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Steven Malanga
NYC Pols Save Us from Prosperity
It almost looked like we’d have to take more jobs and revenue from (gasp!) . . . Wal-Mart!
25 February 2005

New York’s pols are doing a victory dance over saving the city, at the eleventh hour, from getting a powerful boost in retail jobs and sales-tax receipts, by pressuring a developer, Vornado Realty Trust, to drop Wal-Mart from its proposed Rego Park, Queens development. In the eyes of the pols, stopping Wal-Mart was supposed to be a victory for small stores in Queens and for the city’s working people who, the Solons claim, were about to be exploited by the big, bad retailer.

But the real victor was Nassau Country, which like other suburban locales has benefited hugely over the years from the city’s efforts to keep out big-box stores—an effort that started long before Wal-Mart came on the scene. To understand just how big a winner Nassau is, consider a few statistics:

Queens’s residents produce slightly more in aggregate personal income every year than the residents of Nassau—nearly $65 billion, according to the state labor department, compared to Nassau’s almost $64 billion. Given those numbers, you would suppose that the two counties would have similar levels of retail employment and spending.

Sorry, you’d be wrong.

The last federal economic census, taken in the late 1990s, estimated that Nassau has about double the annual retail-sales volume as Queens. Not surprisingly, Nassau boasts a much bigger, thriving retail sector. It has 82,000 retail jobs in about 6,200 stores, paying about $2.3 billion annually in wages, according to the Bureau of Labor Statistics. Queens, by contrast, has only 49,000 retail jobs, a whopping 40 percent fewer than Nassau, and only about 5,700 stores, paying a total of $1.2 billion annually in wages.

It’s no mystery why these vast differences exist despite the potential size of the Queens marketplace. For decades, New Yorkers have been leaving the city to shop because city officials keep at bay the stores where their constituents want to shop. In 1993, when the big-box controversy first erupted, the polling firm Leo J. Shapiro and Associates asked New Yorkers about their shopping patterns and found that more than half of city residents leave the city to shop regularly, often visiting stores they can’t find in Gotham. Little has changed since then, as the most recent jobs and spending stats on Queens and Nassau demonstrate.

Given these numbers, you would think that New York elected officials, especially in Queens, would be doing everything they could to recapture these lost sales. But instead Queens pols like councilwoman Helen Sears pretentiously lectured Wal-Mart about its labor practices and said “we can only offer our backs” to the company. No doubt Sears feels morally superior to elected officials in Nassau and in New Jersey and all those other places where Wal-Mart now operates stores, and to all of her own constituents now leaving the city to shop at Wal-Mart stores they can’t find here. Perhaps the councilwoman should try walking into one of the small stores in her district and asking its clerks whether they have health care coverage or profit sharing plans, two benefits that Wal-Mart offers and that the vast majority of small retailers in the city don’t.

But this debate is not about logic as much as it is about the very narrow union politics of New York City. The city’s elected officials can ignore the interests of their constituents because Gotham is one of the few places where union support is still key to victory in some local races.

Of course, the big loser in all of this is the city’s taxpayers. The extra sales-tax income that Queens alone forfeits to Nassau County probably amounts to about $250 million annually, to say nothing of lost property-tax revenues when sites sit empty while big-box stores build energetically in Nassau or Westchester or New Jersey.

But none of this seems to matter, because the next time the city needs money again, it can just raise the property tax, as it did two years ago. Councilwoman Sears, as well as most of the rest of the Queens delegation, were quick to approve that measure, even as they work energetically to keep stores and jobs from coming into the city.

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More by Steven Malanga:
Why the State and Local Pension Problem Will Get Worse
Grassroots Soccer Mania
Brennan’s Revenge
More . . .
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