By Jennifer Diagostino
Last week, President Obama toured upstate New York to talk about creating a “better bargain for the middle class.” His vision is that every American has a good job, a good education, affordable health care, a secure retirement and a chance at home ownership.
He also acknowledges that the national economy has not been moving in the direction of this vision for the past decade. Even before the economic crisis hit, working- and middle-class families were getting squeezed, while the wealthy few were doing better and better. Since the economic crisis, unemployment has slowly dropped both nationally and in New York State. The Department of Labor reported last week that the statewide unemployment rate of 7.5 percent is the lowest we’ve experienced since July 2009. Unfortunately, job growth has primarily happened in the low-wage sector. People are getting back to work – but often with less security and lower wages than before.
So how can New York move forward? Many of Obama’s proposals, including investing in clean energy and rebuilding the nation’s infrastructure, have been blocked by House Republicans. With bold leadership and greater bipartisan cooperation, Gov. Andrew M. Cuomo and the State Legislature could make better progress.
Already, infrastructure projects are under way, and more could be undertaken. New York has been making investments in the high-paying advanced manufacturing sector, which are beginning to pay off. There is also great potential in transportation manufacturing, solar energy and investing in workforce development and education.
Increasing New York’s investment in the new economy and in building the middle class will require a shift in culture and policy. For too long, New York State’s economic development policy has centered on providing lavish subsidies to corporations in the hopes that jobs and wealth will trickle down.
When there is adequate reporting, it is clear that this approach has failed to create the good jobs New Yorkers need, and it has come at too high a cost. New York spends about $7 billion each year on such efforts; that means $7 billion in revenues are taken away from our communities, schools, infrastructure and the services we all rely on. While spending on corporate subsidies remains consistently high, the state has dramatically reduced funding for the SUNY system.
New York needs to reduce spending on wasteful economic development subsidies that fail to create jobs, and reinvest this money. Innovative ideas and leadership from New York State helped pull the country out of the Great Depression and created the longest period of prosperity and growth of the middle class in history. It’s time for New Yorkers to work together once more to get a better bargain for the middle class.
Jennifer Diagostino is executive director of the Coalition for Economic Justice.