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PR- 139-09
March 23, 2009


Through New Partnership with Freelancers Union, City will Work to Establish New Unemployment Safety Net for Independent Workers, Identify Office Space, and Persuade Albany to Reduce or Eliminate the Unincorporated Business Tax

Mayor Also Announces Details of New International Business Plan Competition

Mayor Bloomberg’s Remarks as Prepared Follow:

“It’s wonderful to join you all today – and to help welcome Stuart Fraser to New York City. When I was in the U.K. last October, Stuart graciously nominated me for an incredible honor: the Freedom of the City of London. It’s similar to the ‘Key to the City,’ except that it also comes with some little-known privileges that stretch back to when the honor was first given in the 1200s. For instance, I now have the right to drive sheep and cattle over London Bridge and to carry a sword in public. And if the police happen to arrest me for being disorderly, I also have the right to be sent home in a carriage, rather than thrown in a cell. Stuart, I plan to put all of those rights to the test on my next trip over there.

“My visit to London last October was an opportunity to meet with financial executives in the immediate aftermath of the collapse of Lehman Brothers, as well as government leaders like Stuart. As the world’s leading financial capitals, London and New York are often in competition with each other. And it might be easy to think that when London stumbles, New York profits – or vice-versa. But the reality is that both of us rise and fall the same amount with the economic tides – so we have a lot to gain by working together.

“That’s especially true right now, because the global recession has hit both our cities very hard. In the past two years, firms on Wall Street have reported losses of more than $54 billion and may eventually lay off one-quarter of their workforce. And while the financial services sector directly employs only about 9% of our city’s private sector, it accounts for more than one-third of its payroll. And that money, of course, supports working-class jobs in every industry in every borough.

“So the financial crisis is having an impact in every neighborhood. Small businesses are struggling to keep their doors open.  Families are worried about keeping their homes and holding onto their jobs. In January alone, the number of employed New Yorkers fell by 36,000 – the biggest one-month drop since 1976.

“Obviously, we can’t solve the global recession on our own.

“Stuart will be talking about some of the steps that can be taken at the international level, and I’d like to focus on some of the steps we are taking here at the local level to cushion the blow and rebound as fast as possible.

“The fact is, every city creates its own future. If you believe you’re at the mercy of larger forces beyond your control – you’ve already lost. Those larger forces affect every city, but successful cities learn how to adapt.

“New York learned that the hard way in the 1970s. Some of the lessons from that era now seem obvious: You can’t borrow to meet operating expenses. You can’t ignore petty criminals who breed a sense of lawlessness. You can’t let housing abandonment destroy neighborhoods. You can’t let the public school system become something that the middle class is afraid of.

“You can’t drive the biggest taxpayers out of the city – thus increasing the burden on everyone else.

“And you can’t allow quality of life to suffer – and that means keeping the parks clean, the subways safe and reliable, and the hospitals in good shape.

“These lessons may be obvious enough – but getting elected officials to apply them successfully is not so easy in part because politics and special interests always get in the way.

“What I think has made the difference for our Administration is that we’ve approached every issue from a completely independent and nonpartisan perspective. Maybe we haven’t been right on every issue, but we’ve always followed the data and done what we’ve believed is right – no matter what the politics.

“And we’ve held ourselves accountable for results.

“That’s why we’ve been able to drive down crime by 30% since 2002 and cut it another 15 percent just this year. It’s why we’ve been able to raise high school graduation rates by more than 20%. And it’s why our affordable housing program – the largest in the nation – has a mortgage foreclosure rate of less than one-tenth of one percent.

“As tough as 2009 will be, the City has entered this recession at a higher point than we’ve ever been and better positioned than ever to ride out the storm.

“One reason why is that we began preparing back in 2007, at the first signs of the slowdown. While Washington was still on a spending binge, we began cutting budgets and paying down some of our long-term debt.

“We’ve cut $2.5 billion from City spending over the past 12 months alone – even as we’ve challenged every City agency to do more with less. Doing more with less is something you learn in the private sector, and I can tell you it’s just as true in the public sector. Even with smaller budgets, our service delivery keeps improving, which allows our quality of life to keep improving… and that may be the single best thing we can do to strengthen our economy.

“But it’s not enough.

“We also have a responsibility to do whatever we can to support businesses – especially the small businesses that employ half of our city’s private sector workforce. Many small businesses are family-owned and operated, and they’re what make our economy so dynamic and our neighborhoods so diverse and strong.

“To make it easier for them to start, open, and expand, we’re creating an online, one-stop shop for all permits and licenses – so we get the bureaucracy out of their way. We’re also helping businesses to access financing and incentives, create business plans, find pro bono legal services and re-train their workers. Over the past year, we’ve awarded $3 million in grants directly to businesses so that they can retrain their employees to meet the changing demands of the economy.

“Last week, I visited one of those businesses.  It’s a company called Rucci Oil that’s been providing heating fuel and equipment to homes and businesses on Staten Island – since 1927. The Ruccis’ business had suffered, and they were set to layoff some of their workers. But using a grant from the City, they were able to re-train 10 of their employees to work on air conditioners and natural gas heating equipment. So now, 10 of its employees who might otherwise have been laid off, or employed only seasonally, are still working.  And with their new skills, their wages could rise by 20 percent. It’s a perfect example of how these training funds are a win-win for business owners and their employees.

“Since the markets crashed last fall, we’ve been expanding our job training efforts by keeping our Workforce1 Career Centers open on nights and weekends. Back in 2004, those centers were placing 500 New Yorkers in jobs per year. Last year, even with the downturn, the Centers placed more than 17,000 New Yorkers in jobs, and we’re aiming for 20,000 placements in 2009.

“We also want to increase entrepreneurialism in the City. After all, losing a job can be a golden opportunity to start your own business. (Thank you very much, Salomon Brothers.)

“Earlier this morning, we launched our latest entrepreneurial initiative, called the FastTrac New Venture Program. It’s a partnership with the Kauffman Foundation to provide training to aspiring entrepreneurs and recently laid-off workers who are interested in starting their own businesses. Increasing the number of entrepreneurs will not only create new jobs; it will help create the companies that – when the good times return – will be ready to capitalize on new opportunities.

“We also want to give people more incentive to work – and for many who are laid off, that can mean self-employment or freelance work. These independent workers make up more than 15 percent of our workforce – often supporting our signature industries, such as design, publishing, and fashion. As many larger companies shed jobs and industries go through a fundamental restructuring, even more people are turning to freelance work – and there’s nothing like being your own boss.

“But freelancers, who are often middle-class entrepreneurs, have never had much political clout, and so they face some serious disadvantages when it comes to taxes and benefits.

“I think it’s time to start leveling the playing field for freelancers, and today, I’m pleased to announce that we’ll be forming a new partnership with the Freelancers Union to begin addressing these long-standing problems.

“Problem number one is that New York State has an Unincorporated Business Tax that double-taxes independent contractors and sole proprietors. We’re pushing to reduce or eliminate that tax for 17,000 businesses. That would let them keep more of their hard-earned money – and it would encourage more people to do freelance work… which is exactly the kind of economic activity that can end up creating jobs and stimulating growth.

“Freelancers also lack any safety net to fall back on during hard times. If a company lays you off, you can collect unemployment. But if you’re a freelancer and you lose all your clients, good luck. That’s not healthy for workers and their families – and it’s not healthy for our economy.

“And so today, I’m pleased to announce that we will be working with the Freelancers Union to develop a proposal that would create a federal unemployment benefit for independent workers. One way this could work is to create a fund that workers would contribute to and that would also offer freelancers some level of tax benefits.

“Our new partnership with the Freelancers Union will also work to create more affordable office space. In January, we launched an initiative to create new incubator space for aspiring entrepreneurs – because overhead is often one of the major obstacles to growth. In the months ahead, we’ll work with the union to find space specifically for freelancers – and we’ll help them market the benefit to their members.

“I know the union’s president, Sara Horowitz, is here with us today, and Sara, we look forward to working closely with you and other leaders to make New York City as freelance-friendly as possible.

“Encouraging entrepreneurialism also means keeping our doors open to immigrants, something I believe in passionately.

“I often talk about the benefits of immigration to our city and our country – and here’s an astounding statistic that helps prove the point: About 40 percent of all patents in this country are awarded to immigrants. Think about that. And about one-quarter of Silicon Valley companies were founded by Chinese or Indian immigrants.

“Innovation and immigration go hand-in-hand. With that in mind, we are launching a new, international business plan competition to attract more of these pioneers to our City. We’re in the process of reaching out to business students at nearly a dozen of the world’s top MBA programs and engineering schools – from Poland to the Philippines. The winners will receive $20,000 and a free trip to New York City, where we’ll connect them to free office space, top venture capitalists, professors, and entrepreneurs who can help put their ideas in motion.

“We don’t know whether the competition will result in any major new ventures, but ultimately, we hope it will send this message: New York City is the place to be if you want to build an innovative company and attract the best and brightest.

“Unfortunately, as we’re moving to open our doors even wider to the world, Congress is moving in the opposite direction. The recently passed stimulus bill contains a provision that makes it harder for banks and other businesses getting federal bailouts to use the H-1B visa program to hire foreign skilled workers. If ever we wanted to shoot ourselves in the foot, that’s as good a way to do it as any. Economists estimate that every H1-B visa creates jobs for five Americans.

“We cannot climb out of this recession by shutting our doors to immigrants. We’ll only make things worse. The reality is we need more immigrants – not fewer.

“Committing national suicide isn’t an intelligent way to provide for our future.

“We need more laborers who will work their way up the ladder. And we need more scientists, engineers, doctors, and teachers whose ideas and innovations will build the economy of the future – and keep America the world’s economic superpower.

“The only way for this to happen is for Congress to adopt comprehensive immigration reform – and the longer we wait, the more damage we do to our economy.

“Immigration and international trade have always been the driving force behind New York City’s economic success and that remains true today. In a global economy, no city – not New York, not London, not anywhere else – can afford to hide behind barriers.

“And it’s also true that no city can afford to be too dependent on any one industry – not banking, not automobiles, not even computer technology – because every industry goes through boom and bust. That will never change.

“The most stable and successful cities will be those that – like smart investors – diversify their portfolios. That’s why promoting small businesses and entrepreneurialism is so important. But we’re also working to attract and support mid-to-large companies in growing industries.

“Over the past seven years, we’ve made enormous progress doing that by investing in industries like tourism, film and television, media, fashion, health care, bioscience, green development, information technology, education and others. All of these industries have long-term growth potential, and because of the hard work we’ve done – they’ve been growing here, instead of somewhere else.

“In some cases, that work has meant passing tax incentives, as we’ve done for the film and television industry. In other cases, it’s meant investing in capacity, as we’ve been doing for the bioscience industry.

“But in all cases, our success in attracting new investment is dependent on our ability to offer modern infrastructure.

“That’s why, for example, we are building – right now – an extension of the Number 7 Train to Hudson Yards, the first new subway track funded by the City in more than 40 years. Stuart Fraser can tell you why this is so important – because without the Jubilee Tube Line in London, Canary Wharf might still be in bankruptcy – and the jobs that are there now would be scattered around the world. The 7 Train extension is part of a $43 billion capital plan that will create tens of thousands of construction-related jobs that pay good wages, strengthen the middle class and help maintain our City as the nation’s economic engine.

“In ten days, the G-20 summit will take place in London. The backdrop will be the most serious global recession that we’ve experienced in decades. There’s no doubt that international cooperation is essential to long-term growth and stability, and that includes a more common regulatory framework.

“But in the short-term, it will be up to each country – and each major city – to take action on its own.

“That’s what the Obama Administration has been doing in Washington. That’s what we’ve been doing here in New York City. And I know that’s what Gordon Brown and Boris Johnson and Stuart Fraser have been doing across the pond.

“By nurturing small businesses that are more diverse than ever, by attracting capital and talent that is more mobile than ever, and by offering a quality of life that is better than ever, the global economy gives cities more opportunity than ever to create their own future.

“That’s what we’re working hard to do every day.

“And I think if we keep innovating, keep investing in the future, and keep taking an independent, nonpartisan approach, we’re going to come out of this stronger than ever.

“Thank you, and I look forward to taking some questions.”


Stu Loeser   (212) 788-2958

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