whether CTE students are finding jobs intheir desired field.26The City should expand CTE programs to bring themin line with job projections and industry workforcedemands. City agencies and economic development

    hubs should develop internships and apprenticeshipsand, where possible, establish commitments bybusinesses to hire graduates of CTE and relatedCUNY programs. No one should graduate from anyCTE or CUNY program without a plan to get a joband the City should track the success or failure ofeach program in delivering relevant jobs forgraduates.

    Ensure Lower-Skilled Workers HaveAccess to Comprehensive Training,Apprenticeship and Job PlacementPrograms

    If workforce development programs for students andhigher-skilled workers are often uncoordinated, those

    for lower-skilled workers often have almost nosystem at all. As one national report put in, jobtraining programs for less skilled workers are acollection of programs and initiatives, each with itsown different governance, funding streams, rules,and culture.28

    The City should bring local business, education,community, labor and agency leaders together tocreate an integrated local workforce developmentand job placement systems. The City should work

    with stakeholders in each industry sector to developshared funding streams to meet their workforceneeds and upgrade skills across each sector. Auniversal workforce development database shouldtrack provider and agency performance, as well asindividual outcomes for every person using cityservices, to ensure there is no wrong door for jobseekers, workers and businesses.Community-based organizations have pioneeredsome of the most effective and innovative programs

    for placing less skilled workers, or workers of specialpopulations like the recently incarcerated or thephysically disabled in jobs, but they often lack bothconsistent funding or the scale needed for broaderimpact. The City should more effectively integratetheir work into city-based programs like Workforce1,via referrals and a reformed compensation system.

    The City should also work to replicate in new sectorssuccessful industry-linked training and apprenticeshipmodels, such as the GPRO program29, which brings

    together labor unions, government officials, businessleaders, environmentalists and CUNY educators totrain the workers who build, renovate, and maintainbuildings in principles of sustainability andconstruction techniques, how to use resources moreefficiently, and how to make buildings healthier foroccupants. Other key models to replicate include theBronx-based Per Scholas program 30 , which trainsand places between 400 and 500 low-income youth

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    and adults in entry-level information technology jobs,and the Brooklyn Networks program 31 which workswith large companies like Time Warner Cable toprovide industry-certified training in blue- and gray-collar jobs in telecommunications data cabling.

    Train 16,000 New Yorkers for Nursing

    Positions and Create ComprehensiveCareer Pathways in the Health Sector

    Health care will remain one of the largest sources ofexisting and new jobs in New York. There are over600,000 private-sector jobs in the health and socialservices field in New York City, the second largestprivate industry by employment after professional andbusiness services.32 Nationally, most of the fastestgrowing occupations are medically related in someway, from lower-skilled home health aides to

    physician assistants to medical scientists.33

    New Yorkers should be trained for the estimated16,000 nurse positions currently held by overseas-trained temporary guest workers, so that within eightyears, graduates of New Yorks public high schoolsand CUNY are filling all available RN jobs.34 Morecomprehensively, the City should create long-termjob opportunities for training and for all health careworkers in the industry to upgrade their skills andincome.

    Currently, the City is not meeting that challenge. Asthe Public Advocate documented in his report onCTE schools last year, jobs in health science willincrease 17% by 2018, yet this career cluster isranked fifth in number of programs offered in NewYork City schools. 35 There are encouraging newmodels such as the 650-student Health, Educationand Research Occupations (HERO) High School,where students can earn an associate degree andhave opportunities for work experience at Montefiore

    Medical Center, which can translate when theygraduate into employment as registered nurses orcommunity health workers. 36 This kind of modelneeds to be replicated across the health sector.

    New York should also play a critical role at thejuncture of health care and information technology.Mobile health apps alone were expected to bring in

    $1.3 billion in revenues in 2012 and, as highlighted inBorough President Stringers report on thetechnology sector, the last year saw the creation ofthe Citys first consumer health and wellnessincubator and the creation of the New York DigitalHealth Accelerator.37 New York residents should beprovided the training to benefit and be placed in newjobs created in this sector.

    Help Manufacturing Thrive In New YorkCity, Including Nurturing the EmergingAdvanced Manufacturing Sector

    Manufacturing remains a vital part of the New YorkCity economy and provides living wage jobs for76,000 workers, many of them without a collegeeducation. The Bloomberg Administration hasoffered some support to the industrial sector, from

    creating an industrial desk at the EconomicDevelopment Corporation and creating a specialprogram to finance and support food manufacturers,to support for the manufacturing incubator in theBrooklyn Navy Yard. But these modest measureshave been inadequate to stem the loss ofmanufacturing jobs: Since 2000, the City has lostmore than 100,000 manufacturing jobs, nearly 30,000in Brooklyn alone.38

    There are a number of steps the City can take to

    build on that program, including (1) reforming thezoning code to preserve the physical integrity ofIndustrial Business Zones (IBZ) from encroachmentby superstores, hotels offices in industrial areas; (2)stopping illegal residential conversions of industrialareas; and (3) supporting individual IBZs with betterinfrastructure and workforce development planning.The City should also replicate the success of theBrooklyn Navy Yard in other industrial areas ownedand managed by the City.39

    New York City innovators have been at the heart ofthe rise of so-called 3D printing, where small batchmanufacturing will be increasingly possible. Amanufacturing technology that places a premium oninnovation, rather than access to mass-scaleindustrial space, plays to the Citys strengths and withthe right economic development policy, can be anadditional source of good jobs in the future.40

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    Ensure that All Public Contracts,Particularly Construction Projects,Promote Workforce Development andJob Placement for Low-income Residents

    Construction projects remain a source of good jobsfor workers and continuing to open them up to low-

    income and minority employees should be a priority.

    New York state law contains explicit authority forlocal governments to adopt so-called ApprenticeshipUtilization Requirements (AURs), which stipulatesthat contractors hire apprentices to perform a certainpercentage of labor hours on a given publicly fundedproject.41 Every major construction project or otherservice procurement by the City should includerequirements that some percentage of the workinclude an apprenticeship component, drawing

    primarily on apprenticeships from the neighborhoodwhere the work is to be performed. This wouldprovide hundreds of millions of dollars in workforcedevelopment support for the Citys unemployed andlow-income workers.

    The New York City Housing Authority (NYCHA), for

    example, is required under federal law to use federalhousing funds it receives to maximize economicopportunities for low-income New Yorkers,particularly public housing and voucher residents.The City should adopt the recommendations of theCommunity Service Society to encourage moreagencies receiving housing funds to createapprenticeship programs and open up jobs with newcity-funded construction projects to NYCHAresidents. In addition, NYCHA should open up moreof their job hiring to Section 8 voucher residents.42

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    3.USE SECTORAL STRATEGIES TO DIVERSIFY NYCS ECONOMICBASE AND BRING JOBS TO NEIGHBORHOODS IN ALL FIVE

    BOROUGHS

    The Bloomberg economic development team has

    made identifying industry clusters an important part oftheir work. Many of these clusters have given theirown industry desk at the New York City EconomicDevelopment Corporation. However, the bulk ofthese new programs have benefited college educatedentrepreneurs in fields such as technology, fashionand media, argues the Center for an Urban Future ina recent report. Few of NYCEDCs programs havefocused on supporting low-income, native-bornentrepreneurs.43

    The City should add more focus on the strengths ofthe other four boroughs, expanding andstrengthening existing City programs to support: thefood processing industry in Brooklyn serving ourCitys diverse culinary communities, the small exportfirms tied to the two major airports in Queens, healthservices in the Bronx, the maritime services industrycentered in Staten Island, and all the other smallerclusters of firms across the five boroughs. We want toprovide the support that can grow jobs and raisewages in industries too long dismissed as low-wagebackwaters.

    Create Economic Development Hubs inEvery Neighborhood to Coordinate LocalJob Creation Efforts

    No one model can be applied to every industry; eachrequires active engagement with the stakeholders inthat industry and neighborhood. In recent years, the

    Citys economic development resources have failed

    to reach most neighborhoods and the industries tiedto those neighborhoods.

    The City should work with stakeholders across thehundreds of thousands of businesses and diversity ofindustry clusters in our neighborhoods to assess howdifferent industry clusters functions, where theirsupply chains go, what financing is available, wherethey recruit employees, and what services andsupport will help each business grow and become ahigh-productivity, high-wage part of the city economy.44

    The City should establish Economic Developmenthubs in every neighborhood throughout the City tohelp map the economic assets, industries, humanresources and needs in each community and how thebusinesses in that community fit within the largerNew York City economyand how they couldparticipate more expansively with the propereconomic support. By having economic developmentstaff working and living in those neighborhoods,walking the streets daily, and meeting with localbusiness, community and educational leaders, theCity would develop an industry map as seen from theneighborhoods of the City, not just from a centralManhattan desk. In Pennsylvania, which has one ofthe most advanced systems of industry partnershipprograms in the country, their industry clusterprogram actively engages with and serves more than6,000 employers and tens of thousands of employees

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    in different industry clusters.45

    Establish New Revolving Loan Funds;Use Local Economic Hubs as LoanOfficers for Targeting Loans forNeighborhood Entrepreneurs andNeglected Industry Clusters

    Debt financing is the lifeblood of most smallbusinesses, yet the last decade has seen nearly a10% decline in small business lending as a total of allbusiness lending. 46 Especially in the wake of thefinancial crisis, banks have moved away fromcommercial loans, leaving businesses with feweroptions for startup and expansion capital. This is aparticular barrier for low-income entrepreneurs, whohave fewer options for loans from family and friendsto get financial support.47

    New York City should establish new revolving loanfunds targeting low-income neighborhoods thatsupport growing industry sectors, with neighborhoodeconomic development hubs acting as loan officersto identify and promote promising local candidates forloans in partnership with private lenders interested inco-investing. The NYCEDC already administers asmall federally-funded loan program called the NewMarkets Revolving Loan Fund. Chicago offers loansof up to $50,000 through local partners,48 and Kansas

    City, Missouri targets a third of its business micro-lending to distressed areas of that city.49 Through itspensions, the City offers loans for housing and someinfrastructure, but the City should use both existingeconomic development funds and pension funds tocreate significant funding for these neighborhoodrevolving loan funds. The City should help localentrepreneurs to leverage any City money to gainadditional state, federal and private financing.

    Use Portion of City Pension Funds to

    Provide Equity Capital for NeighborhoodBusinesses, including Strategic Supportfor Complementary Firms in IndustryClusters

    In helping innovative businesses move to the nextlevel of growth, equity capital in the form of seedcapital and early and middle stage financing is oftencritical for making industrial strategies succeed.

    Complementary firms can be supported in tandem tostrengthen supply networks and increase the overallsuccess of the sector.

    A number of states have strong in-state venturecapital and equity support programs, including NewYork States own in-state investment program whichhas supported 224 companies with $615 million as of2012.50 Indiana, Maryland, Oklahoma, Pennsylvania,Maine and Rhode Island all have a track recordinvesting taxpayer funds in pre-seed and seed/earlystage small businesses for economic developmentpurposes.51 At the city and regional level, the BayArea Family of Funds has combined both private andpublic-sector investors into regional initiatives topromote business growth in low-income communities.52

    New York City itself should dedicate a small portionof its pension fund to venture capital investments, inthe form a new NYC Innovation Equity Fund, withrecommendations from local economic developmenthubs and private sector leaders helping to identifyboth investment candidates and sector investmentstrategies to grow groups of firms withinneighborhood and citywide industry clusters.

    Create a Job Creation Coordinator in the

    Mayors office to Coordinate All Cross-

    department Job Creation and WorkforceDevelopment Efforts

    Even as more frontline economic development staffare decentralized to neighborhoods across the City,the sprawling, balkanized array of city programs tohelp job seekers and their potential employers needsto be more cohesive, better coordinated and morefully integrated. Oversight of neighborhood economicdevelopment hubs, citywide industry clusterinitiatives, financing and technical assistance, and

    workforce development initiatives should be overseenby a Job Creation Coordinator, answerable to theDeputy Mayor for Economic Development, along thelines of the Chief Talent Officer positionrecommended by the Partnership for New YorkCity.53

    The Job Creation Coordinator will also haveresponsibility for integrating educational programs

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    with the multiple city workforce developmentprograms, which serve roughly 700,000 people eachyear54 across thirty-three programs and elevenagencies. 55 This would encourage greatercoordination and better align education andworkforce development with actual job creation and

    hiring decisions. This position would ensure thateconomic development dollars are being spent insync with how workforce systems are being designedand in how infrastructure investments are beingdeployed.

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    4.CULTIVATE ENTREPRENEURS AND HELP SMALL BUSINESSESTHRIVE AND GROW

    Of the 220,000 businesses in New York City, 195,000or 88% have fewer than 20 employees. 56 Localbusinesses keep more than three times the

    percentage of profits in their local communitycompared to larger firms. 57 They also are morelikely to do business with other local firms and lesslikely to relocate jobs.

    It makes sense to focus City financial and technicalsupport on small businesses, which will in turn spurgrowth and development of other local firms andworkers. And by focusing on neighborhoodbusinesses to help them get better trained workerswho are more productive and better paid, we will be

    helping inject more employee and business spendinginto the local communities that need it the most.

    End the Fine Assault on SmallBusinesses and Instead Help LocalBusinesses Navigate Licensing,Regulatory and Other Requirements toBuild their Businesses

    City-issued fines, when issued excessively orinconsistently, have a detrimental impact on small

    businesses, while not meaningfully upholding publicsafety and consumer protection goals. A November2011 report from the Public Advocates office onreducing red tape for small businesses uncovered apattern of overzealous enforcement.58

    Economic development hubs in the neighborhoodshould proactively help businesses navigateregulatory requirements from day-one of building

    their businesses, developing business plans,choosing business entity forms, complying with wageand labor laws, and avoiding violations in the first

    place. They can assist businesses in fixing violationsthat do occur and support reasonable re-inspectioncycles to assure compliance. The City needs to easeoverzealous enforcement, should allow smallbusiness owners to contest violations online, byphone or by mail, as well as to develop tieredclassifications of small business violations to betterdistinguish low-risk violations from those requiringimmediate rectification and penalization.

    Promote Entrepreneurship Training at

    Economic Development Hubs, with aParticular Focus on ImmigrantEntrepreneurs

    New York Citys Department of Small BusinessServices offers an admirable range of free courses inbasic and advanced business topics, from marketingto business planning to finance. 59 However, ashighlighted in a recent report by Borough PresidentScott Stringer, most SBS workshops and one-on-onetrainings take place at SBSs offices in Lower

    Manhattan a long trip for business owners in theouter boroughs.60

    For immigrant entrepreneurs, the barriers are evengreater. A February 2012 survey by the PublicAdvocates office found that 92% of immigrantbusinesses reported receiving no services to start,sustain or grow their businesses with 51% noteven being aware of the services available to them.61

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    Given that immigrants start businesses at twice therate of native-born citizens, 62 increasing support inthose communities could have tremendous payoff inincreasing employment throughout the City.Successful business support includes navigatingrules and regulations, facilitating access to credit, andworking to implement health insurance or otherbenefits for employees.

    The City should bring business services andentrepreneur classes to neighborhood economicdevelopment hubs, building on the work andexpertise of NYC Business Solutions Centers, andintegrate them into other workforce development andcommunity services. The programs should targetindividuals thinking about starting a business in theirneighborhoods, including those trying to transitionfrom unemployment, who currently almost never use

    the Citys technical resources.63

    Empower BIDS and Industry-SpecificNetworks to Negotiate Bulk Rates onShared Services

    Big businesses are able to negotiate lower costs fromsuppliers for goods and services. NYC should workwith small businesses in both neighborhood BusinessImprovement Districts and through clusters of smallbusinesses in the same industry to negotiate lower

    telecommunications, healthcare or other sharedservices or products. A few innovative programs,such as new Industrial BIDs established by the City,are pursuing this strategy.64 Similar programs shouldbe extended to other business groups throughout theCity.

    Give Local Businesses a Real Shot atGovernment Contracts

    New York City is one of the largest contracting

    jurisdictions in the world. In Fiscal 2012, the Cityprocured more than $10.5 billion worth of supplies,services and construction, through more than 46,000transactions.65 Directing more of those contracts tolocal small businesses should be a high priority,given that more of those dollars will employ localworkers and circulate the profits back into ourneighborhoods. And the living wage jobs tied topublic contracts can become models for encouraging

    higher wages by other employers in thoseneighborhoods.

    Local economic development hubs should encourageand provide technical assistance for more smallbusinesses to apply for government contracts andenter the Citys vendor database (VENDEX) so thatCity agencies will more easily identify and solicit bidsfrom local businesses.

    Public Advocate Bill de Blasio is also proposing thatthe City:

    Require all bidding companies to submit adetailed plan that articulates their local economicimpact, including how they will subcontract tolocal businesses;

    Adopt a version of North Carolinas bid model66and allow local businesses a second chance tomatch the lowest responsible bid;

    Divide contracts into the smallest practicalsegments, without sacrificing coordinationadvantages, to give smaller businesses theability to bid on the parts of the contract theyhave the capacity to supply;

    Provide public institutions like universities andhospitals with the information on available smallfirm contractors to encourage them to support

    local businesses.

    Expand and Reform the Minority/Women-owned Business Enterprises Program toEncompass More Contracts

    The City should broaden the racial and genderdiversity of small businesses receiving contracts fromthe City. Minority-owned firms (MBEs) are more likelyto locate in minority communities and employ minorityworkers.67 One study in fact found that where 60% of

    MBEs employ more than 75% minority employees,only 15% of white-owned firms match thatpercentage.68

    Yet in FY 2012, a mere 5% of the $10.5 billion spentby the city went to firms covered by Local Law 129,the M/WBE program. 69 A survey by the office ofManhattan Borough President Scott Stringer foundthat a majority of those surveyed did not feel they had

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    adequate support in apply for contracts, while 44.4%of firms not bidding on contracts said the processwas too time-consuming and hard to understand.70In an additional survey by the Public Advocate, manyimmigrant entrepreneurs did not even know theprocess for being certified as an M/WBE contractor.71

    The City should broaden the impact of the M/WBEprogram by adding non-mayoral agencies to the

    program, create mentorship programs with smaller,less experienced M/WBE firms being mentored bylarger, more experienced firms in navigating theprocurement process. Finally, the City should reformthe M/WBE disparity study which determines thetargets for M/WBE procurement to ensure theprocess and the final report is methodologicallytransparent and to ensure that no minority voices arecut out.

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    5.RAISE WAGE STANDARDS TO DRIVE ECONOMIC DEVELOPMENT INLOW-INCOME NEIGHBORHOODS

    The most direct assistance city government can giveto low-income neighborhoods is to help increase thewages of workers living there. Raising wage

    standards helps the workers themselves and theirchildren, but it also helps drive spending and newlocal employment in those communities. As theFiscal Policy Institute notes, If these businessowners see demand for their products and servicesrise, they have reason to hire more workers andexpand their orders from suppliers. In this way, newspending creates a multiplier effect in the largereconomy.72 New York City can use a wide range oftools to help raise wage standards for those workersliving in neighborhoods that will most benefit from

    that increased local spending. Having a job in NewYork City should mean being able to live and supporta family in relative comfort and security. And lets beclear -- wage protections that apply equally to allworkers are good for the innovative firms that fuellong-term prosperity, who shouldnt have to competewith low-road sweatshops which thrive onexploitation, not innovation.

    Require a Living Wage of $11.50 per Hourfor All Businesses Receiving $1 Million or

    More of Public Funds

    The 2012 living wage law that City Council SpeakerQuinn allowed to be enacted left out too manyworkers, carving out exceptions for 70,000manufacturing jobs, the Hudson Yards development,grocery stores participating in the Food RetailExpansion to Support Health (FRESH) program, anda range of other businesses. The living wage law

    should be pegged to increases in the cost of livingand covering any development receiving more than$1 million in City subsidies, increase wages for all

    employees in building receiving that level ofsubsidies, and remove the ability of the City Councilto exempt projects as with the Hudson Yards project.Only non-profits, affordable housing, and smallbusinesses with less than $3 million in annualrevenue should be exempted. With a new Deltaterminal opening at JFK with a number of contractorspaying workers as low as $8 to $9 per hour, the Cityas the leaseholder for New Yorks two airports,should work with the Port Authority to ensure thatcontractors at airports pay a living wage.73

    Ensure All Businesses Receiving CitySubsidies Have a Plan on How They WillProvide Healthcare

    As local businesses and non-profits prepare for fullimplementation of the Affordable Care Act,businesses receiving City subsidies should provideclear plans on how they will provide health care for alltheir workers. Businesses struggling to understandhow to implement the Affordable Care Act should

    receive technical support and training to maximumhealth care support for their employees through theeconomic development hubs or SBS trainings.Companies providing quality health plans shouldreceive higher scores in the Vendex system,following the model of cities like El Paso, TX whichrates quality health care as 10% of the overall scorefor a contract bid.74

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    Demand Local Wage Power for New YorkCity to Set Local Minimum Wage Rates

    New York City should not have to wait on Albany toadjust upwards the minimum wage for private sectorworkers. San Jose, California last November becamethe sixth U.S. city with a municipal minimum-wage

    law. 76 Having local control over wage rates wouldgive the City the ability to set the minimum wage rateat a level appropriate to the New York Citys high costof living and worker productivity, rather than havingthe same rate as that of lower-cost upstate counties.

    Expand Paid Sick Days Policy to Include300,000 New Yorkers Left Out of theRecent Law

    Despite current fears among some New York

    employers, sick leave policies provide a net benefitnot just to employees but also to employersthemselves through increased productivity, loweremployee turnover, and reduced transmission ofillness. 77 The Public Advocate earlier this yearhighlighted the advantages to the City, its workersand its employers from having paid sick daysavailable to the 300,000 New Yorkers who are yet tobe covered under City law.78 This one reason why asurvey of San Francisco employers who had threeyears experience with their paid sick days law found

    two-thirds supported the law.79

    Extending paid sick days to most New York workerswas a great first step, but we need to work to closethe exemptions in the recently passed law leave toensure that fewer workers have to face a stark andunnecessary choice between losing needed incomeor taking care of themselves or a sick child.

    Deny Public Contracts, Public Subsidies,and Business Licenses to Employers that

    Repeatedly Violate Workplace Standards

    Enforcing wage standards is as important as enactingthem on paper and the City can use its purchasing

    power, economic development dollars and licensinglaws as a powerful tool to raise wages for workerswhose employers are illegally underpaying them. TheCity of Los Angeles, for example, has a "responsiblecontractor policy" that reviews potential bidders'history of labor, employment, environmental andworkplace safety violations. Bidders must discloseand explain past and pending litigation, past contractsuspensions, and outstanding judgments.80

    A similar policy in New York City would not only helpworkers but would weed out law-breaking employerslikely to defraud the City as well as their employees.To make the policy effective, the City should developa New York City Labor Compliance Office to work incollaboration with the New York State Department ofLabor and assist in auditing and identifying laborviolations in New York City. VENDEX should then

    include a mechanism to suspend or deny Citypermits, contracts and licenses to applicants whohave serious workplace violations.

    Create a Dedicated Legal Services Fundto Support Low-income WorkersChallenging Wage Theft and OtherWorkplace Violations

    Currently, there are few legal services targeted tosupport the wage claims of low-wage, urban workers.

    Federally-funded legal services offices are barredunder a 1996 federal law from engaging in classactions 81 , the most effective way for groups ofworkers to effectively engage in litigation to enforcetheir wage claims. A city-funded program to supportlegal services help for such wage claims wouldtherefore play a unique role in stopping wage theftand raising wage standards in the City. If legalservices lawyers funded under the initiative wereallowed to recycle attorneys fees won in court backinto the program, a relatively small initial grant for the

    wage theft protection fund could become largely self-sustaining over time.

    1Robert Frank. Where the Millionares are might surprise you, CNBC, May 7, 2013. Available at http://finance.yahoo.com/news/where-millionaires-might-surprise-185359462.html

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    2Sam Roberts, City Report Shows More Were Near Poverty in 2011, New York Times, April 21, 2013. Available athttp://www.nytimes.com/2013/04/22/nyregion/city-report-shows-a-growing-number-are-near-poverty.html

    3NYC Jobs Blueprint, Partnership for New York City, 2013. Available at http://www.nycjobsblueprint.org/report/?report=1

    4New Tech City, Center for an Urban Future, 2012. Available at http://nycfuture.org/pdf/New_Tech_City.pdf

    5

    Cornell NYC Tech. http://tech.cornell.edu/6Startup City: Growing New York Citys Entrepreneurial Ecosystem For All, Office of Manhattan Borough President Scott String er,December 2012. Available at http://www.mbpo.org/uploads/StartupCity.pdf

    7The Registered Nurse Population, US Department of Health and Human Services Health Resources and Service Administration,September 2010. Available at http://bhpr.hrsa.gov/healthworkforce/rnsurveys/rnsurveyfinal.pdf, Table 66 (A-70)

    8Alternative Measures of Labor Underutilization for States, Second Quarter of 2012 through First Quarter of 2013 Averages, Bureau ofLabor Statistics U-6 unemployment measure, April 26, 2013. Available at http://www.bls.gov/lau/stalt.htm

    9NYCs Rising Poverty and Falling Incomes Since the Great Recession, Fiscal Policy Institute, 2012. Available athttp://fiscalpolicy.org/nycs-rising-poverty-and-falling-incomes-since-the-great-recession

    10James Parrott, Fiscal Policy Institute, New York City Budgeting, Beyond Balance Forward-Looking Budget Priorities, April 2, 2013.

    11Major Corporate Giveaways: Bank of America, Good Jobs New York, Available at http://www.goodjobsny.org/economic-

    development/bank-america.12Major Corporate Giveaways: Goldman Sachs, Good Jobs New York. Available at http://www.goodjobsny.org/economic-development/goldman-sachs

    13In the news: Fresh Direct Spurs Border War with New Jersey, Good Jobs New York, February 14, 2012. Available athttp://goodjobsny.org/newsroom/news-fresh-direct-spurs-border-war-new-jersey

    14 Partnership for New York City, NYC Jobs Blueprint, available at http://www.nycjobsblueprint.org/report/?report=1

    15With Changes to Commercial Property Tax Program, Breaks Will Not be as Costly for the City, New York City IBO, August 2008, available at http://www.ibo.nyc.ny.us/iboreports/ICIP2008.pdf

    16 35% of the value of the benefit in 2008. With Changes to Commercial Property Tax Program, Breaks Will Not be as Costly for the CityNew York City IBO. Available at http://www.ibo.nyc.ny.us/iboreports/ICIP2008.pdf

    17ICAP (Commercial): Industrial and Commercial Abatement Program, New York City Economic Development Corporation, Available at

    http://www.nycedc.com/program/industrial-commercial-abatement-program18 A mid-90s concept, now seen as unnecessary to incentivize as market demands for office space will ensure that new office buildingswill be smart (meeting certain technological requirements involvin g fiber-optic connectivity and open-interiors for tech firms). Fulldescription of smart building requirements athttps://a836-propertyportal.nyc.gov/glossary.aspx#Smart Building.

    19Industrial and Commercial Incentive Program (ICIP): Analysis and Recommendations, NYC Economic Development Corporation. April24, 2007 as referenced in Senseless Subsidies: AReport on Tax Benefits Under the Industrial and Commercial Incentive Program, Officeof Manhattan Borough President Scott Stringer, May 2008. Available athttp://www.mbpo.org/uploads/policy_reports/Senseless%20Subsidies.pdf

    20Annual Report on Tax Expenditures: Fiscal Year 2013, Department of Finance. Available athttp://www.nyc.gov/html/dof/downloads/pdf/12pdf/ter_2012_final.pdf

    21New York City Comptroller, Audit Report On The Department Of Finance Oversight Of The Industrial And Commercial IncentiveProgram, June 30, 2005, available athttp://www.comptroller.nyc.gov/bureaus/audit/07-13-05_FR03-181A.shtm

    22Economic Development: Addressing the Parallel Universe Dilemma, Toward a 21st Century City for All. Available at footnote 4 ofhttp://21c4all.org/content/economic-development-addressing-parallel-universe-dilemma

    23TIME TO REVAMP NYCS WORKFORCE DEVELOPMENT SYSTEM, Center for an Urban Future. February 2013. Available athttp://nycfuture.org/research/publications/time-to-revamp-nycs-workforce-development-system

    24PSC Testimonyon Governor's Executive Budget, PSC CUNY, February 10, 2011. Available athttp://www.psc-cuny.org/our-campaigns/psc-testimony-governors-executive-budget

    25Startup City: Growing New York Citys Entrepreneurial Ecosystem For All, Office of Manhattan Borough President Scott String er,December 2012. Available at http://www.mbpo.org/uploads/StartupCity.pdf

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    26Path to the Future: Strengthening Career and Technical Education to Prepare Todays Students for the Jobs of Tomorrow, Office of thePublic Advocate, January 2012. Available at http://advocate.nyc.gov/files/deBlasio-CTE-Report.pdf

    28THE PROMISE OF CAREER PATHWAYS SYSTEMS CHANGE: WHAT ROLE SHOULD WORKFORCE INVESTMENT SYSTEMSPLAY? WHAT BENEFITS WILL RESULT? Jobs for the Future, June 2012. Available at p.8 ofhttp://www.jff.org/sites/default/files/CareerPathways_JFF_Paper_060112.pdf

    29 GPRO. http://gpro.org/30 PerScholas. http://perscholas.org/

    31 Brooklyn Workforce Innovations, Available at http://www.bwiny.org/pages/brooklynnetworks.html

    32Message of the Mayor on the Executive Budget for Fiscal year 2014, New York City, Office of Management and Budget, May 2, 2 013.Available at http://www.nyc.gov/html/omb/downloads/pdf/mm5_13.pdf

    33Employment Projections (U.S., projected 2008-2018), Bureau of Labor Statistics, Feburary 2012. Available atwww.bls.gov/emp/ep_table_103.htm

    34The Registered Nurse Population, US Department of Health and Human Services Health Resources and Service Administration,September 2010. Available at Table 66 (A-70) ofhttp://bhpr.hrsa.gov/healthworkforce/rnsurveys/rnsurveyfinal.pdf

    35Path to the Future: Strengthening Career and Technical Education to Prepare Todays Students for the Jobs of Tomorrow, Offic e of thePublic Advocate, January 2012. Available at http://advocate.nyc.gov/files/deBlasio-CTE-Report.pdf

    36Jennifer Cunningham, Department of Education announces that 20 new schools will open in the Bronx next fall, New York Daily News,April 4, 2013. Available at http://www.nydailynews.com/new-york/bronx/twenty-new-schools-open-bronx-school-year-article-1.1306901#ixzz2UVCZCqgG

    37Startup City: Growing New York Citys Entrepreneurial Ecosystem For All, Office of Manhattan Borough President Scott Stringer,December 2012. Available at http://www.mbpo.org/uploads/StartupCity.pdf

    38New York State Department of Labor. See also, Is Manufacturing Back in Brooklyn? Center for an Urban Future, March 2013, av ailableat http://nycfuture.org/data/info/is-manufacturing-back-in-brooklyn.

    39Economic Development: Addressing the Parallel Universe Dilemma, Toward a 21st Century City for All. Available at footnote 4 ofhttp://21c4all.org/content/economic-development-addressing-parallel-universe-dilemma

    40SHAPEWAYS'S NEW 3-D-PRINTING FACTORY BRINGS MANUFACTURING JOBS INTO THE TECH SCENE, Fast Company,http://www.fastcompany.com/3002303/shapewayss-new-3-d-printing-factory-brings-manufacturing-jobs-tech-scene

    41Building Opportunity: HOW STATES CAN LEVERAGE CAPITAL AND INFRASTRUCTURE IN VESTMENTS TO PUT WORKINGFAMILIES ON A PATH TO GOOD JOBS, The Working Poor Families Project. Available at p. 24 ofhttp://www.workingpoorfamilies.org/pdfs/Building_Opportunity.pdf

    42CSS REPORT URGES NYCHA AND CITY AGENCIES TO EXPAND JOB AND TRAINING OPPORTUNITIES, Community ServiceSociety, October 29, 2011. Available at http://www.cssny.org/news/entry/css-report-urges-nycha-and-city-agencies-to-expand-job-and-training-opportu

    43Launching Low-Income Entrepreneurs, Center for an Urban Future, April 2013. Available athttp://nycfuture.org/pdf/Launching-Low-Income-Entrepreneurs.pdf

    44Asset Mapping Roadmap: A Guide to Assessing Regional Development Resources, Council on Competitiveness for the U.S.Department of Labors Education and Training Administration, 2007. Available athttp://www.careeronestop.org/RED/Illuminate_regional_Aug2007.pdf.

    45Strengthening Employment Clusters To Organize Regional Success Act of 2009 National Skills Coalition, 2009. Available athttp://www.nationalskillscoalition.org/federal-policies/sector-partnerships/sectors-documents/nsc_sectors_packet_2010-02.pdf

    46George W. Haynes and Victoria Williams, Lending by Depository Lenders to Small Businesses, 2003 to 2010, U.S. Small Busines sAdministration, Office of Advocacy, Washington, DC, March 2011, Available at http://www.sba.gov/sites/default/files/rs380tot.pdf

    47Launching Low-Income Entrepreneurs, Center for an Urban Future, April 2013. Available a t p.17 ofhttp://nycfuture.org/pdf/Launching-Low-Income-Entrepreneurs.pdf

    48Small Business Loans Program, Chicago Office of the City Treasurer. Available at http://www.chicagocitytreasurer.com/small-business-entrepreneurs/small-business-loan-programs/

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    49Leslie Collins, Kansas City Expands Micro-Loan, Targets Northeast, Northeast News, July 25, 2012, Availableat http://northeastnews.net/pages/?p=13494

    50 http://www.osc.state.ny.us/pension/instate/

    51Cromwell Schmisseur LLC, Information and Observations on State Venture Capital Programs, U.S. Department of the Treasury andInterested Parties in the State Small Business Credit Initiative (SSBCI), February 2013. Available at p. 20 of

    http://www.treasury.gov/resource-center/sb-programs/Documents/VC%20Report.pdf52About the Family of Funds, Bay Area Council, Available at http://www.bayareacouncil.org/family_overview.php

    53New York Jobs Blueprint, Partnership for New York City, April 2013. Available at http://www.nycjobsblueprint.org/

    542013 NYCETC Employment and Training Agenda for Mayoral Candidates. New York City Employment and Training Coalition.Available at http://media.wix.com/ugd//4dd678_6e0377789a75019e25248fbdc6c1e582.pdf

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