Wall Street Isn’t Enough: Finance-Heavy New York Must Recapture Its Economic Diversity
New York City has become too dependent on the financial industry. In 2008, 44 percent of Manhattan wages were earned by workers in finance and insurance; the following year, even after the financial crisis and economic downturn had battered the industry, that share stood at a still-enormous 37 percent. And the track record of one-industry towns isn’t good. No matter how loudly Chrysler’s provocative Super Bowl ad heralded Detroit’s comeback, the Motor City’s population dropped by a quarter over the last decade and now stands at 39 percent of its 1950 peak. In Russia, Soviet-era monocities like Norilsk, a mining hub, are emblems of urban decline. Economic data, bearing out what those examples suggest, show a positive link between industrial diversity and long-run urban success.
New York shouldn’t try to hold finance back, of course, but it should try to reduce the cost and regulatory barriers that limit the growth of other sectors. If Gotham hopes to keep playing its historical role in leading the world’s economy, it needs to welcome companies in other fields—most likely, technology, business services, and a broad range of information-intensive industries.
I spent my childhood in Manhattan, from 1967 until 1984. New York’s economy was far more diverse then than it is today. My friends’ parents were hardly a proper cross-section of the city, but they nevertheless represented a remarkable array of different industries: there were editors and philosophers, art dealers and jewelers, judges and doctors. Show-business parents, including Broadway composers and a character actor best known for a modest role in Shaft, added glamour. Developers and landlords added grit. I can’t recall a single investment banker in the bunch.