New York City’s next mayor needs to care about Big Business even more than Mike Bloomberg did

The next NYC mayor should be pragmatic about business.
The next NYC mayor should be pragmatic about business.
Image: Reuters/Darren Ornitz
We may earn a commission from links on this page.

Next week, New York City voters head to the polls to elect a new mayor. After 20 years of Republican mayors in this Democratic city, it is likely that Bill de Blasio, the Democrat who ran without support from big business, will take the reins.  It would be reasonable to conclude that business leaders, who have played a defining role in the life of the city for several decades, will no longer matter under a progressive, left-of-center mayor. But that would be wrong.

In fact, it will be far more important for the next mayor to establish a partnership with business than it ever was for mayor Mike Bloomberg. Not since governor Nelson Rockefeller has there been a political figure in New York with the personal resources and capacity to pursue big ideas that Bloomberg brought to elected office. Like Rockefeller, he attracted superstars to work in and with his administration and the results have been transformational for New York City’s physical landscape and global profile. Bloomberg could also reach out and touch anyone in Washington, DC or around the world when the city needed help—and often did so.

Without these personal resources and long-standing relationships, the next mayor will be starting almost from scratch with big business and with an agenda that business is not necessarily prepared to embrace. On the other hand, the mayoral campaign has raised expectations that city government can both maintain the current quality of life as well as help solve a litany of social and economic problems affecting working and middle-class New Yorkers. Meeting these expectations will be no easy task, under the best of circumstances, but it will be impossible if the mayor is at loggerheads with the city’s largest private sector employers, major institutions and entrepreneurial job creators.

The new mayor will have the additional challenge of working around hurdles already in place. To start with, he will have to deal immediately with a budget deficit and open contracts with 153 municipal unions, some of which have not had a contract for as long as five years. The city’s fiscal troubles will almost certainly be exacerbated by continued reductions in federal and state aid upon which the city depends. Even with an $80 billion budget, it is impossible for local government to meet the demands of more than a million residents who live in poverty and to finance the infrastructure required to sustain the country’s primary business center and gateway to the global economy.

There are also challenges emerging from the city’s successful transition to the innovation economy. On the bright side, the growing high-tech sector has generated tens of thousands of new jobs and revived long-distressed neighborhoods, particularly in Brooklyn. But large numbers of New Yorkers are unqualified for these new economy jobs. Many more are suffering the consequences of the rising cost of housing that has made the city increasingly unaffordable to working and middle class households.  To gear up the education, workforce development and affordable housing industries to help the city tackle these major issues will require public-private partnerships between government and business, with substantial private resources committed to supplement what the city can do on its own.

In addition to internal fiscal and economic issues, New York is facing increasing competition from other cities around the country and the world for the talent and the large business operations that anchor the city economy. Over the past decade, New York has lost more than 100,000 middle wage jobs, largely as a result of corporate downsizing and relocation of operations to lower cost locations. This trend is growing as other regions, from Florida to Singapore, North Carolina to London, roll out relocation incentives for companies and their employees that are tough for New York to match.

There is plenty of historical precedent for liberal New York politicians partnering with business to tackle big challenges. The city was saved from bankruptcy in the 1970s through the collaborative efforts of business and labor leaders under the direction of then Governor Hugh Carey.  In the 1980s, the business community worked with mayor Ed Koch to rebuild burned-out city neighborhoods and to halt corporate and middle-class flight to the suburbs. Under mayor David Dinkins, the business community embraced a tax increase to expand the police force in order to launch the war on crime. And Bloomberg’s first budget initiative in the wake of the 9/11 terrorist attack was to secure the support of business for a substantial increase in the real estate tax assessment to help fund recovery and rebuilding.

For Bloomberg’s successor, sustaining the commitment of big business to the city will not be easy. Other jurisdictions are actively wooing business operations and executive talent.  Moreover, business executives tend to focus their political attention on the government entities that regulate their companies, primarily Washington, DC and, to a lesser extent, state government. Their interest in municipal government is largely civic, with an emphasis on safety, education and quality of life for their families and those of their employees. Recently, local campaign finance laws and federal “pay to play” restrictions have done much to further discourage corporate or Wall Street engagement with state and local politics by effectively eliminating their ability to make meaningful campaign contributions or even endorse candidates.

New York City mayors and business leaders both ultimately tend to be pragmatists who want to make things work. Bloomberg’s business-like approach to running the city is what most of the city’s employers and job creators are looking for in his successor. Their greatest fear about the next mayor is not left-wing ideology, but rather that things fall apart. To the extent they care about the city, which is a great deal, business leaders will want to help the next mayor be successful, regardless of his politics.

Conversely, the next mayor will surely be responsive to the concerns of the electorate, if not to those of business. Recent polls show that the top priority for most New Yorkers is good jobs. Businesses with more than 500 employees today account for more than 1 million of the city’s 3.4 million private sector jobs, and virtually all the jobs in big business pay far more than a minimum wage and offer generous benefits. Moreover, the multiplier of these jobs in the local economy is at least 2:1.

At $657 billion in economic output, New York is the world’s biggest city economy. To maintain that preeminence, it will take a network of government, labor and global business leaders , as well as world class academics and urban thinkers, powerful philanthropists, artists, scientists, designers and an emerging generation of tech entrepreneurs. So while the business community will miss Mike Bloomberg, the end of the Bloomberg era cannot mark the end of an era in which big business matters to the city.