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Opinion | New York City’s Post-Covid Recovery

One year after the terrifying first wave of Covid swept the city, the availability of federal aid has helped buoy New York through the pandemic. It’s likely that the city will even see a budget surplus for 2022.

Still, New York has been shaken by the pandemic. Unemployment remains high, especially among low-wage workers in the service industries. Many fears remain: Will companies leave the city, no longer wanting to pay high rents if their workers can telecommute? Will property taxes plummet, decimating the city’s revenues? Will restaurants and theaters and bars reopen to the same packed crowds?

Viewed through a lens focused on these problems, the city has not faced this much existential uncertainty since the 1970s. As unemployment skyrocketed during last year’s lockdown and as the number of homicides rose, it seemed quite possible that New York might be headed for a prolonged crisis — similar to the one that brought the city to the edge of bankruptcy in 1975.

Today, in the midst of a race to pick a new mayor, New York seems at a turning point. Although the uptick in crime has garnered the most attention from the candidates, this obscures the extent to which a larger set of political questions are at stake in the election. Just as in the 1970s, New York faces a daunting challenge in which the old way of organizing the city’s life no longer seems viable, but it is not clear what the new one will be.

But there are lessons to be learned from that earlier time of crisis and transformation — and from the social vision that characterized New York City earlier in the 20th century.

For much of the post-World War II period, New York City had an ambitious local government. It ran a free system of higher education (and added new campuses over the 1950s and 1960s), an expansive public health department and more than 20 public hospitals. The city’s leaders embraced the idea that local government could play an important role in building a city open to all.

The fiscal crisis of the 1970s brought an end to these politics. As the city fell into an economic recession — one that emerged in part as a result of national trends and policies with origins far beyond the five boroughs — it was no longer able to generate the revenues that it needed to sustain the public sector. Bankruptcy seemed likely.

It was averted only when the city government agreed to sharp budget cuts in order to obtain federal aid. Tens of thousands of city workers were laid off, class sizes in schools swelled, public hospitals closed, routine maintenance stopped. The city university began to charge tuition for the first time.

Today, New York has been able to avoid a fiscal crisis for reasons that go beyond the availability of federal aid. The city’s economy was in better shape before the pandemic than in the 1970s.

But the bigger difference between then and now is political. After the fiscal crisis, many of the city’s political and economic leaders insisted that budgetary health depended on finding more ways to reach out to business, while relinquishing its old emphasis on the needs of poor and working-class New Yorkers. As the investment banker and city leader Felix Rohatyn put it, “Business has to be supported and not just tolerated.”

In the late 1970s, this approach to city governance led the city to offer Donald Trump (and the Hyatt Corporation) tax abatements worth hundreds of millions of dollars to redevelop the Commodore Hotel near Grand Central Terminal. More recently, it has justified the billions spent on the Hudson Yards complex.

The idea that the city must appeal to the affluent has shaped policy in subtler ways as well. For example, the city’s gifted-and-talented program, with its emphasis on testing 4-year-olds — a program that has disproportionately served children of white and Asian backgrounds — seems designed to keep families who might otherwise go to private schools or the suburbs in the public system. The “stop-and-frisk” police strategy (ruled racially discriminatory by a federal judge in 2013) emphasized the comfort of tourists and well-off New Yorkers over the civil rights of young Black and Hispanic ones.

These underlying assumptions about city government are being challenged. The experience of the pandemic has called into question the old consensus that a focus on retaining business and the wealthy should guide city policy.

As a result, the State Legislature has raised taxes on millionaires, which has helped make it possible for the city to win funding for schools long promised by Albany. The city also plans to use some of its federal money to increase spending on initiatives that will especially affect people who are working-class, middle-class or poor — like public health and early childhood education.

New York’s finances remain perilous; sales taxes and hotel taxes are down, though personal income taxes are up, buoyed by the stock market and also by federal stimulus. The federal funds that have supported recovery will not always be there, raising the question of how programs they fund today will be paid for in the future. The city’s own predictions forecast budget shortfalls in a few years, though these may well disappear if growth resumes. (The Independent Budget Office, a watchdog organization, suggests that the gaps are manageable.)

But a new mayor will take charge in a city where the terms of political debate are changing fast, and in which more and more New Yorkers are asking what they can expect from their local government. Out of the pandemic, is it possible to build a more equal New York?

These concerns have been percolating through the mayoral race, even as they have been overshadowed by fears of crime, scandal, personality and the age-old question of how to define a bodega. But they will be at the heart of the city’s politics over the next four years.

Following the near-bankruptcy of the 1970s, the city turned away from its old traditions of social justice. Today, we might take a different set of lessons from that earlier crisis — this time, from the New Yorkers who slept in fire stations and libraries to keep them open. A city belongs to those who are willing to fight for it, whose lives and whose labor make it run.

Kim Phillips-Fein, a historian at the Gallatin School of Individualized Study at New York University, is the author, most recently, of “Fear City: New York’s Fiscal Crisis and the Rise of Austerity Politics” and “Invisible Hands: The Businessmen’s Crusade Against the New Deal.”

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