Category Archives: Economy

Fourth of July Expenditure

Economy, , ,

expenditureHow much money are New Yorkers spending on their Fourth of July celebrations?  It seems quite a lot. The biggest attraction is probably Macy’s Fireworks, now in its fortieth year.  That causes a lot of expenditure and huge attention.  Millions came to watch it live – America’s largest firework display on the day – with Queens and Hunters Point Park being popular viewing areas.  Macy’s promised it would be their biggest one since the 2000 millennium party they provided.  And it was, with 56,000+ pyrotechnic shells, 22 hues and the New York debut of pyro-writing in the sky, it was a show not to be missed.  And very patriotic at that, with everything synchronized to America’s most patriotic songs.

And talking of the songs of Americas, the US Air Force Band played ‘This Land is Your Land’ and ‘Stars and Stripes Forever,’ while Jennifer Holliday performed ‘America the Beautiful.’

From fireworks and music we move over to food and Americans sure do know how to enjoy the odd hot dog or 7!  According to the NRF $6.77 billion is spend on food for the day.  It helps of course that July is National Hot Dog Month. The National Hot Dog and Sausage Council has estimated that out of the 20 billion hot dogs that Americans consume on average each year, 155 million are consumed on July 4.  And then of course there was tremendous expenditure on all the picnics, barbecues and baking contests dotted around the nation in red, white and blue.

Other expenditures included a total revenue of $1.09 billion on fireworks and $4.4 million for imported flags ($4.3 million from China). So all in all, celebrating America’s independence is truly a “fourth” to be reckoned with when it comes to spending money in New York and other patriotic regions in the States.

 

 

Giving a Voice to Small Business Owners

Economy, ,

small businessSoon, small business owners in Western New York will have a team of advocates working on their behalf.  SEAWNY (The Small Enterprise Alliance of Western New York) was recently launched with a goal of “fill[ing] the void in the local market.”

How is this to be achieved?  By bolstering networking for this demographic providing it with the resources to facilitate the process of launching, operating and maintaining a small business in the area. Along with this there will be seminars, webinars and an annual conference.

According to President and CEO of Welke Custom Brokers USA Inc. (and one of the steering committee members that oversaw the organization’s establishment), the aim of SEAWNY is to: “bridge that gap between what’s happening at the large chambers and what’s happening at the small chambers.”  SEAWNY is taking its organizational model from Northeast Ohio’s COSE – the Council of Smaller Enterprises.

In other good news for SMEs in New York, small firms in the NY metro area received considerably more loans than the national average.  Data was received from the monthly analysis of 1,000+ small business loan requests conducted by the Biz2Credit’s Small Business Lending Index.  In general though, looking at America as a whole, it was found that over the last 12 months there has been a gradual increase of loan approvals.  Further, in May, a new online loan offering program for smaller loan investments of between $10-35,000 was launched by Wells Fargo.

What the New City means for New York City

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NYCNew York City is getting a New (York) City.  At the end of May, a ribbon cutting ceremony took place at the first tower over Hudson Yards – an entire neighborhood smack, bang in the middle of Manhattan.

An endeavor taken on jointly by Bloomberg, Stephen Ros (of Rleated Cos.) and the previous Mayor (Michael Bloomberg), billions of dollars went into  his project that began 10 years ago.  Former deputy Mayor Dan Dotoroff should also be thanked.

It began with Bloomberg’s plan to rezone the Far West Side for mixed commercial and residential use, financing a way for the MTA to extend the 7 line, providing easier access to the rest of the city. The establishment of what some are calling “the largest private real-estate development in US history” should be finished in 2025.

And of course, this is going to result in some additional 55,000 jobs. It will also comprise 28 acres filled with homes, parks and stores and will be occupied by 125,000 residents, etc.  For companies wishing to move to the new area, they will have 10 million square feet of office space from which to choose. Some big names have already signed up such as: Coach Inc., L’Oreal and The Boston Consulting Group and in the future CNN, HBO and TimeWarner are lined up.

This is fantastic news for NYC’s economy.  According to an Appleseed study, it is thought that a staggering $18.9 billion will be contributed to the economy PER YEAR by 2025, with activity comprising 2.5% of NYC’s GDP, yielding $500m in taxes per annum. What’s even more incredible is that until now, this area was pretty much not even used, comprising empty industrial spaces and railroad yards.

And if that wasn’t enough to get New Yorkers happy it seems that Americans are not the only ones seeing the potential of NYC investment. According to president of Stribling & Associates, Elizabeth Ann Stribling-Kivlan (who spoke at The Real Deal’s New York Real Estate Showcase and Forum recently) “Buyers from India and Singapore — countries with a growing middle class — see New York as a solid investment opportunity… They see it as a really good place to park their money.” One of the panelists present, Raphael De Niro of Elliman, echoed this sentiment when he said that “New York “makes sense” for Indian investors who speak English but are priced out of the overheated London market, where they may not find properties between $1 million and $3 million.”

So New York is clearly becoming a recipient of some big monies.

 

How Airlines Make Money

Economy, , , ,

airlinesWell, one of the additional new ways they are making money is by charging for skipping the bureaucracy at airports.  Well, not exactly skipping it, but being able to “fly” through airport security rather than waiting on line for hours on end that has, in many cases, led to missed flights.

CEO of Skylark, Paul Tumpowsky, explained how some US carriers are now offering fee-based programs to assist travelers with airport security.  Tumpowsky, who heads the New York City a travel consultancy firm gave examples including: Delta Air Lines (offering a separate entrance at LAX’s Terminal 5 for Delta One business class passengers to check in via a private elevator through expedited security.

Then there is the Five Star Service program for first- and business-class customers offered by American Airlines at 12 domestic and five international airports.  Prices start at $250 for the first adult and then #75 for each additional adult.  Services include: priority security screening; curbside meet-and-greet.

Next there is JetBlue (for a much lower fee).  At a variety of domestic airports, passengers can now purchase an add on to their ticket for a mere $10.  The Even More Speed tickets gives them access to expedited security lanes.  For a comfier journey once up in the air, the additional perk is the Even More Space ticket that provides one with a roomier seat.

The expedited screening program offers passengers access to TSA precheck security lanes (if they are eligible) for a mere $85 for five years.  In this program, one does not have to remove their shoes, belts or light jackets, or remove their laptops, or liquids from their luggage.

While this is all very good news for New York travelers willing to pay the extra bucks, truthfully the problem shouldn’t really exist in the first place.  According to a recent article by the Editorial Board of AM Network, “The inability of the Transportation Security Administration to effectively and efficiently screen travelers at New York’s major airports leaves little choice but to demand that the work be done by private business… The overall airport experience is dreadful, swinging from farce to intimidation as screeners miss too many prohibited items and long lines with waits of more than 20 to 25 minutes result in missed flights.”

So perhaps rather than private companies stepping in, official government bodies should make a ruling to prevent this from being such an issue.

NY: New Wage and Leave Policy

Economy

wage-increaseIn a somewhat radical move for legalized wage modifications, New York is making an impact. Its recently-accepted wage and leave policy will be having a big effect, in particular, on the state’s hospitality industry.  This wage increase was announced mere hours after California one was announced, which was indeed the very first state in America to approve a $15 minimum wage.

The flip side of this is – according to restaurant owners/managers – menu prices will have to increase. However, the new policy has been hailed as “a spectacular victory for the national labor rights movement, which has been buoyed by striking fast food workers who first called for a $15 wage in 2012.”  It’s time. And now it’s happened.

Around 50% of US states have been gradually increasing minimum wage from $7.25 but only California (and now New York) have reached the $15 mark. Others are considering it, such as Washington DC which went up to $11.50, might make the additional hike too.

The New York minimum wage increase was approved by a 26 to 12 vote in the Senate on 31 March. Just before they voted, Senate President Pro Tem Kevin de León stated: “At its core, this proposal is about fairness.” Assemblyman Sebastian Ridley-Thomas echoed this sentiment by arguing: “This is an argument about economic justice. Justice is not something that can be negotiated or compromised.”

In practical terms, this is how it will work: any NYC company with at least 11 staff members will get an increase to $11 by the end of this year and then a further $2 every year until it gets to $15 (by 2018). Companies that have 10 or less members of staff will be given until 2020 to get to $15. And then for the rest of the state (which includes the wealthier suburbs), they will be subject to a slower increase pace.

In addition to the wage increase, it is hoped that the 12 week paid leave parental plan will become law.

New York Bans the Box

Economy,

jobsNew York has been taking a key role in the establishment of legal policies to protect the unemployed who are looking for jobs.  One such way that it has done this, is various laws it has put into place.  For example, its nullification of the mayoral veto which resulted in the 2013 enactment of the “strongest-in-the-nation legislation” that prevented employers from not considering or hiring job applicants who are perfectly qualified for the position but just happen to be unemployed.

In addition, in April of 2015, a civil rights bill – that was sponsored by Brad Lander – was passed that prohibited employers from not considering potential employees based on credit history.

These New York laws that are favoring employees were just recently put into practice. Just last month, Big Lots and Marshall’s received a $195,000 fine for infraction of the ‘ban the box’ law in Buffalo which prevents employers from asking job seekers to disclose their criminal history.

It is believed in New York – by proponents of these civil rights laws – that these laws will actually help hiring decisions since the pool of potential employees will be substantially enhanced.

Further, with the Work Opportunity Tax Credit in place, keeping to the ban the box law brings with it fiscal incentives.  Employers who take on applicants from a specific demographic (such as those with previous convictions), are given a federal tax credit which is established by the wages paid to the employee.  This can be anywhere from $1,200 to $9,600.

In addition, for those bosses who argue that convicted employees are more likely to engage in embezzlement, fraud or theft because of their histories, they can apply for a federal fidelity bond.

This news indicates that New York is fast becoming the pioneer for the rest of the nation in opening up work opportunities for those who have traditionally been rejected due to preconceived ideas.

 

 

Taxes and New York City

Economy, ,

taxesTaxes and New York City have always gotten a bad rep. In fact taxes and the whole of the US have a long history. Ron Paul once said, “One thing is clear: The Founding Fathers never intended a nation where citizens would pay nearly half of everything they earn to the government.” But right now, an additional 11 companies have been approved by the state which aim to generate 87 jobs and invest $1 million in the Buffalo Nigeria region. These will become part of a network of tax-free zones connected to Buffalo University, in line with Start-Up NY.

With the Start-Up NY program – discussed on other posts on this site – state taxes or substantially lowered (or even eliminated) for firms that commit to generate jobs in areas attached to New York’s educational institutes.

In other tax news, a group has banded together to become a coalition in attempt to fight the “carried interest loophole.” This lets fund managers pay a much lower federal tax rate on a lot of their income. The plan is to bring in a bill to increase taxes on state residents that benefit from the lowered rate to negate the tax savings garnered at the federal level.

This coalition is also aiming to spawn revenue that might be used for public investments in areas like educational institutes and economic developments. Since New Yorkers are good about paying taxes, it’s good to focus on this. As Assemblyman Sean Ryan – one of the sponsors of the bill – pointed out, “People from Buffalo, when they work, they pay their taxes. We don’t have a lot of hedge funds in Buffalo, but we do have a need for state assistance.”

A coalition of progressive groups is starting a state-level campaign to close the so-called carried interest loophole, which allows fund managers to pay a substantially reduced federal tax rate on much of their income.

And now, news has arrived that New York City business owners are entitled to receive a six month extension on their 2015 tax return. The reason for this? Local finance officials have not been able to provide the requisite forms on time! So for once, there are benefits to inefficiency!

How will New York Fare in 2016?

Economy, ,

new yorkAs we begin our closure of 2015, we might want to ask, what does the housing market forecast look like for 2016? One argument is that the housing market will encounter substantial growth, with total sales for the year expected to hit 6 million – the highest in the last 10 years. According to Realtor.com overall growth will stagnate to 3 percent compared with 2015. The main reason for this is said to be elevating mortgage rates and diminished affordability. This could be somewhat offset however, with a 12% escalation in new home stars.

Other good news for those living in New York is the way the state fared on the transit scores. There was an increase of 2.9% from 81.2% in 2014 to 84.1%. As Walk Score noted, having a Transit Score in the 70 to 89 range means transit is excellent.

In terms of the job situation in New York, while December 2015 is encountering a hike, this may not translate into employment growth for 2016. According to Janet Yellen, chair of the Fed, the economy has been improving in recent weeks. She said: “On balance, both economic and financial information received since our October meeting has been consistent with our expectations of continued improvement in the labor market.” Still movements by the Fed will be with caution in 2016 since “there is a lot of uncertainty about what comes next.”

The Business World: How NYC Features Nationwide

Economy, , , ,

businessWhat is it like living in New York, when it comes to running a business? How do people feel about setting up and managing companies in New York, as compared to other states around the nation. Forbes every year, conducts an analysis entitled Best States for Business. In 2015, New York ranked at Number 29. While this number doesn’t seem too bad (out of all 50 states) it’s not really that great considering it came in at No. 19 last year.

So why is New York not doing so great? What has happened this year that has made the city not the most preferred option for businesses?  Well it seems that people are still interested in starting their business in New York. According to the New York State Empire State Development, “Small businesses are the heart of the American economy, comprising 98 percent of all businesses in New York and employing more than half of New York’s private sector workforce.” In addition, according to data from the US Census Bureau, “revenue for New York-based businesses is over $1.1 million” on average per year. furthermore, according to an article written a few months ago in Nerd Wallet, “There have been significant job gains in New York over the past year in areas such as educational and health services, professional and business services, trade, transportation and utilities, as well as construction. The unemployment rate remains at its lowest level since August 2008, according to state officials.”

So this result from Forbes is somewhat surprising. Especially since the article in which it was recorded also stated “If New York were a country, the state’s $1.4 trillion dollar economy would be the 14th largest in the world after South Korea.” There are also many incentives for New York businesses, such as those which hail from: Business First Resource Center, StartUpNY, etc.

The problem is tax costs. According to Forbes, New York fared worst in tax prices, coming out at number 50 (the last) being 42% above the national average. Union workforce was also the worst ranking, at 24.6%.

So there are good and bad features about opening a business in New York. And of course, the ‘cool’ factor of owning a successful start up in New York should never be overlooked.