Crains New York - July 29, 2013 - (Page 12)

OPINION So many jobs, and no boom in sight N ew York City added more jobs in the first half of this year than in any similar period since 2000. Remember 2000? Well, this year is nothing like that year. Welcome to the diversified New York, which no longer relies on Wall Street. Maybe diversification is not all it is hyped up to be. Office rents jumped by a third in 2000, to more than $50 a square foot.The average apartment back then cost $531,000,up 20% in just 12 months. Internet almost-billionaire Kevin O’Connor decided to move to the Upper West Side, which was slightly cheaper than the Upper East Side.The year’s Zagat Guide listed 300 new restaurants. Eight museums opened. Wall Street showered money on its traders and investment bankers. Harry Winston thought the pickings were so easy that it rented a restaurant in the financial district to show off diamond-encrusted watches and five-carat engagement rings, sure it could sell quite a few. The rest of the city benefited, too. Wages for administrative assistants topped $50,000, and fast-food restaurants were rapidly increasing GREG DAVID pay to lure workers. The unemployment rate was just over 5%. The story in 2013 is very different. Midtown office rents are stagnant, THE BIG PICTURE FOR NYC 2000 2013 with the only increases comproducing large numbers of ing in tech-favored midjobs yet on its own, nor is Six-month job gain 61,000 60,700 town south. Major office tech-firm spending cascadTotal number of jobs 3.74M 3.97M projects on the West Side ing through the city,as hapUnemployment rate 5.4% 8.7% and at the World Trade pened in 2000. Someday, Center lack corporate tentech may replace Wall WAGES AND WALL STREET ants willing to take large Street, but that day isn’t blocks of space.Despite broAverage wage $59,103 $80,468 here.Worse, the digital revker hype, apartment prices olution is the primary cause Average Wall Street wage $242,193 $360,670 are up only modestly except of the near-implosion of Wall Street % of all wages 21.6% 19.6% for those ultra-expensive other areas, like publishing. units being sold to foreignMeanwhile, Wall Street SIX-MONTH JOB GROWTH BY SECTOR ers. Luxury retailing is in can best be described as 2000 2013 large part supported by stagnant as it adapts to new tourists. And fast-food regulation and difficult Business services 20,900 Education, health 24,600 workers are striking because markets. Total wages in the Information 13,400 Leisure, hospitality 13,100 they are being paid only the securities sector have Education, health 10,300 Construction 7,900 minimum wage. plunged by $15 billion in This is not a boom dethe past four years. That’s a Government 5,500 Retail 6,200 spite the strong job growth, big number,and it has hamRetail 4,900 Business services 5,800 which has pushed the total pered the city economy any Financial 4,800 Financial 3,300 number of jobs to a new way you try to look at it. record. Why? The cliché that applies is Leisure, hospitality 3,900 Wholesale trade 2,600 The answer lies in the the one about the glass beConstruction 2,900 Manufacturing -700 diversification of the econing half-empty or half-full. Wholesale trade -2,000 Information -1,100 omy, as the accompanying Compared with the rest of charts show. A decade and the country, New York is Manufacturing -6,200 Government -5,400 a half ago, Wall Street work doing very well indeed.The Sources: Independent Budget Office, NYS Labor Department, Eastern Consolidated Note: 2000 wages are not adjusted for inflation. had legal, accounting and 2000 boom (as well as a consulting firms struggling similar one in 2007) led to a to keep up, and they responded by high-paying jobs. painful crash no one wants to repeat. adding thousands of high-paying This time,it’s about education and But the economy has thrived in jobs. Information was booming not health, tourism and retail. Now, the the past for all New Yorkers because just because of tech firms but also idea that these are all low-wage occu- of the trickle-down effects of Wall because their ad spending was mak- pations isn’t true, but they don’t pay Street. We live with the conseing life rosy for publishing and like finance or professional jobs. The quences when the city’s most imbroadcasting. All these were very growth of tech is real, but it just isn’t portant industry takes a back seat. $ 1 000,000,000 , Accelerate the growth of your international business with HSBC. Global markets are opening up to everyone. In fact, 65% of American businesses are currently involved in international markets1. That’s why HSBC has earmarked $1 billion in funding to help qualifying American businesses better manage international expansion and take advantage of global growth opportunities2. There’s a new world emerging. Work with HSBC to be part of it. 1-866-257-3768 us.hsbc.com/accelerate 1. Source: Dun and Bradstreet. Total number of businesses greater than $3 Million in annual revenue doing business internationally or planning to do business internationally. 2. Applies to qualifying loans offered by HSBC Bank USA, N.A to businesses with sales turnover between $3 Million and $500 Million. Other restrictions may apply. United States persons (including entities) are subject to U.S. taxation on their worldwide income and may be subject to tax and other ﬁling obligations with respect to their U.S. and non U.S. accounts. US persons and entities should consult a tax advisor for more information. Trade and supply chain transactions may be subject to credit approval. Other restrictions, including speciﬁc country regulations may apply. Foreign currency exchange rates may apply to certain trade transactions. HSBC Bank USA, N.A. Member FDIC, Equal Credit Opportunity Lender. © Copyright HSBC Bank USA, N.A. 2013 ALL RIGHTS RESERVED. 12 | Crain’s New York Business | July 29, 2013 http://us.hsbc.com/accelerate http://us.hsbc.com/accelerate

Table of Contents for the Digital Edition of Crains New York - July 29, 2013

IN THE BOROUGHS
IN THE MARKETS
THE INSIDER
BUSINESS PEOPLE
OPINION
ALAIR TOWNSEND
GREG DAVID
REPORT: FOOD BUSINESS
FOR THE RECORD
REAL ESTATE DEALS
CLASSIFIEDS
NEW YORK, NEW YORK
SOURCE BREAKFAST
OUT AND ABOUT
SNAPS

Crains New York - July 29, 2013