The Trend Away From New York City

Steven Malanga reports:

What’s happening now is part of a 50-year-long cycle in which city government—and its partner in crime, Albany—have made the suburbs increasingly attractive to businesses by raising taxes, increasing regulation, and often failing to deliver basic services well. As a result, the march of businesses out of Gotham has been striking. A city that once housed the headquarters of 128 Fortune 500 companies is now down to 44. Harder to measure is the growth that never took place here, because businesses avoid the city, like those European executives who locate in the suburbs and call it New York.

But to get a glimpse of what New York has been missing, consider this: the engine of New York’s economy, Wall Street, added nearly as many jobs in New Jersey (+143,000) as it did in New York (+154,000) from 1970 through 2000. And things are only likely to get worse: As Nicole Gelinas pointed out (“Gotham Needs Wall Street; Does Wall Street Need Gotham?”, Winter 2006), New York’s grip on the financial services industry is becoming more precarious every day.

This continual long-term expansion outside the city has stranded New York in a 50 year boom-and-bust jobs cycle. As a result, today New York City has about 175,000 fewer jobs than it did in 1969, when John Lindsay was mayor and Nelson Rockefeller was governor, though its population is larger today by some 200,000 residents.

New York is the high cost city.