The Roosevelt Institute’s Bernard L. Schwartz Rediscovering Government Initiative, Roosevelt Institute | Pipeline, and the Roosevelt House Public Policy Institute recently convened a panel of local policy experts to discuss inequality in New York and how the next mayor can address it. Watch the video below.
The divide between the rich and the poor in New York and across the nation is not an inevitable consequence of technology, globalization, or even human capital, each of the panelists reiterated. “This is the result of policy choices,” Parrott continued. Learn more about what the next mayor should do to tackle inequality and how he can pay for it by watching the video of the event below:
Maya Wiley, Founder and President of the Center for Social Inclusion, emphasized the role of government in creating opportunity. “Fundamentally what we’ve had is a narrative that government gets in the way, rather than recognizing that we created a middle class in this country beginning with the New Deal, continuing with the Fair Deal, based on a series of policies that brought it into being in the mid-20th century. By and large, the middle class as we know it today didn’t even exist until the middle of the 20th century. And we forget that. It wasn’t some natural occurrence.”
Tsedeye Gebreselassie, Staff Attorney at the National Employment Law Project, said a key driver of inequality in New York City has been the stagnation of wages for the working and middle class. New York’s current minimum wage of $7.25 an hour equates to an annual income of $15,000 a year. Our next mayor, she argued, should work with Albany and the City Council to increase the city’s minimum wage, following the example of other high-cost cities like San Francisco, which has a floor of $10.55 an hour.
“Depending on how high you raise that wage, you could impact nearly a million workers living in the city,” said Gebreselassie. “It’s a tremendous policy in terms of boosting the wage floor across the low-wage labor market and putting money in the hands of people who will spend it immediately at local business, giving a stimulative effect to our economy as a whole.”
Lawrence Aber, a professor of psychology and public policy at NYU, said the next mayor should focus public investment on poor children ages 0-5. “We now know that poverty literally gets under the skin and into the mind.” Under-nourishment during the first few years reduces human development and puts children at a lifelong disadvantage. Every dollar invested to beef up New York’s existing child health programs, he explained, goes much further than public money spent to correct developmental challenges further down the road.
When an audience member questioned panelists about how they planned to pay for their proposed programs, answers varied.
The next mayor could use budget policy to reshuffle priorities. For example, tax breaks for real estate development in New York grew 180 percent under Mayor Bloomberg’s administration, to a total of $3 billion a year, Wiley said. Given the booming nature of New York’s real estate market, that public money could be better spent. Aber said the next mayor could use the bully pulpit to advocate for a shift in national budget priorities.
While an increase in local revenue cannot fund all the panelists’ priorities, there is room to raise taxes on the city’s top income bracket, Parrott said. Critics of progressive policy often cite income tax data to emphasize the percentage of city taxes paid by the rich, but Parrott showed that when property taxes and sales taxes are included, the rich, in fact, pay only 25.2 percent of the city’s tax burden while taking home 33.8 percent of total income.
The breadth of the challenge can be daunting, but panel moderator David Jones, President and CEO of Community Service Society, sounded a message of optimism. “I don’t know if a decade ago we could gather this many people together to talk about this as a critical issue,” he told an audience that had filled both auditorium and overflow room. “This is obviously a pivotal moment where people are taking this seriously.”
Join Jeff Madrick, Director of Rediscovering Government, at the Frances Perkins Center in Portland, ME on October 4 for “Rediscovering Government: Making People Matter.” The Frances Perkins Center will present Ai-jen Poo with its Intelligence and Courage Award and Sally Greenberg with its Steadfast Award, and Madrick will moderate a panel discussion. More information here.
Nell Abernathy is the Program Manager for the Bernard L. Schwartz Rediscovering Government Initiative.