The Streets Were Paved with Gold (34 page)

If there is a new middle ground, the Beame administration did not find it. The message implicit in his record $14 billion election-year budget was: Relax, the worst is over. The Koch administration came to office with a different message: the worst was yet to come. Yet, despite Koch’s view that certain contract provisions were “outrageous” and his demand for “give-backs” at the bargaining table, a settlement was tentatively reached with the Transport Workers Union on April 1, 1978, in which the union proudly announced to its members, “We gave nothing back.” This mayor, like others, decided at 3
A.M.
that the cost of a devastating transit strike exceeded the approximately 9 percent cost of the new contract. In June, Koch dropped his sixty-one give-back demands and reached a proclaimed 8 percent pay settlement with the citywide Municipal Labor Committee. The Mayor said he felt compelled to settle not so much to avoid a strike as to meet Washington’s demand for a settlement before Congress would take up any city loan legislation. Compared to previous settlements, these were modest. Compared to the city’s proclaimed four-year budget gap, the contracts were extravagant. The city might not be able to afford the overall $1.1 billion extra cost of a two-year labor settlement for all of its workers; yet it felt it couldn’t afford not to settle. At least for a while, Koch’s new administration had achieved “peace in our time.”

DR. SAMUEL JOHNSON
, according to legend, once absconded with a housemaid for a brief holiday. Mrs. Johnson, ever vigilant, followed. As the Doctor and the maid thrashed under a coverlet, Mrs. Johnson burst into the bedroom and exclaimed, “My dear. I am surprised!”

“No, my dear,” corrected her husband. “You are shocked.
I
am surprised!”

In the jockeying between New York and Washington, each side vies for the role of the shocked wife. Each claims the other is cheating. Most New York officials believe there is a national urban crisis and the city’s afflictions are common and require national solutions. Many in Washington and around the country believe they are unique to New York and require local solutions. New York views itself as a bellwether city; the country views New York as a bastard child. Who is right is as important a question as whether Washington is to blame.

Is New York unique?

Governor Carey thinks not. Addressing the Congress in 1975, Carey capped his plea for seasonal loans by claiming, “I cannot deny that there is a contagion in New York which is about to sweep across the nation. Don’t kill us because we are ill.” A similar thought was expressed by Jack Newfield and Paul Dubrul in their book
The Abuse of Power.
It was “a myth,” they say, to assume
that “New York was different from other cities; it had tried to do too much for its citizens.… New York was the Typhoid Mary of cities.… If New York alone was the victim of this fiscal malady, it must be quarantined.” The polar view is expressed by economist Milton Friedman, who said that “New York is a special case. New York’s lavish spending reflects the most welfare state-oriented electorate in the U.S.”

Who’s right? To unravel this puzzle, let’s isolate seven broad indicators of a city’s life—its
social and economic characteristics, government and labor cost, fiscal health, debt and politics.

New York’s size is unique. No other American city approaches 7.5 million population (Chicago, the next largest, has about 3.5 million people). And New York’s official population figures do not include its extraordinary number of illegal aliens, variously estimated at from 500,000 to 1.5 million people. New York’s density is also unique. Tokyo, for instance, has more residents (11.7 million) but almost three times as much space—840 square miles—as New York. An average of 26,318 people are packed into each of New York’s 300 square miles—67,000 residents per square mile in Manhattan. The average density of the rest of New York State is only 217 people per square mile. According to Thomas Muller of the Urban Institute, the average density of older cities is half that of New York (11,660), and growing American cities average but 4,000 people per square mile. Great size brings special problems. Muller has estimated, for example, that larger cities spend about twice as much per citizen to provide the same services as smaller cities. “Any city that abandons more housing in two years than the entire housing stock of Des Moines is certainly not typical,” writes historian Richard Wade of New York.

Large, older cities share a common characteristic: they are losing population. Between 1970 and 1976, the nation’s population expanded by 5 percent—63 percent of this increase taking place in the Sunbelt states. In that same period, New York City’s population shrank by 442,000 and the Northern states by 2 million people. Central cities, according to George E. Peterson of the Urban Institute, were drained of an average of 345,000 people between 1960 and 1970; from 1960 to 1973, Cleveland, Pittsburgh, St. Louis and
Buffalo—to name a few—lost one-fifth their total populations, suffering a much steeper rate of decline than New York. The suburbanization of America continues, with older cities contributing their middle-income residents to newer city-suburbs like Houston or Greenwich.

Physically, the older cities share a common malady: their aging infrastructure is crumbling. Cursed with an abundance of pre-World War II construction and dwindling resources, New York is not the only city racing physical catastrophe. Boston’s leaking water pipes result in the loss of half its fresh water; the antiquated sewers of San Francisco vomit raw sewage into its bay and in 1977 resulted in eighty overflows; a young boy drowned when Philadelphia’s clogged storm sewers flooded. Unlike Dallas, aging metropolises don’t own computers that pinpoint potential breakdowns of their underground pipes, wires, water mains, tunnels. Like New York, they often paint, rather than repair, their rusting bridges. Surveying the capital facilities and reduced capital expenditures of older cities, a report from the Joint Economic Committee of Congress said neglect “appears to be the single greatest problem facing our nation’s cities.” Years of neglect spring from a common preoccupation with short-term needs. “Out of sight, out of mind,” moans Philadelphia’s Water Commissioner, Carmen Guarino.

The proportion of New York households living below the national poverty standard is less than the average for declining cities, as is New York’s percentage of black families. In 1974, New York ranked 6th in the percentage of welfare recipients (12.4 percent), behind Boston (16.9 percent), Baltimore (16.3 percent), Philadelphia (16.2 percent), St. Louis (15.8 percent) and Newark (14.4 percent). And New York is not alone in suffering high welfare fraud. A recent city survey concluded that in the first half of 1977 there were seven cities with greater ineligibility rates. Contrasted with New York’s 8.4 percent—which seems understated—were Boston (13 percent), Washington (12.1 percent), Chicago (12 percent), Akron, Ohio (11.5 percent), Baltimore (9.7 percent), Kansas City, Missouri (9.5 percent) and Memphis (9 percent). Still, New York was considerably above the proposed federal standard of 3 percent.

The problem of too many poor people ails most older cities, and some new ones. Their economies behave less as satellites, clinging to national growth patterns, than as whirling meteors lost in space. The number of poverty families declined by 2.3 percent in the U.S. between
1970 and 1974. In that same period, the number of poor residents swelled by 8 percent in New York and by more elsewhere. The disparity between relatively rich and poor cities is spreading. George Sternlieb, director of the Center for Urban Policy Research at Rutgers University and one of America’s foremost urbanologists, estimates that while the median income of New York City tenants was 8 percent below the national average in 1965, by 1975 the gap had widened to 30 percent. And New York’s lagging income growth is unique. “The per capita income growth in the City,” Alan Campbell and Roy Bahl of Syracuse University wrote in 1976, “is a full 10 percent lower than that in the nation’s ten largest central cities. Using this disparity, the
income potential
of the City can be estimated—if per capita income in New York City had grown at the same rate as that in the ten largest cities over the 1969–73 period, it would have reached $6,254 by 1973, an amount in fact $404 higher than the actual 1973 level.”

New York’s declining public school enrollment is less unique. Between 1970 and 1975, its public school population slipped 3.8 percent—the smallest drop among the nation’s fifteen largest cities. St. Louis and San Francisco, for instance, lost about 22 percent of their enrollment; New Orleans, 14.3 percent; Philadelphia, 10.2 percent; Los Angeles, 6.2 percent. And the flight of white pupils from the public schools is not a New York phenomenon. A survey of twenty-nine cities by Diane Ravitch of Columbia Teachers College reveals that New York’s white school population decreased by 29.8 percent in eight years (1968–76). Twenty-four cities experienced sharper losses, including Atlanta (78.3 percent), Detroit (61.6 percent), San Francisco (61.5 percent), Chicago (40.4 percent). Even booming Houston lost 45.2 percent of its white school population. Though few of the twenty-nine cities had a majority non-white population, all but eight had a majority non-white school population. New York no longer calls them “Public Primary Schools for Colored Children” as they did in the 1840’s, but they might as well.

New York may rank first in the perception of crime, but not in the actual incidence of crime. In the first nine months of 1977, according to the FBI’s
Uniform Crime Report
statistics, eleven other cities had higher crime rates. Three growing cities—Phoenix, Denver and Dallas—were ranked 1, 2 and 3. Boston, San Francisco and Detroit had more crime per capita than did New York. The city ranked 12th in murders, 18th in forcible rape, 3rd in
assaults, 21st in larceny, 2nd in robbery, 12th in home burglary. The Police Department reports that in 1977, for the first time since 1973, the number of violent crimes in New York declined. Of course, none of this news is any consolation to, say, senior citizens, who, when they brave the outdoors, clutch their handbags as if they contained uranium. Or to those who recall that in 1830 there were no murders in New York, no cases of arson, one rape, thirty-eight burglaries and four manslaughters.

There is comfort—and discomfort—in the social characteristics of New York’s population. New York is not a bastard-child. It shares many of the same social problems—too many poor and too few middle-income people, spreading segregation, a worn-down infrastructure, eroding neighborhoods, slums, youth gangs, haunting fear of crime. But, one might ask, if New York is similar to other cities, why has no other major city confronted bankruptcy?

The economic trauma of New York is on display elsewhere. The percentage of poor people is greater in the South than in the North. Even bustling Houston has a seventy-three-square-mile distress zone—half the size of Washington, D.C.—where one of four residents lives below the poverty line and one of ten lives at half the poverty level. According to David T. Stanley’s 1976 monograph
Cities in Trouble
, New York is one of twelve major cities with a declining or static tax base. In 1976, three cities had higher unemployment rates—Detroit (13.1 percent), St. Louis (12.8 percent), Philadelphia (11.3 percent). New York’s 11.2 percent unemployment contrasted with the U.S. average of 7.7 percent. The average for all central cities was 9.2 percent. New York’s economy brightened some in 1977 and early 1978 (for the first time in eight years there was a small gain in employment). The city’s unemployment rate dipped to 9.5 percent, reflecting a surging national economy. That’s the good news. The bad news is that New York, from December 1976 to December 1977, ranked 1st in unemployment. Philadelphia’s rate dropped from 11.3 to 7.5 percent; Detroit from 13.1 to 6.7 percent; St. Louis from 12.8 to 7.3 percent. New York benefited from national economic growth, but not nearly as much as other cities.

Being somewhat divorced from national economic growth is not
new to New York or other cities. When the U.S. entered a recession in 1969, New York followed. When the nation rebounded, for a variety of reasons the city did not. It was drained of 660,000 jobs between 1969 and 1976. The nation gained 8.3 percent more jobs between 1969 and 1975, while the city lost 11 percent of its employment and most older central cities declined or failed to keep pace with the nation’s growth. “If employment in New York had grown at the national rate,” Campbell and Bahl’s 1976 study found, “it would have 1.03 million more jobs than it now has, nearly 25 percent more.” A 1977 study of Philadelphia by Sternlieb and the Rutgers Center for Urban Policy Research showed that if the City of Brotherly Love “had kept pace with the nation” between 1970 and 1975, “it would have gained more than 192,000 jobs. In this period, Philadelphia hemorrhaged 11.9 percent of its jobs.

The Northeast is the only region to suffer a net job decline between 1969 and 1975. It is commonly assumed that New York’s employment woes are the same as the region’s. Not true. If New York City’s job growth imitated that of other Northeastern cities between 1965 and 1973, the Campbell/Bahl study found, the city would have generated 451,000 additional jobs. “Thus,” the study somberly concluded, “the characteristics of the regional location and central city status explain about 60 percent of the gap between New York City’s employment growth and that of the nation as a whole. Still, 40 percent of the difference remains unexplained and it is this 40 percent which differentiates New York City from its region, the Northeast, and from other large central cities. To this extent, New York City’s economic situation is unique.” Of fifty cities studied by the Bureau of Labor Statistics, between June 1975 and June 1977, only two lost jobs—New York and Philadelphia. While New York suffered a loss of 4.4 percent of its jobs and Philadelphia 0.7 percent, Newark gained 3.4 percent, Detroit 8.5 percent, Atlanta 6.6 percent, San Francisco 4.5 percent, Washington 3.7 percent, Cleveland 3 percent, Buffalo 2.2 percent, St. Louis 1.7 percent. And the entire Northeast, though growing at one-third the rate of the next region, still gained 2.1 percent.