May 9, 2013. Should legal immigrants who are not yet citizens be permitted to vote in New York City elections?

The NYC City Council will debate this question beginning on Thursday, May 9, in connection with Intro 410, which would allow pre-citizens to vote in New York City municipal elections.

It wouldn’t be the first time noncitizens could vote in New York elections. School board elections, before they were abolished, were open to all parents of children in New York City schools, regardless of citizenship or immigration status.

To provide some context to the debate, the Fiscal Policy Institute prepared this data table.

It shows that of the city’s 6.5 million voting-age residents, a little more than half (55 percent) were born in the United States, automatically making them citizens. Another quarter (24 percent) are immigrants who have become naturalized citizens.

That leaves 21 percent of the city’s residents 18 years and older who are outside of the voting process. Altogether: 1.4 million people.

The Pew Hispanic Center estimates that there are about a half-million undocumented immigrants living in New York City—not all of them, of course, over 18 years old.

So, although we cannot give an exact estimate of how many non-citizen immigrant New York City residents are legally present in the United States, a good guess is about a million. That is a lot of people to be living here without political representation.

Commitment to citizenship seems like a fair condition of voting—this is, indeed, one of the central rights of citizenship.

However, many of these immigrants are already in the process of becoming citizens, a process that can take many years. In the meantime, they send their children to New York City schools, ride the New York City subways, and pay New York City taxes.

The attached data provides some sense of the reason for concern. The debate on this issue will start on Thursday.

April 18, 2013. In a special issue of The Nation that includes over 20 stories about New York City under Mayor Bloomberg, a picture is painted of a two-tiered urbanism. The lead story by The Nation’s editors describes the heightened income polarization in New York City and cites data from various FPI analyses, including Pulling apart: The continuing impact of income polarization in New York State.

Here is New York in 2013: a city of dazzling resurrection and official neglect, remarkable wealth and even more remarkable inequality. Despite the popular narrative of a city reborn—after the fiscal crisis of the ’70s, the crack epidemic of the ’80s, the terrorist attack of 2001, the superstorm of 2012—the extraordinary triumph of New York’s existence is tempered by the outrage of that inequality. Here, one of the country’s poorest congressional districts, primarily in the South Bronx, sits less than a mile from one of its wealthiest, which includes Manhattan’s Upper East Side. And here, a billionaire mayor presides over a homelessness crisis so massive that 50,000 men, women and children sleep in shelters each night. More New Yorkers are homeless these days than at any time since the Great Depression.

The numbers tell the story. Between 2000 and 2010, the median income of the city’s eight wealthiest neighborhoods jumped 55 percent, according to the Fiscal Policy Institute. Meanwhile, as the cushy precincts got even cushier, median income dipped 3 percent in middle-income areas and 0.2 percent in the poorest neighborhoods.

Image: Susie Cagle. Source: Fiscal Policy Institute. High income neighborhoods defined by median family incomes $91,000 and above, low-income neighborhoods defined by median family incomes between $24,000 and $47,000.

New York, of course, has always been a city of striking contrasts, but its wealth gap is growing ever more extreme. The richest 1 percent of New Yorkers claimed almost 39 percent of the city’s income share in 2012—up from 12 percent in 1980. The money pouring in at the top of the income brackets has simply pooled there, without trickling down to the bottom or even the middle. This great pooling has occurred as median wages have fallen, the cost of living has increased, and the poverty rate has risen to 21 percent—as high as it was in 1980. As a result, America’s most iconic city now has the same inequality index as Swaziland.

This isn’t entirely New York’s fault. Over the last three decades, the whole country has experienced similar tectonic shifts, thanks in part to the national economy’s increasing tilt toward finance—a sector that has an outsize presence in New York, which helps explain why the city has not only mirrored but exceeded the nation’s rush toward inequality. “To the extent that New York is the home base for a lot of financial institutions, we have a lot of people who are able to pay themselves very well,” explains James Parrott, chief economist of the Fiscal Policy Institute in New York.

But, Parrott adds, the stewards of New York City—its mayor, legislators and other influencers—could have made choices to counter this trend: “New York City’s government is significant enough in its breadth…that the policy tools exist and the wherewithal exists to do something at the margins to lessen inequality.” The choices, however, that might have corrected some of the skew—within education, economic development, labor rights, poverty policy, budgeting—have largely been ignored in favor of creating a very different model of metropolis.

Image: Susie Cagle. Source: Fiscal Policy Institute, based on Pilketty and Saez’s top 1% income share for the US and FPI analysis of NYS Department of Tax and Finance and Division of the Budget data for NYS and NYC top 1% income share, 2010-2012 projected.

In “Bloomberg by the Numbers“, Aileen Brown cites several pieces of FPI research on the increase in business tax expenditures, the decline in city funding for human services, the decline in median wages, and other measures of well-being in NYC.

In “Interactive Map: Bloomberg’s New York”, graphic artist Susie Cagle also draws heavily on FPI research.

April 5, 2013. Unless disclosure requirements are clarified, we’ll probably never know exactly how much Walmart and other large, low-wage employers receive in government subsidies under New York’s new Minimum Wage Reimbursement Credit (MWRC). But based on the best data available, we estimate that Walmart is likely to receive MWRC subsidies of between $53 million and $85 million over the next five years.

New York’s new MWRC will provide employers a tax credit for the hours worked by students between the ages of 16 and 19 who are paid at exactly the minimum wage. As our earlier explanation and assessment of this truly perverse measure explains, it would pay employers 75 cents an hour for each such student employed at the minimum wage of $8 an hour in 2014, $1.31 an hour for each such student paid $8.75 an hour in 2015, and $1.35 an hour for each such student paid $9 an hour in 2016, 2017 and 2018. Employers would get these credits even if the jobs involved had been previously filled by adults or non-student teenagers, and even if the jobs involved had been filled at higher wage rates in 2013. The resulting “bonus” for employers who hire one or more students in place of a full-time adult worker would be substantial, rising as high as $2,808 a year per worker. ($2,808 is the $1.35 tax credit times 40 hours a week times 52 weeks.)

Even though there’s no compelling evidence that a moderate minimum wage increase harms any business, the new MWRC has been made available to all employers, even the largest ones. Large employers of low-wage workers, such as Walmart, will reap the greatest windfalls from this credit.

Walmart has over a hundred stores in New York State and employs an estimated 28,500 workers. Government data for New York indicate that for discount retailers like Walmart, teenagers who are in school account, on average, for 11.3% of their workforces, and that these teenagers work an average of 18.7 hours per week, or 972 hours on an annual basis. Thus, if Walmart followed the broader employment pattern in the state, and if it paid all its teenage student workers at exactly the minimum wage, it would get a subsidy of $19 million over the next five years.

But a large multinational corporation like Walmart knows a thing or two about extracting subsidies from state and local taxpayers. By one estimate, Wal-mart has gotten $1.2 billion in subsidies from state and local taxpayers around the United States. So there is every reason to believe that they will seek to maximize what they can get from this new pot of taxpayer largesse.

About 18% of the teenagers that discount retailers employ are not students. Businesses like Walmart might start hiring just student teenagers because non-student teenagers wouldn’t generate a dime in MWRC subsidies. And they might also decide to hire student teenagers in place of adults. The legislation establishing the MWRC says an employer “shall not discharge an employee and hire an eligible employee solely for the purpose of qualifying for this credit,” $2,800 per year per full time equivalent position might tempt a large company to gradually replace adults and non-student teenagers in ways that stay on the right side of the law.

If a large employer like Walmart managed to hire 10% fewer adults and hire more teenaged students in their place, the five-year taxpayer subsidy would jump to $53 million. Hiring 20% fewer adults and more teenaged students in their place would boost the potential subsidy to $85 million over five years.

New York State’s new MWRC requires close scrutiny, not only because it is a huge new tax break for businesses, but because it could have adverse effects on the employability of struggling adult workers and because it incentivizes keeping wages right at the minimum. Public disclosure of how much individual companies receive under the new MWRC is essential if New York is to effectively evaluate the MWRC’s fiscal and economic impact.  New York’s much more accountable Youth Works tax credit already requires participating employers to agree to the disclosure of their participation and disclosure of the credits that they receive. Albany needs to require such disclosure under all business tax credits including the new Minimum Wage Reimbursement Credit.

March 25, 2013. This was to have been the year New York caught up with the 19 other states and the District of Columbia with a minimum wage above the $7.25 an hour federal level. Minimum wage legislation that passed the Assembly also would have indexed the minimum wage in future years—as 10 other states do—so that inflation would not steadily erode its purchasing power. However, the agreement reached over the weekend in Albany falls far short. It increases the minimum wage to $8.00 an hour on the last day of 2013, to $8.75 a year later, and to $9.00 an hour on the last day of 2015, but it leaves out indexation and treats tipped workers inadequately.

But the overall minimum wage package is even worse – a lot worse because of an ill conceived and poorly drafted tax break that has been added to the mix.

Despite a complete absence of compelling evidence regarding any need or justification, Albany is poised to enact a “minimum wage reimbursement credit” that flies in the face of sound tax policy, good labor market practice, or common sense. One step forward, four steps backward.

The minimum wage tax credit is part EE in the budget package’s revenue bill (S2609D/A3009D). In the first year (2014) in which the new minimum wage of $8.00 an hour would be in effect, the tax credit would pay employers for all of the increase for any workers between the age of 16 and 19 that they pay at the $8.00 an hour level. In the second year (2015), it would pay employers $1.31 for such teenage workers paid at the $8.75 level, and for the years 2016-2018, it would pay employers $1.35 an hour for such teenage workers paid at the $9.00 an hour level. A very perverse part of the tax credit is that the employer only gets the credit if the employee is paid exactly the minimum wage.

This takes income polarization and policies that deprive workers of fair pay and a decent living to new heights–we’re about to become the first state to make a minimum wage a maximum wage at the same time! Michigan and Wisconsin move over—New York wants to officially discourage pay increases. Think about it—starting in 2016, New York will reward employers up to $2,808 per teenage worker for keeping wages flat for three years ($2,808 is the $1.35 hourly tax credit times 40 hours a week times 52 weeks).

There are numerous other ways the new tax credit merely falls well short in the sound policy and common sense department:

1. While this credit was conceived as a way to limit the impact of the increased minimum wage on small business, the proposed legislation:

• is available to all employers including giant corporations such as Walmart and McDonalds, and
• even makes the credit available to Verizon and other public utilities (Article 9 of the Tax Law); banks (Article 32); and insurance companies (Article 33).

2.  Unlike the New York Youth Works tax credit, the new Minimum Wage Reimbursement Credit (MWRC) for employing students between the ages of 16 and 19 at the minimum wage:

• is open-ended as to cost, whereas the cost of the Youth Works program is capped at $25 million for the first two years, and at $6 million in subsequent years,
• does not require participating employers to agree to the disclosure of  their participation or disclosure of the magnitude of the credits that they receive,
• has a much weaker prohibition on the “gaming” of the system to benefit from the credits available.  (The new MWRC’s only safeguard in this regard is that “An employer shall not discharge an employee and hire an eligible employee solely for the purpose of qualifying for this credit.” At the very least, credits should not be available to employers for hiring teenagers for positions previously filled by adults.)

3.  The proponents of this credit argued that it was necessary so that small businesses would not be “forced” by the increased minimum wage to reduce the number of students that they hire for summer and other seasonal jobs; BUT the proposed legislation:

• gives a credit to businesses that pay the minimum wage to students for jobs for which it previously paid more than the minimum wage,
• for students employed at the minimum wage rate, would give an employer a credit (ranging from 75 cents to $1.35 an hour) even if students hired in 2013 to fill those same positions were paid more than $7.25 or even $8.00 or $9.00 an hour.

4.  The bill creates an incentive to hire students between the ages of 16 and 19 rather than older individuals or non-students. Although 90 percent of the lowest-wage New York workers are 20 years of age or older, this new tax credit will dangle $1,560 to $2,808 out in front of employers  for every adult worker they manage to substitute with a student between the ages of 16 and 19.

Legislation like this new tax credit is proof there are worse things than a late budget.

March 18, 2013. Earlier this month the NYS Department of Labor released its annual revisions to the employment and unemployment data. As noted in an earlier blog entry, New York’s private payroll employment growth was revised upward and government employment was revised to show the loss of 59,000 state and local government jobs between December 2010 and December 2012.

In the revised unemployment data for 2011 and 2012 released by the Department of Labor, the unemployment trend replaces what had been a confusing spike in the unemployment rates for NYS to show a more smoothed out picture.

The pre-benchmark and post-benchmark picture is very similar for NYC, although the unemployment rate is higher for NYC.

While it is not unusual in a recovery to see a month or two where the unemployment moves higher as more people resume looking for work as the hiring situation improves. This adds to the labor force count, and if the labor force grows faster than employment in the household series, the unemployment rate would rise. Payroll employment numbers are from a monthly survey of businesses while the labor force and unemployment data are based on a monthly survey of households by the Census Bureau in conjunction with the U.S. Bureau of Labor Statistics.

However, in the middle of 2012, the pre-benchmarked NYS and NYC unemployment numbers were showing a fairly steady increase in the unemployment rate that pushed it about 1% higher than the level from the spring of 2011. This was puzzling to economists since NYS and NYC payroll job growth was steady and on a par with the nation during this period. However, as would be expected, the national unemployment rate was showing a steady downward trend while unemployment was reported as rising in NYS and NYC.

We had noted this anomalous situation in our The State of Working NewYork 2012 edition, and reviewed the data in more detail and with comparisons to the trends in other large states in a presentation prepared in the late fall.

The revised labor market data for NYS and NYC show more labor force growth in both 2011 and 2012 and with considerably higher household employment growth in both years. The revised data show unemployment falling fairly steadily in both NYS and NYC for the last several months of 2012.

March 8, 2013. The New York State Department of Labor (NYSDOL), in its press release yesterday on the latest employment data, emphasized some good news—that New York State has had 17 consecutive months of private sector job growth, and that the state gained an estimated 29,600 private sector jobs in January (on a seasonally adjusted basis.)

Nothing wrong with reporting good news. There was more good news in NYSDOL’s annual payroll employment revision that was also released yesterday. The annual “benchmark” revision showed that the December 2012 private employment level in New York State was 25,000 higher than had been earlier estimated. Adding in the January numbers makes the state’s total private sector job growth over the three years from January 2010 to January 2013 an impressive 421,700, a 6% increase. This news wasn’t in the department’s press release but it will get noticed before long.

On the other hand, the benchmark revisions of data for the past two years pointed to a sharp reversal of employment in New York State’s state and local government sector. While there has been plenty of anecdotal evidence that budget cuts were causing the layoffs of teachers and other school and local government workers around the state, the official NYSDOL payroll employment series showed little change over the past two years. Before yesterday’s revisions, it looked like the net state and local government job change from December 2010 to December 2012 had been a positive 700 jobs. The revisions darken the picture like a twister on a summer day. Now, the NYSDOL shows a net loss of 33,100 jobs over that two year period, with the state government losing 6,100 positions, and local governments, including schools, showing 27,000 fewer jobs.

And because there had been some state and local government job losses suffered in 2010, the three-year New York State state and local government job tally is down by about 59,000 (or 4.2%), with nearly 53,000 of those job losses at the local level.

Over the last three years, total public and private sector job growth has been 4.2% in New York State (Jan. 2010-Jan. 2013). Were it not for the 59,000 drop in state and local government employment, and another 8,700 federal job loss, the state’s total job growth would have been 5% over the past three years, not 4.2%.

The annual benchmark procedure typically revises the job estimates, often following a general pattern of upward revisions during a recovery and downward revisions during a downturn. The sharp downward revision in state and local government in this recovery obviously runs counter to the usual trend.  At some point, the reduced educational and public services that result from fewer state and local government workers and from shrinking government budgets very likely will limit future economic growth. Not only will consumer spending and the jobs associated with that spending decline because of fewer state and local workers, but business and jobs will fall off at the broad range of companies that sell directly to state and local governments.

February 25, 2013. Last night, the White House released the following likely impacts from sequestration in New York State if Congress does not act to cut the deficit in a balanced way.  Bringing in more revenue by closing tax loopholes along with smarter reductions in spending would allow the federal government to avoid the following cuts in New York State:

Teachers and Schools: The loss of approximately $43 million in funding for about 120 primary and secondary schools placing almost 600 teacher and aide jobs at risk and serving 70,000 fewer students than currently.  This does not include the additional loss of approximately $36 million that supports over 400 teachers, aides, and staff who help children with disabilities.

Work-Study Jobs: The loss of financial aid for about 4,500 low income college students and the loss of work-study jobs for about 4,100 students.

Head Start: The elimination of critical early education services for approximately 4,300 children.

Child Care: The potential loss of up to 2,300 child care slots that allow parents to continue to work.

Vaccines for Children: The loss of almost $500,000 for providing measles, mumps, rubella, tetanus, whooping cough, influenza, and Hepatitis B vaccines resulting in over 7,000 fewer children served than currently.

Public Health: The loss of over $9.5 million for responding to public health threats, preventing and treating substance abuse and testing for HIV.  This would result in over 6,000 fewer admissions to substance abuse programs and about 68,000 fewer HIV tests.

Violence against Women: The potential loss of over $400,000 to provide domestic violence services resulting in up to 1,600 fewer victims being assisted.

Nutrition Assistance for Seniors: The loss of approximately $1.5 million for senior meals.

Job Search Assistance: The loss of almost $900,000 in funding to help New Yorkers find employment and training reducing such services for over 46,000 people.

Pollution Prevention: The loss of about $13 million in environmental funding for clean water and air quality and the loss of over $1 million for protecting fish and wildlife.

Military Readiness: The reduction of almost $61 million in pay through furloughs for approximately 12,000 civilian Department of Defense employees and the reduction of about $108 million for base operation funding.

Law Enforcement and Public Safety: The loss of almost $800,000 in funding for crime prevention and prosecution including community corrections, drug treatment and enforcement and crime victim and witness initiatives.

February 24, 2013. This article ran in the Kansas City Star, the Denver Post, the Bradenton (Florida) Herald, the Anchorage Daily News, and other local papers around the country.

States Lead the Way on Immigration Reform

By David Dyssegaard Kallick and Tanya Broder

While President Obama pushed Congress to pass comprehensive immigration reform in his State of the Union address, many states are already paving the way toward a more sensible set of policies.

Nowhere is this clearer than in offering equal access to higher education, regardless of immigration status.

Twelve states have laws allowing students who meet specific requirements, regardless of their status, to pay in-state tuition rates at public post-secondary institutions: California, Connecticut, Illinois, Kansas, Maryland, Nebraska, New Mexico, New York, Oklahoma, Texas, Utah and Washington.

Rhode Island’s Board of Governors for Higher Education adopted a policy permitting eligible students to pay in-state tuition rates, regardless of their status. Minnesota offers a “flat” tuition rate to students, regardless of their status. Three states — California, Texas and New Mexico — allow qualified students, regardless of immigration status, to get financial aid or scholarships, and another, Illinois, established a private fund to raise money to aid undocumented students.

Last week, the University of Hawaii regents approved a plan to offer in-state tuition to stude3nts who meet certain criteria, regardless of their status.

New York may soon join this group. Assembly Democrats in Albany support the tuition assistance bill, while Senate Republicans seem to be wavering in their opposition. So far, Gov. Andrew Cuomo has been sitting on the fence. A vibrant coalition of students and educators have high hopes, however, that Cuomo will demonstrate the kind of leadership he exercised in passing laws on gun control and gay marriage. At least a dozen other states are likely to consider bills to improve access to education for immigrants — measures that are gaining bipartisan support.

Colorado’s tuition equity bill is well on its way to becoming law this year. In a state where immigration at times has been a toxic issue, the politics shifted dramatically after last year’s election. Republicans lost their majority in the state House, while Democrats held theirs in the Senate, in no small part due to political participation among Latinos, who were repelled by the anti-immigrant rhetoric of Republican politicians.

Colorado Gov. John Hickenlooper, a Democrat, has expressed support for the measure, and in the post-election context, one Republican already has already voted for the bill.

The moral case is clear. These “DREAMers” have lived in the United States since they were children. So many are outspoken, smart, and passionate. Many first discovered that they did not have a Social Security number or a lawful status when they applied to college.

The economic argument is even clearer. Higher levels of educational attainment mean greater productivity for workers, and a state with better-educated workers provides a more attractive climate for business. A college degree translates into increased incomes for individuals and stronger tax revenues. In New York, the Fiscal Policy Institute estimated that the typical graduate of a two-year college earns $10,000 more than a high school graduate, and pays $1,000 a year more in state and local taxes. That’s a very good return on the state’s investment — and the returns look even better for four-year degrees.

These farsighted state policies on immigration won’t substitute for comprehensive reform at the federal level, but they help point the way.

David Dyssegaard Kallick is director of the Fiscal Policy Institute’s Immi- gration Research Initiative. Tanya Broder is a senior staff attorney with the National Immigration Law Center. They wrote this for Progressive Media Project, and it was distributed by McClatchy-Tribune News Service.

 

January 7, 2013. The Fiscal Policy Institute seeks an Executive Director to build on an exceptional twenty-two year record of providing high quality research, analysis, and coalition building in support of progressive fiscal and economic policies that benefit all New Yorkers.

The Executive Director will be responsible for overall leadership of the organization, as well as leading, coordinating, and implementing its tax, budget and policy analysis work. The ED will oversee a staff currently consisting of 6-8 people, be a major spokesperson for the organization, lead fund development efforts, communicate with the Board of Directors, and otherwise administer the organization. The Executive Director will be accountable to the Board.

This is a full-time position. Salary and benefits will be commensurate with skills and experience.

The target date for filling this position is July 1, 2013. Resumes will be accepted until the position is filled, with initial review of resumes by mid-February 2013. To apply, submit a resume, policy analysis writing sample, and a cover letter specifically addressing your interest in and qualifications for this position by e-mail to resumes@fiscalpolicy.org. For more information, e-mail lavigne@fiscalpolicy.org

Read the full job description.

November 2, 2012. This piece on the economic impact of superstorm Sandy was written by James Parrott for Quartz, the new international business news site (Qz.com) published by The Atlantic Monthly.

Since the October jobs report released today reflects employment conditions as of the second week of the month, it doesn’t tell us anything about the impact of Hurricane Sandy, the most devastating storm to hit the New York metro area in decades. What can we expect to see in job reports in the months ahead as a result of Sandy? How will the hurricane’s impact affect the economy and economic well-being in the hardest hit states of New Jersey and New York, which account for one-ninth of the nation’s economic output?

1. The near-term jobs impact

On the jobs front, initially there likely will be net job losses from businesses like restaurants, small retailers and neighborhood service providers that closed or were forced to curtail operations. In the first few months, the jobs lost likely will out-number those needed for clean-up and the restoration of services. Holiday season tourism in New York City will be dampened. Spring of next year should see a greater number of construction projects and jobs as businesses and homeowners set about rebuilding. Retail spending should bounce back around then as insurance claims are settled and homeowners and businesses start spending again and rebuilding inventories. The jobs associated with infrastructure rebuilding are many months, or years, down the road.

2. As in the past, low-wage workers and small businesses will suffer the most

When the Twin Towers fell, most observers thought the brunt of job losses would be borne by those working in the finance sector since many of the jobs located in and around the World Trade Center were finance-related. It soon became clear, however, that many finance jobs were moved to other locations and that the workers suffering the most from lost jobs or fewer hours and lower pay were low-wage workers in the garment shops and restaurants of Chinatown, or those working in hotels and at the airports. It’s likely to be a similar story with Sandy. Low-wage retail and restaurant workers will be thrown out of work when their small business employers close.

3. The fiscal impact on the city and state governments and the MTA

The good news is that the federal government will reimburse most state and local government expenditures in New York and New Jersey for clean-up costs and emergency protective measures. The bad news is that federal disaster assistance is next to nothing for lost tax revenues related to natural disasters. Thus, the costs of the Metropolitan Transportation Authority for cleaning up the transit system after extensive flooding may be covered, but its lost fare and toll revenues will not.

4. Poor communities in an age of hyper-income polarization

And if New York City’s experience after 9/11 is any guide, poorer neighborhoods and towns around the metro region will be at the end of the line when it comes to restoring utilities and other services and rebuilding infrastructure. We should prioritize rebuilding damaged communities irrespective of the wealth or power of that community’s residents. Firefighters rush into a burning building to save lives. They don’t first ask to see bank statements.

5. Infrastructure investments to prevent a recurrence

Sandy was a big wake-up call regarding the region’s vulnerability to rising sea levels in an era of climate change. It should spark a vigorous debate about how to protect our infrastructure, communities and economy from flooding, and about how to finance those investments. We can no longer brush aside the need for a gas tax increase, for carbon taxes or financial transaction taxes needed to finance a 21st century infrastructure. Certainly there’s a cost to new taxes, but few would argue that it is greater than the cost of inaction in the face of disasters like Sandy and the economic damage and loss of life it caused.