Impact of the New York City FY 2013 Executive Budget Proposal on Women, Children and Families

June 18, 2012. This report prepared for the New York Women’s Foundation shows that the budget cuts proposed in the Mayors Executive Budget fail to respond to heightened needs and jeopardize the outlook for economic improvement and security for many low-income women and their families. The proposed cuts and funding shortfalls increase the risk of poverty in two ways: by destabilizing those already struggling, and by reducing opportunities to move out of poverty. Reducing the reliance on spending cuts to balance the budget will mitigate the painful human tradeoffs.

With Taxi Deal Blocked, the City’s Budget Is in Flux

June 17, 2012. An article by David W. Chen, New York Times.

James A. Parrott, the deputy director of the Fiscal Policy Institute, said that Mr. Bloomberg had good reason to assume that the medallion revenue would flow into city coffers, once Gov. Andrew M. Cuomo and lawmakers had agreed to authorize the sale. But Mr. Parrott accused the mayor of not looking hard enough at increasing revenue from the city’s highest earners — a step advocated by one possible mayoral candidate, John C. Liu, the city comptroller. That could raise $600 million to $1 billion annually, Mr. Parrott estimated.

City confounds predictions, gains 14K private jobs in May

June 17, 2012. Growth tempered a bit by losses in public sector employment. An article by Daniel Massey, Crain’s New York.

The city economy continued its remarkable run in May, adding 14,100 private-sector jobs and bringing the total to 70,100 for the first five months of the year, according to an analysis of state Department of Labor data released last week.

The unemployment rate ticked up slightly, to 9.7% from 9.5%, but that increase was because job growth did not keep pace with a jump in the city workforce, which expanded by 11,000 in May. In total, after losses in the public sector, the city netted 12,300 jobs last month, according to a report by real estate services firm Eastern Consolidated.

“A growing labor force shouldn’t be a surprise when we keep coming out every month saying how strong job growth is,” said James Brown, principal economist at the state Department of Labor. When the economy improves, the workforce typically expands as those discouraged from looking for jobs begin hunting again.

The city added 7,800 more jobs in the first five months of the year than it did in all of 2011. Even Wall Street is growing. Defying recent layoffs, the securities industry added 1,500 jobs in May, bringing its increase for the year to 3,400.

One possibility could be that hedge funds are picking up the slack from slimming banking giants, while another explanation is that big banks are hiring more employees to handle ever-weightier regulatory issues. JPMorgan Chase Chief Executive Jamie Dimon told the Senate Banking Committee last week that the company spends $1 billion or more a year on compliance.

Despite the job growth, James Parrott, chief economist at the Fiscal Policy Institute, said that the recovery wasn’t reaching all New Yorkers. The average duration of unemployment in the city is now nearly 10 months, with 110,000 workers out of work for more than a year.

“When you factor in discouraged workers and those working part-time involuntarily, the city’s true unemployment rate is 16%—a crisis by any definition,” he said.

In the past year, most of the city’s gains have come in leisure and hospitality, as well as in professional and business services. From May 2011 to May 2012, the city added 75,700 private-sector jobs, more than three-quarters of which have come in those two sectors.

“A lot of what drives the national numbers, we’re not directly tied to,” said Mr. Brown, citing auto manufacturing and export-related industries as examples. “We’re more tied to business profits and tourism.”

While leisure and hospitality jobs can be low-paying, professional and business services jobs tend to pay relatively high wages. Accounting, advertising and employment services firms have all added significant numbers of jobs this year.

In May, professional and business services added 8,500 jobs, while leisure and hospitality posted a 3,800-job gain. Real estate, meanwhile added 2,200 positions, and arts/entertainment/recreation gained 2,100.

After two solid months, construction shed 3,600 jobs in May, the only industry with a significant loss. Barbara Byrne Denham, chief economist at Eastern Consolidated, said the loss is likely an aberration, as building permits are on the rise.

Spending growth has slowed in state: Ranks in lower 25 for 2 budget years

June 17, 2012. An article by Jerry Zremski, Buffalo News. Excerpt:

In a clear break from tradition, New York State has ranked in the lower half of the 50 states in spending growth during the last two budget years – athough the Empire State’s welfare recipients and public employees have gotten off easy compared with their peers in many parts of the country.

Those are the key conclusions about New York in the most recent version of the Fiscal Survey of the States, a twice-yearly look at how states spend and tax, which was released last week.

New York ranked 37th in spending growth in fiscal 2012 and will rank 29th in fiscal 2013, according to the report, which is published by the National Governors Association and the National Association of State Budget Officers. …

New York’s fiscal 2012 budget included a 10 percent across-the-board cut in most state programs and a 6.1 percent cut in aid to local school districts.

The state boosted aid to school districts by 4 percent for 2013 but that doesn’t come close to making up for last year’s reduction, said Frank Mauro, executive director of the left-leaning Fiscal Policy Institute

Economy crushing NY’s middle class

June 16, 2012. An article by Catherine Curan, New York Post.

The Great Recession is dealing a body blow to New York’s battered middle  class.

An astonishing 55,000 families dropped out of the middle class in New York  state between 2007 and 2010.

In New York City, more than 37,000 families fell to the bottom rungs of the  socioeconomic ladder in the same time period.

In 2010, there were 4.6 million families in the state and 1.2 million  families in the city that were solid members of the middle class.

These sobering statistics come from a Fiscal Policy Institute analysis of  census data for The Post.

The analysis looked at New Yorkers earning between $35,000 and $99,000 a year – which is considered middle class.

“The recession and weak recovery are squeezing the middle class everywhere,  especially in New York City,” Fiscal Policy Institute Chief Economist James  Parrott said.

“Thousands have lost the tenuous grip they had on the middle rungs and have  slipped down the economic ladder,” Parrott said.

While the recession officially ended in 2009, the lackluster recovery and a  host of ugly long-term economic trends are combining to continue to crush the  already shaky middle class.

The underwhelming recovery is also preventing those in poverty from climbing  up the ladder.

Here’s what is crushing New York’s middle class:

* Higher costs to live in New York and raise a family.

In 2008, 41 percent of New Yorker homeowners spent more than 30 percent of  their income on housing.

Two preschoolers in a child-care center cost about $24,000 a year, or more  than 30 percent of family income for a two-earner couple pulling down median  wages

* Dramatically rising inequality, which is greater here than in any other  state.

By 2007, the top 1 percent of earners took home 35 percent of all income  earned in New York state, according to a study done by Demos, a policy research  firm based in New York City.

That compares with just 10 percent of all income for this group in 1980.

* Steep declines in skilled manufacturing jobs and a huge uptick in  shorter-term, lower-paying jobs.

In 1980, manufacturing jobs made up 23 percent of the total in New York,  while service-sector jobs were 33 percent.

By 2010, manufacturing had plunged to 7 percent while the service sector  ballooned to 48 percent.

Young NY Immigrants Welcome Obama Policy

June 16, 2012. At the Manhattan office of the New York Immigration Coalition, a group of activists and students directly affected by the new policy gathered to watch Obama announce the plan. Reported by Mathew R. Warren, Channel 4 NBC New York. Excerpt:

While the new policy does not create a path to citizenship, as the DREAM Act would, it will allow eligible immigrants to work legally and remain in the country for extended periods.

Approximately 3,600 illegal immigrants graduate high school in New York state each year, and another estimated 1,700 enter college, according to a report by the Fiscal Policy Institute.

“For many of us who went on and got that degree, it’s important that we’re finally going to be able to use it,” said Garcia, who said he received his associate degree from the Borough of Manhattan Community College and is now pursuing a major in political science at Hunter.

Mubashar Ahmed, a 22 year-old illegal immigrant originally from Pakistan who watched the president’s speech, said he was ecstatic about the news that he could now pursue a career in the U.S.

Just yesterday, Ahmed, a senior at City College who is majoring in chemical engineering, was applying for jobs abroad, believing he could never work legally within this country in his chosen field.

“Now, I’ll be able to do what I love and I’ll have the same chances that my friends that are graduating with me have,” Ahmed said.

‘Soñadores’ neoyorquinos celebran

June 16, 2012. An article by Carolina Ledezma, El Diario / La Prensa.

Immigrants Outpacing the Rest of Us in Small Business Ownership

June 15, 2012. An article by Josh  Sanburn, Time Business.

Migrants Keep Small-Business Faith

June 14, 2012. Newcomers to the U.S. are increasingly  opening firms beyond major cities, energizing local economies. An article by Miriam  Jordan, Wall Street Journal.

Immigrants are more inclined to own small businesses than native-born Americans and are increasingly opening shop in areas beyond the major cities in which they have traditionally settled, a trend that is energizing local economies and reshaping communities.

Immigrants accounted for 18% of the country’s 4.9 million small-business owners in 2010, a six-percentage-point increase from two decades earlier, according to analysis of census data by the nonpartisan Fiscal Policy Institute. Immigrants, who represent 13% of the population, accounted for a third of the increase in the number of small-business owners between 1990 and 2010.

Small businesses are defined as companies with fewer than 100 employees. Small businesses owned by immigrants employed 4.7 million people in 2010 and generated an estimated $776 billion in revenue, according to FPI calculations.

The study confirms that business ownership remains a favored way to earn a living among immigrants. The latest surge in immigrant business owners began in the 1980s, when the country experienced a large wave of newcomers from Latin America and Asia.

The study downplays the role of immigrant-founded technology titans, such as Yahoo Inc. and Google Inc. Like a century ago, immigrant firms remain more likely to be mom-and-pop stores, which thrive despite the predominance of big-box retailers and the growth of online shopping.

“A bigger part of the immigrant business story is still the bread-and-butter grocery store, restaurant and retail shop, as well as doctors’ offices, taxi services and dry cleaners,” said David Kallick, principal author of the FPI report.

Traditionally, immigrants established businesses in enclaves of big cities that boast large populations from the same country, making it possible to operate with little or no English.

But in the past decade or so, many Asian and Latin American newcomers have rooted ethnic eateries and grocery stores in small towns in the U.S. heartland. In Schuyler, Neb., a meatpacking town of just 6,211 people, Mexican and Guatemalan immigrants have flocked to B Street, transforming a neighborhood where storefronts had stood vacant for years

“Our downtown is mostly immigrant businesses now,” said Mayor David Reinecke. “If they weren’t here, we’d be dying.”

Delfino Bello emigrated from Mexico unable to speak English. Now, he runs three popular Mexican restaurants about 40 miles from Chicago.

In 1995, Mr. Bello opened his first eatery, called “El Faro,” in a shopping strip in Bartlett, Ill., that had fallen on hard times. As the taqueria flourished, it attracted other businesses. A few years later, he opened restaurants in Elgin and East Dundee, serving a clientele that includes both immigrants and Americans.

“I had nothing, nothing when I arrived in this country,” said Mr. Bello, 55 years old. If the economy continues to recover, he says he plans to open a fourth restaurant.

National Supermarket Association represents independent supermarket owners, including many Dominican immigrants who started as small grocers in New York’s Hispanic neighborhoods. Now, many have found a niche by moving into non-immigrant, low-income areas in the city and beyond.

“They’re not small businesses anymore,” said Ramona Hernandez, a professor at the City College of New York who studies Dominican entrepreneurship. “They’re chains that move billions of dollars each year.”

The FPI study found that immigrants concentrate in some industries, such as taxi services, dry cleaners and gas stations. They also have a large presence in lodging and restaurants.

Mexicans, the single largest group of immigrants, own the greatest number of immigrant-owned small firms. They are followed by immigrants from India, Korea, Cuba, China and Vietnam.

Immigrants from countries with relatively small numbers in the overall population, such as Greece, are disproportionately more likely to own businesses, while immigrant women are twice as likely as U.S.-born women to be business owners.

The FPI found that the largest number of Indian-born small-business owners are in education, health and social services, followed by leisure and hospitality and computers and technology.

In the medical field, Indians have helped offset a shortage of primary-care doctors and dentists in some parts of the U.S.

India-born dentist Savpreet S. Dhami and his family moved to Cortland, N.Y., 35 miles from Syracuse, in 2005, where he joined an Indian-owned practice. After six years, Dr. Dhami, 48, got a $600,000 bank loan and bought a practice from a retiring dentist in nearby Cicero. Since opening in December, he has more than doubled his staff and recently invested in a $30,000 digital x-ray machine

Dr. Dhami says he hopes to bring another dentist into the practice, and in three or four years he hopes to open another practice. “Only in America can you become owner of a business like this,” he said.

Immigrants outpacing the general population in owning small businesses

June 14, 2012. Study: Nearly one half of small businesses in New York City are owned by immigrants. An article by Phyllis Furman, New York Daily News.

They’re coming to America – and starting businesses.

Immigrant entrepreneurship is on the rise both in New York City and across the country, with immigrants owning a disproportionately large number of small businesses, according to a just released study from the Fiscal Policy Institute.

As of 2010, more than one in six small business owners in the U.S. were immigrants, the study found. And in New York City, nearly one half of entrepreneurs were born in foreign countries.

By contrast, immigrants accounted for a smaller portion of the population – 13% of the U.S. and 36% of New York City.

Two decades ago, immigrants made up just 8% of the U.S. population and accounted for 12% of small business owners.

“I am not sure people are aware of how big and growing a role immigrants are playing as business owners,” David Dyssegaard Kallick, director of the Fiscal Policy Institute’s Immigration Research told the Daily News. “Immigrants are expanding the economy.”

Among the other findings: Immigrants don’t just own companies, they put millions to work. As of 2007, immigrant businesses had $776 billion in revenues and employed 4.7 million.

“I believe we are here for one reason: to succeed, to achieve the American dream,” immigrant business owner Lowell Hawthorne, the CEO of Bronx-based Golden Krust Caribbean Bakery & Grill, told the News.

Immigrant women are more likely to start businesses than U.S.-born women and the majority of immigrant business owners – 58% – do not have a college degree, the study found.

With its high concentration of foreign born residents, the New York metro area ranked No. 3, behind Miami and Los Angeles, in having the largest share of immigrant small business owners (36%).

In certain New York City industries, immigrant business owners overwhelmingly dominate. Those include dry cleaners – where a whopping 90% of business owners are immigrants – taxi services, grocery stores, child day care, beauty salons and restaurants.

There are more local small business owners from China than any other country, followed by the Dominican Republic, Korea and India.

In 1981, at age 21, Hawthorne, left behind his parents in Jamaica and moved to the Bronx to join several of his siblings.

For nearly a decade, he worked as an accountant for the New York City Police Department before getting the idea for a business: a Jamaican eatery that would bring the taste of home to New York’s Jamaican population.

Hawthorne and his siblings mortgaged their homes, raised $100,000 and in 1989 opened the first Golden Krust on Gun Hill Rd. in the Bronx. From there, the chain would grow rapidly, becoming a franchise company in 1996.

Today, Golden Krust has 120 restaurants, annual sales of more than $100 million and 1,600 employees.

“Living in the United States, there are tremendous opportunities if one wants to work hard,” said Hawthorne, who has just come out with a book “The Baker’s Son,” which chronicles his immigrant entrepreneurship story. “We saw there was opportunity, we ran with it and we never stopped.”