Neil deMause: The Website

Apparently not everybody reads Metro NY. Two weeks after I debunked the claims that the recent theater stagehands’ strike was costing New York City $2 million a day, this week’s New York magazine declaims, in 30-point type no less:

…the stagehands’ strike kept hundreds of people out of work and cost the city an estimated $38 million…

As I wrote in my Metro column: “That’s [only] true in terms of ‘economic activity,’ a nebulous creature that includes all dollars spent on city turf. In terms of fiscal impact - actual city tax dollars lost - the three-week total was likely closer to $1 million, according to the comptroller’s office.”

A letter to the editor will be forthcoming. Then we can see if New York mag is as diligent about corrections as some other news outlets are.

Starting today, I’m going to be writing a weekly op-ed each Monday for Metro New York, which for the uninitiated is one of New York’s two free daily papers. (Metro is most readily identified as “the green one.”) For my debut column, I revisit a topic I touched on here before: how much the recent theater strike really cost the city economy, and whether the numbers being thrown around by the news media are really justified.

If most New Yorkers gave much thought to the stagehands’ strike - other than those in the theater district, who were either bemoaning lost customers or cheering the suddenly uncrowded sidewalks - it was because, we were told, the dispute was of vital importance to the city. The shuttering of one of the city’s key industries, news coverage incessantly repeated, was costing the city millions of dollars every day Broadway remained dark… [read more]

[NOTE: I haven’t quite figured out the inner works of the Metro website just yet, so until I do, the only link I have is to an image of the actual print edition page.]

Stagehands at most Broadway theaters are on strike, and here’s how Newsday reported the story today:

The stagehands’ union took its cause to the public yesterday, the second day of a strike that has shut 27 Broadway theaters and cost the city economy an estimated $17 million a day in the busy pre-holiday season.

Wondering where that $17 million figure comes from? According to Newsday’s sister paper, the L.A. Times, it’s an estimate by the League of American Theatres and Producers - in other words, the people the stagehands are striking against. Complaining about the economic impacts of labor uppityness is a time-honored tradition - the city did the same thing during the recent transit strike - but as in that case, it misses two main points.

First off, the $17 million figure is actually the cost to “Broadway” - in other words, the amount of lost ticket sales per day (and, perhaps, the lost spending by theater workers no longer drawing paychecks). The city only collects a small fraction of that in the form of income, payroll, and sales taxes, so the actual effect on city taxpayers is far smaller.

The bigger problem, though, is that it overlooks what economists call the “substitution effect”: People who don’t spend money one place will often spend it somewhere else. And Newsday should have known this, given that on the very same page as the dire warnings about economic ruin, it ran an article by reporter Daniel Massey headlined “Visitors find other things to do” (not online, apparently, or if it is I can’t find it in the mess that is the Newsday website):

A select few got into eight shows that continued to run because they are housed in theaters covered by separate contracts. Most improvised plans - eating, drinking, shopping and visiting the city’s non-theater attractions.

“It’s New York. What’s the problem?” said Lilach Yanai, 37, a computer programmer from Tel Aviv, who had planned to get tickets to a show, but instead said she would tour the New York Public Library and check out Van Gogh’s letters at the Morgan Library & Museum.

The only way the theater strike would have a significant effect on New York’s economy would be if it lasted long enough that tourists started cancelling their vacations here out of fear that they wouldn’t get to see “The Lion King.” Otherwise, what’s bad for Broadway will likely be good for 5th Avenue.

UPDATE (11/15): The city comptroller’s office has downgraded the estimated cost to the city economy to $2 million a day, based solely on the 18% of theatergoers who are making day trips into the city to see shows. (Actual impact on city tax revenues would be an even slimmer fraction of that.) The theater operators now say the $17 million figure is a “worst-case scenario.”

In this week’s New Yorker, economics columnist James Surowiecki takes on Elizabeth Currid’s book “The Warhol Economy,” which argues that the art/music/fashion industry is more vital to New York City’s economy than even Wall Street. While agreeing that art and culture have economic value, Surowiecki takes issue with Currid’s conclusion that the soaring cost of living in the city is threatening to kill its golden goose:

Currid’s concerns are familiar ones by now: as the city gets wealthier, it becomes harder for young creative people to live here, and, if they stop coming, the well of creativity will dry up. Her answer is a series of industrial-policy prescriptions, including subsidized rents for artists, more support for things like Fashion Week and the Whitney Biennial, and a more welcoming approach toward night clubs (where, by her account, much of the culture industry’s business actually gets done).

Currid’s desire to subsidize creativity is understandable, but her insistence that the culture industry is on the verge of crisis is refuted by her own work. Unless you think that network effects in the art-and-culture business are suddenly going to stop mattering, creative people are still going to find ways to make a living here, because they must, in order to succeed. And, empirically, if you look at the history of New York in the twentieth century there is little evidence that a more expensive New York is a less creative New York. To be sure, there was a tremendous artistic efflorescence in the nineteen-seventies, the worst decade of the century for the New York economy. But, in the twenties and the sixties, cultural booms coincided with economic ones, while the explosion in the number of art galleries, bands, and boutiques in the past decade makes it hard to believe that New York is suffering from too little art and culture.

Surowiecki’s conflation of “art galleries” and “creativity” aside, his argument misses Currid’s point (as she described it in this Village Voice profile): That as New York City increasingly becomes prohibitively expensive to live in, artists are forced not just out of the city but to the fringes, making it harder to have a creative hub like the Lower East Side circa the late ’70s.

And as for the ’20s and the ’60s, there’s plenty of reason to believe that housing availability aided in those creative boom years as well. While those decades may have been economic good times, they also coincided with big increases in the city’s affordable housing stock. In the years leading up to the ’20s, the expansion of the city subway system was opening up fresh territory for residential neighborhoods, with 420,000 new apartments built during the decade (according to the Encyclopedia of New York City); the Harlem Renaissance was largely made possible by the fact that Harlem’s previous Jewish residents cleared out to places like East Tremont and Brownsville.

In the ’60s, meanwhile, not only was white flight making room for bohemians - I grew up in a middle-class rent-stabilized apartment on the Upper West Side that was originally built for rich people several decades earlier - but subsidized housing programs like Mitchell-Lama were greatly expanding affordable housing. Bob Dylan may not have lived in Co-op City, but he wouldn’t have been able to rent a cheap Greenwich Village apartment without it.

The way to do a real analysis of Currid’s claims would be to look at historical rent data - I couldn’t find any in a quick search of the web and reference books, but presumably Surowiecki could send an intern to dig some up - and see if creative boom years really have coincided with tough housing times in the past. But why bother with research, when glib contrarianism will do?