In December, as 2010 glittered to a close, life among New York City’s affluent caste looked remarkably like the go-go good old days before the recession. At the opening bell of the New York Stock Exchange on December 1, Citigroup executives, apparently unfazed by their role in the financial crisis, clapped heartily as they celebrated the initial public offering of CVOL, a complex new financial product they had cooked up. At Sotheby’s, collectors at the Magnificent Jewels auction snapped up more than $49 million worth of gilded baubles (including a 27.2 carat Tiffany diamond necklace that sold for more than $3.6 million), making it Sotheby’s highest grossing jewelry sale ever. And at Harry Cipriani, natty-looking power-lunchers waited two deep at the bar for a table, boosting a business that only two years earlier had been troubled enough that management had considered closing off nearly half the restaurant.
“Now it’s busy, as you can see,” says Maggio Cipriani, the Cipriani dynasty’s 21-year-old magnate in training. “We’re picking up a lot.”
Nearly 100 blocks north, in the heart of central Harlem, the picture is noticeably different. Things are not picking up, at least not for Pamela Brown, 51, a poised mother of three who has recently moved into the neighborhood after losing her apartment in the Bronx. Sitting at a local Starbucks, her hair pulled into an elegant twist as if she was about to head to the office, she describes how she was downsized from her administrative job at Bank of America during the great meltdown of 2008 and has struggled unsuccessfully to find work ever since. Is her age to blame, she wonders? Race? The fact that she is still a few credits shy of a college degree?
Whatever the reason, she is getting by on food stamps and welfare, her monthly income reduced to $818 for her family of three. Soap and dry cleaning are luxuries; her youngest son has left his private school. As part of the 1996 welfare “reform” requirements, she spends her days sweeping streets for the city’s mandatory Work Experience Program. “[My friends] have this false sense that I must have done something wrong for this to happen to me,” says Brown. “But I did everything that I thought I was supposed to do.”
Such are the stories of recession and recovery wafting up from New York’s sidewalks these days. On the one side are tales of prosperity and excess, of New York as the poster child for an economic comeback so robust that Manhattan is now the fastest growing local economy in the country. On the other side are privation and struggle.
These disparate realities rarely elbow their way into the same conversation, but they are very much part of the same story, perhaps the story of recession New York. In this story, African-American men lost jobs at four times the clip of their white counterparts; their unemployment rate jumped 9 points, to 17.9 percent, the largest increase of any group during the recession. At the same time, the median salary of managers and professionals leaped 9.5 percent, while nonmanagers and nonprofessionals saw their wages tumble some 4.3 percent. And according to the New York City Coalition Against Hunger, the city’s fifty-seven billionaires (including its billionaire in chief, Mayor Michael Bloomberg) increased their collective net worth by $19 billion between 2009 and 2010, while the number of New Yorkers visiting food pantries ballooned by 200,000 during roughly the same period. Call it the trickle-down recovery that has yet to trickle down.
New York City is not an aberration; it’s just one of the more dramatic examples of the recession’s unequal grip. As labor economists Andrew Sum and Ishwar Khatiwada argued in a February 2010 paper, “A true labor market depression faced those in the bottom two deciles of the income distribution, a deep labor market recession prevailed among those in the middle of the distribution, and close to a full employment environment prevailed at the top. There was no labor market recession for America’s affluent.” No wonder 2009 set records for income inequality. In that year, the chasm between rich and poor measured even wider than it did in 1928, the last time so much wealth was concentrated in so few hands.