Gotham Gazette

The Place for New York Policy and politics

Open Government

City Council Stated Meeting - December 7, 2004


Every two weeks the New York City Council meets for its Stated Meeting to introduce and pass legislation. As a regular feature, Searchlight covers these meetings and posts a summary of the bills passed.

Quote of the Day:
"You are not a real Staten Islander unless you’ve experienced the mad dash [for the ferry] and had those doors close on you as it pulls away. It’s sounds something like this `Aaaghhhhh, Wait for me!’” – Staten Island Councilmember James Oddo.

Meeting Summary:
On December 7, the New York City Council overrode Mayor Michael Bloomberg’s veto of a bill (Intro 207-A) that would require one nurse or health worker for every private and public school with more than 200 students.

The mayor argues that school health programs are adequate, and he recently allocated an additional $8 million to fund additional school nurses. The council says that the mayor’s action does not go far enough, and that nurses will be threatened in future budget negotiations.

In 2002, the Bloomberg administration cut funding for nurses in private schools. Last year, the mayor proposed eliminating nurses from summer schools as a way to help close a budget deficit. Currently, some nurses now travel between various small schools.

"This is a matter of principal: Should every child have a nurse or not?” said Council Speaker Gifford Miller.

The council’s proposal would cost $3 million more than what Bloomberg has proposed and would add about 80 nurses to serve private and parochial schools. State law requires that the city supply nurses to private schools, but does not mandate the ratio of nurses to students.

The council also passed a bill (Intro 94-A) that sets a minimum schedule of service for the Staten Island Ferry. The measure requires that the ferry run at least every 30 minutes on weekdays.

A recent council report (available in pdf format) argues that the area’s population has grown by 30 percent in last quarter century, but ferry service has not kept pace. Staten Island officials are worried that service could be cut as the city looks to cut a close a $3 billion budget deficit next year.

The council also approved new business improvement districts in Queens Plaza and on Fordham Road in the Bronx and renamed 83 streets, many for firefighters and police officers who died in the terrorist attacks of September 11, 2001.

All of the bills passed by a vote of 46 to 0.

The next Stated Meeting is scheduled for December 15, 2004.

For an archive of past meetings and council votes, visit Gotham Gazette's Searchlight.

 

New Principles, Common Goals


The national election results this year are a reflection of what happened in New York about a dozen years ago, when New Yorkers chose a Republican governor and a Republican mayor. Since then, we have reelected the governor twice, and elected a second Republican mayor.

Why has this happened? I believe it is because the people of New York fundamentally support the core Republican principles of keeping crime down, keeping welfare in check, and of course creating a good fiscal climate to attract and keep businesses here. We have had enough of a failed way of thinking, and have embraced new leadership.

I think this change has worked to the benefit of New York, and now we are witnessing a similar reaction across the country. As long as those true governing principles stay in place I think you'll see those same benefits nationally.

But what the people of New York really want are officials working for the public good, in a collective and bipartisan manner when possible. What happened three years ago on September 11 proved the point that while we may belong to different parties and have subtly different beliefs from time to time, at the end of the day we are really all Americans and all New Yorkers.

Much of what my Democratic colleagues want for New York, I'm sure I would agree with.

MAINTAINING A HEALTHY BUSINESS CLIMATE

We should be focused on maintaining New York as a viable place to do business -- not just to keep businesses here, but also to attract businesses from around the country and from around the world. And to a large extent we have succeeded, and much of that is a credit to those in the private sector. I say that as someone who came out of the private sector, who was born and raised in Staten Island, who has worked both downtown and in Midtown, and knows what it is like to commute, knows what it is like to miss an express bus, knows what it is like to work late if I have to. That is the heart and soul of New York City: the vibrant private sector based on the premise that if you can do it here you can do it anywhere.

My priorities as a Member of Congress - and I guess these were somewhat validated at the national level - is the notion that we are the engine of the world, and that when we provide the right incentives and the right beliefs, like the belief in opportunity - New York is, after all, the place where you can secure your dream wherever you come from - if you give those incentives, anything is possible. That means keeping taxes lower to provide the incentives for growth.

I think one of the orders of business we have is to make the federal tax reductions permanent to remove the uncertainty, whether it comes to savings, investment, or the reallocation of capital. We should move towards tax simplification that truly encourages growth and transparency and becomes the envy of the world.

HOMELAND SECURITY

Above all, without the notion of national and personal security, everything else is subordinate. We can have all the economic security we want, but without a strong, prosperous and free nation, we're nothing. The chaos that surrounded September 11 proved that everything else is irrelevant.

Homeland security will be an ongoing debate, with Secretary Tom Ridge stepping down and a new leader coming to replace him. That's still a work in progress. But one issue we must work together on is making sure that New York City gets the federal homeland security funding it needs and deserves. New York City is still Exhibit A when it comes to being a terrorist target -- not the middle of Montana -- with all due respect to the people there. We need to work to ensure that the funding flows through to the state and the city and our first responders who are working 24 hours a day to protect us have the tools and resources they need.

As far as homeland security, we are committed in a bipartisan way to ensure that the funding is distributed based on threat -- not on a per capita basis. We are seeing progress in that direction. Initially, it was almost a grab bag of money, with some of it allocated based on threat and the majority distributed to every state regardless of risk. We would like to see it all threat-based.

The President and secretary Ridge have embraced that formula, and we have a bill moving through Congress now to achieve our goal. We're working with the mayor, the governor, and of course the entire Congressional delegation.

TRANSPORTATION

Another thing we can agree on as Democrats and Republicans is the importance of not changing the funding formula as it relates to transit needs. Fifty years ago, Dwight D. Eisenhower had this vision to construct the federal highway system. I think we need a new vision as to how this funding formula should work, because for the most part that highway system has been built up. There are hundreds of billions of dollars that flow into this fund, and we have to start thinking about what the most effective way of using that fund is, as opposed to it serving as a grab bag for projects across the country.

There is an effort to shift funding away from mass transit - which we greatly rely upon here in New York - towards highway construction, which doesn't benefit New York. We have to ensure that the percentage dedicated to mass transit remains high. There's a good coalition of Democrats and Republicans who are working to do just that.

At the end of the day, there are no guarantees, but this is one issue where there is no Republican or Democratic label. We need to be working together, as well as working with the two senators from New York to ensure New York City gets its fair share.

That bill will be coming up in the next several months and it is our responsibility to fight and make sure New York gets the resources it needs.

Congressman Vito Fossella, who represents Staten Island and parts of Brooklyn, is the only Republican in the 13-member congressional delegation for New York City. This article was adapted from comments he made at a breakfast forum sponsored by Crain's New York Business on December 2, 2004.

 

Who Is Term Limited Out of Office in 2005?


In the fall of 2005, six current members of the New York City Council and Manhattan Borough President C. Virginia Fields will not be able to run for reelection because of the city's term limits law.

Term limits, which restrict city officials to two consecutive four-year terms in office, were approved by voters in two referenda. It first went into effect in 2002.

All city officials - including the mayor, public advocate, city comptroller, the borough presidents, and all 51 City Council members - are up for reelection in 2005. Primary Day is September 13, 2005; the General Election is November 8, 2005.

The chart below shows when City Council members were elected and when they will be kicked out of office. (For more on how to read the chart, see the bottom of the page.)

Borough Dist. Member Party Elected Can't Run
Manhattan 1 Alan J. Gerson DEM 2001 2009
Manhattan 2 Margarita Lopez DEM 1997 2005
Manhattan 3 Christine Quinn DEM 1999 2009
Manhattan 4 Eva S. Moskowitz DEM 1999 2009
Manhattan 5 Gifford Miller DEM 1996 2005
Manhattan 6 Gale A. Brewer DEM 2001 2009
Manhattan 7 Robert Jackson DEM 2001 2009
Manhattan 8 Philip Reed DEM 1997 2005
Manhattan 9 Bill Perkins DEM 1997 2005
Manhattan 10 Miguel Martinez DEM 2001 2009
Bronx 11 G. Oliver Koppell DEM 2001 2009
Bronx 12 Larry B. Seabrook DEM 2001 2009
Bronx 13 Madeline Provenzano DEM 1997 2005
Bronx 14 Maria Baez DEM 2001 2009
Bronx 15 Joel Rivera DEM 2001 2009
Bronx 16 Helen D. Foster DEM 2001 2009
Bronx 17 Maria del Carmen Arroyo DEM 2005 2013
Bronx 18 Anabel Palma DEM 2003 2013
Queens 19 Tony Avella DEM 2001 2009
Queens 20 John C. Liu DEM 2001 2009
Queens 21 Hiram Monserrate DEM 2001 2009
Queens 22 Peter F. Vallone Jr. DEM 2001 2009
Queens 23 David I. Weprin DEM 2001 2009
Queens 24 James F. Gennaro DEM 2001 2009
Queens 25 Helen Sears DEM 2001 2009
Queens 26 Eric N. Gioia DEM 2001 2009
Queens 27 Leroy G. Comrie DEM 2001 2009
Queens 28 Allan W. Jennings DEM 2001 2009
Queens 29 Melinda R. Katz DEM 2001 2009
Queens 30 Dennis P. Gallagher REP 2001 2009
Queens 31 James Sanders DEM 2001 2009
Queens 32 Joseph P. Addabbo, Jr. DEM 2001 2009
Brooklyn 33 David Yassky DEM 2001 2009
Brooklyn 34 Diana Reyna DEM 2001 2009
Brooklyn 35 Letitia James WF 2003 2013
Brooklyn 36 Albert Vann DEM 2001 2009
Brooklyn 37 Erik Martin Dilan DEM 2001 2009
Brooklyn 38 Sarah Gonzalez DEM 2002 2013
Brooklyn 39 Bill DeBlasio DEM 2001 2009
Brooklyn 40 Yvette D. Clarke DEM 2001 2009
Brooklyn 41 Tracy Boyland DEM 1997 2005
Brooklyn 42 Charles Barron DEM 2001 2009
Brooklyn 43 Vincent Gentile DEM 2003 2013
Brooklyn 44 Simcha Felder DEM 2001 2009
Brooklyn 45 Kendall B. Stewart DEM 2001 2009
Brooklyn 46 Lewis A. Fidler DEM 2001 2009
Brooklyn 47 Domenic M. Recchia DEM 2001 2009
Brooklyn 48 Michael Nelson DEM 1999 2009
Staten Island 49 Michael E. McMahon DEM 2001 2009
Staten Island 50 James S. Oddo REP 1999 2009
Staten Island 51 Andrew J. Lanza REP 2001 2009

Key for reading the chart

Names in bold are term-limited in 2005.

Term limits only apply to consecutive terms. The "Can't Run" heading assumes the elected official remains in office and continues to be reelected.

While term limits usually restricts lawmakers to eight years in office, some can serve longer. Those who took office in a special election in the middle of a term can serve more than eight years, because the time before the next regularly scheduled election does not count toward their two consecutive four-year terms. Also every ten years, the four-year terms are shortened to two, two- year terms when council lines are redrawn with new census data.






 

 

 

Outsourcing and New York City


Louis Ludwig, a Russian Jewish immigrant, started Eagle Electric in 1920. For the next eighty years, the family-owned company made sockets, fuses, and plugs, first on the Lower East Side and then in Long Island City. By 1999, it employed 2,500 employees nationwide, 1,500 of them in three factories in Queens.

But in 1999, Houston-based Cooper Industries bought Eagle, and soon decided it would be cheaper to produce its switches and circuit breakers in Mexico and China. Two of its New York factories have already closed; all of its manufacturing jobs will leave the city by next fall.

"These large structures that once provided good paying jobs to hundreds of dedicated hardworking men and women now stand silent," John Viol, a Cooper employee and a representative of the local United Auto Workers, testified at a recent City Council hearing. "These empty structures are the result of corporate greed, and a true testimony of the effects of outsourcing."

Outsourcing - the process by which companies send jobs overseas - is a polarizing topic, and a frequent campaign issue, including in the recently-completed campaign for president. Like the word globalization in the 1990s, it is regularly attached to stories like Electric Eagle's, with harmful local effects that are difficult to deny. In recent years, the jobs going overseas are not just from factories, but also higher-skilled, better-paid office positions, causing increasing anxiety among a wide range of Americans about their job security.

But not everyone thinks that outsourcing is a bad thing. The benefits, many say, outweigh the drawbacks, even if they are not as immediately apparent.

"There are job losses in a gross sense, which is to say some people lose their jobs," said Clive Crook, deputy editor of the Economist, at a recent debate. "But new jobs come to replace them. In 10 or 15 years of intense globalization, there has been no net loss in jobs."

Public officials on the federal, state and local levels of government have taken notice. They are, however, far from a consensus on the nature of the problem, let alone a solution.

"The first step is to begin an honest debate about where our economy really is and where we are headed as a nation," wrote Senator Charles Schumer in a New York Times article he co-authored with economist Paul Craig Roberts. "Old-fashioned protectionist measures are not the answer, but the new era will demand new thinking and new solutions."

GLOBALIZATION

Americans have long cast a wary eye on Japan, China, Mexico and Malaysia - seeing unfair competition; hearing, as former presidential candidate Ross Perot did, a "giant sucking sound," and looking to the US government for job security.

Many businesses, meanwhile, have seen an opportunity overseas in the process that in the 1990s became known as globalization.

For businesses, globalization meant the breaking down of national borders so that a company - or certain parts of a company - could be located in whichever country was the most profitable.

In many cases, it is cheaper to manufacture in developing nations. Improved technology made it easier for companies to set up in more remote locations. Free trade agreements - whereby groups of countries removed political barriers such as protective tariffs - further encouraged this process.

The result was a flow of manufacturing jobs from the United States and Europe towards Latin America and Asia. Between 1994, when the North American Free Trade Agreement (or NAFTA) between Mexico, the United States, and Canada was enacted, and 2003, the total number of manufacturing jobs in the United States dropped by 2.5 million, according to the Bureau of Labor Statistics.

Some praised what they described as progress. Others said that companies that were moving offshore were exploiting the lack of labor and environmental standards in developing countries, harming all countries involved.

As the jobs leaving the United States shifted from blue-collar to white-collar, the debate over globalization has shifted into a debate over outsourcing.

OUTSOURCING: GLOBALIZATION BY ANOTHER NAME?

The word outsourcing was initially a synonym for subcontracting - when one company hires another to carry out one of its business functions. Today, its most common usage is to refer to the process by which companies move jobs overseas, whether they hire a foreign company to do some of their work or establish their own presence in another country.

Several factors have made it easier to move white-collar jobs overseas in recent years. Constant improvements in technology have made it possible for a worker in India to keep in contact with a company in Manhattan, while countries like India have been increasingly successful in creating a workforce that can reliably do jobs requiring high levels of education and training.

The first test for Indian outsourcing was the Y2K scare, when Indian workers were deployed en mass to help assuage the millennial fears of American businesses. Since then, the number of jobs and the types of jobs that can be outsourced has increased.

Companies outsource jobs for several reasons, but the main logic to open an office in Bangalore, India is the same as building a factory along the Mexican border: Indians and Mexicans will work for less than Americans.

Both proponents and critics of outsourcing agree that American jobs are going overseas in increasing numbers. But while those who oppose the trend describe the numbers as a serious chunk of the American economy, others believe it is much more limited.

The trend is a difficult one to measure, and projections from one side of the debate are regularly disputed by the other. Interestingly, however, the opposing sides also occasionally use the exact same numbers to prove their point.

The numbers most often cited were generated by Forrester research, which this year predicted that both the raw number of jobs and the types of functions that can be outsourced (in pdf format) are on the rise. Forrester estimates that in 2005, there will be 240,000 services jobs - in sectors like information technology - that will go overseas. By 2015, 3.3 million jobs will have moved overseas.

IS OUTSOURCING GOOD OR BAD?

When discussing whether outsourcing is good or bad, the debate hinges not only on the specific numbers, but on disputes over economic theory. The two sides have different ideas about what creates attractive jobs.

It's Good!

Those who believe that outsourcing is good for both the American and the world economies invoke the principle of free trade. By allowing businesses to look for the best ways to produce their products and allowing customers to buy from the businesses that are producing the best goods, free trade makes the world economy more efficient. This efficient economy will produce more jobs. In this system, each country is able to produce certain goods and services better than other goods and services. The United States, for example, is very efficient at producing high-level scientific research, but less efficient at producing agricultural products. Therefore, it should focus its efforts on scientific research. Developing nations are more efficient at producing agricultural products than scientific research, on the other hand: they should produce these and sell them to the United States.

According to this line of thinking, more American jobs will be created by focusing on whatever industries the country is most efficient in while relying on other countries to produce what they do best.

Those who subscribe to this view of outsourcing claim to have most economists on their side, and describe their opponents' claims as either superficial or flat-out wrong economically.

"Because the economy - and especially job growth - is sluggish at the moment, commentators are attempting to draw a connection between offshore outsourcing and high unemployment," wrote Daniel Drezner, an economist who often writes about outsourcing in his blog, in Foreign affairs magazine. "But believing that offshore outsourcing causes unemployment is the economic equivalent of believing the sun revolves around the earth: intuitively compelling but clearly wrong."

It's Bad!

But if proponents of outsourcing say that the other side of the debate ignores basic economics, they are accused of ignoring the recent history of globalization.

When manufacturing jobs began to leave the United States in significant numbers, the free traders argued that these would be replaced by jobs in the "New Economy" - a U.S. economy that would be driven by technology. But now, well-paying white-collar jobs are flowing overseas. To some, this indicates that the logic behind globalization needs to be rethought.

"The very jobs we were told were the jobs of the future are now disappearing ..." said Lori Wallach of Public Citizen, at a recent debate. "What's going now are the high end jobs, the ones that pay $80,000 a year."

Greater numbers of jobs are now becoming vulnerable to outsourcing - Wallach cites a University of Berkeley study which found that 14 million jobs with an average salary of $40,000 a year are at risk (in pdf format).

But even for those jobs that stay in the United States, the threat of overseas competition pushes wages down.

This pressure causes several problems, the most important of which is increasing inequality. Besides the social problems that accompany a widening gap between rich and poor, inequality can cause the weakening of demand for products in American markets, as many people cannot afford to buy as much.

It Depends...

According to David Kallick of the Fiscal Policy Institute, a New York City-based economic policy organization, outsourcing presents both challenges and opportunities. Whether it ends up being a good or a bad thing depends on why it is happening - and how the United States responds.

"If [jobs] really [are] going somewhere else because people are better trained, then that pushes us in a good direction to make ourselves be sure that we have better trained people," he said. "But if it's going there just because of lower wages, then it pushes down wages, which I think is not a good direction."

HOW OUTSOURCING AFFECTS NEW YORK CITY

While there has been much attention focused on how outsourcing affects the United States as a whole, there has been practically no research done on the specific impact on New York City.

"There's nothing analogous [to the national numbers used to generate outsourcing data] on the local level," said Partnership for New York City economist Jonathan Schwabish, who took a cursory look at outsourcing in the city but stopped there for lack of information.

"It's really hard to do," he admitted, "so we got really frustrated."

Outsourcing is not the only issue that New York faces in its efforts to hold onto jobs, and different industries seem to see outsourcing in varying lights.

Manufacturing

While the draw of Mexico and China may have been pulling Cooper Industries from Long Island City, there was a push as well.

"Look at that space now, it's right across the street from a big bank building," said John Breed, a company spokesman, of Cooper's remaining New York factory; the five-story building is located in an area that is shifting from a district just for large factories towards one with a mix of residential, commercial, and lighter industrial uses. "If Eagle hadn't been around, and that was just a vacant lot, would you build a manufacturing plant there today?"

The limited amount of space in New York makes land too expensive for large-scale manufacturing uses - most of the bigger factories have moved out of the city. This has meant a serious decline in the number of manufacturing jobs for New Yorkers; it also means that those manufacturers that do remain are those least vulnerable to New York's challenges, and best suited to tap into its advantages.

Those manufacturers that are thriving in the city benefit from proximity to others in their industry - important in fields like high-end clothing and customized furniture. For many, the main concern is finding sufficient space in New York. [see Giving the Garment Industry a Place of Their Own, a related article by Gary Pang].

"The jobs that are left here are not jobs at risk of going to overseas sweatshops because they provide niche market services," Maura Keaney of garment industry union UNITE HERE told Ciy Council. "Indeed, designers and manufacturers very much want production in New York."

Information Technology/Financial Services

In the information technology and financial services fields where the newer wave of outsourcing is taking place, there is much more uncertainty - and disagreement - about what outsourcing means for businesses based in New York.

Ernie Nounou, a founding partner of software company Catalytic says he lost between $1 million and $1.5 million in contracts with existing clients who outsourced between late 2002 and mid 2003. He was forced both to lay off employees and reduce his own compensation.

"There's no guarantee about the future," he said, "whereas several years ago, based on the world as it was then, the sky was the limit."

However, while some companies in the field have been hurt by competition from abroad, others in the field are the ones who are benefiting from the lower prices of outsourced services. Currently, it is mainly the larger financial firms that can take advantage of outsourcing, but that may soon change.

"The larger companies get the economies of scale by going offshore, that's pretty substantial," said Howard Rubin, a City University of New York professor who recently surveyed New York City companies (in pdf format) about outsourcing in a study commissioned by New Jobs for New York. "There will be offshore opportunities coming up that will allow small companies to tap in and pool their resources and all sorts of good stuff, so the future is there."

Rubin's study found that of the largest 100 companies with publicly traded stock based in New York City, over half already outsource overseas, and 90 percent plan to do so soon. But he also found that outsourcing does not provide miraculous savings once additional costs like travel, technology, and additional management are added in.

Rubin found that the cost savings from offshore outsourcing were roughly comparable to those that could be realized by moving certain operations to Syracuse or Rochester. With additional attention paid to creating incentives through public policy, it may become more efficient to keep these jobs closer to home.

HOW SHOULD PUBLIC OFFICIALS ADDRESS OUTSOURCING?

When campaigning, public officials have found ways to confront outsourcing rhetorically. In the presidential campaign, for example, Democratic candidate John Kerry lashed out at Benedict Arnold CEOs, and criticized President George Bush for outsourcing the job of catching Osama bin Laden to Afghan warlords, thus forcing the United States to accept an inherently inferior product. Bush responded by saying he opposed isolationist and protectionist policies.

But when placed in their roles as policymakers, public officials act with much less clarity. No major policy has been passed at the federal level to limit or regulate outsourcing -- indeed, the trade agreements that the United States has signed may prohibit such limitations. Many states, though, have at least proposed bills to address the issue.

At the city level, policymakers have little power over the overall issue of outsourcing, which is essentially a matter of international trade. What New York City can do is create incentive programs for particular industries.

Federal and State Levels

Various bills have been proposed at the federal and state level to limit outsourcing. These have followed several paths:

 

  • Requiring companies to disclose their outsourcing activities
  • Increasing privacy standards so that foreign workers cannot handle sensitive financial or medical records
  • Prohibiting government contracts from going to companies that outsource.

 

In Albany, there was a flurry of activity earlier this year, in which bills of all three types were proposed. None have yet passed; the one that has moved farthest would simply require the Department of Labor to conduct a study examining the effect of outsourcing on the state's job market.

Business groups warn against passing restrictions on outsourcing by limiting government contracts or increasing privacy violations; if one state will not allow these cost saving measures, they say, it is easy for businesses to move to one that does.

As an alternative to keeping companies from outsourcing, federal and state governments could increase the safety net for those who do lose their jobs to overseas competition - by expanding programs like the Trade Adjustment Assistance program - and by improving training and education to help American workers compete with global competition.

City Government and Outsourcing

"If the issue is that we're losing jobs overseas, and they're in particular areas that New York City is big in ... there's only so much that New York City can do, as a fiscal entity or a municipality," said Schwabish of the Partnership for New York City.

What the city can do is give incentives to the industries that are important to its economy.

An unlikely example of an industry that has looked to the city for relief from outsourcing is the film industry. The words outsourcing and globalization are more likely to evoke images of factory jobs flowing south to Mexico than of film crews heading north to Canada. But workers in the movies claim that they can be affected as well.

"Other countries create low-rent version of New York City back-lots to stand in for the real thing," John Amman of the International Alliance of Theatrical Stage Employees told City Council. "Our industry has referred to this practice as 'runaway production,' however it could easily be classified as 'outsourcing' since it is identical to the transfer of jobs overseas in other US industries."

In order to retain film industry jobs, the city and the state created tax credits for productions that are filmed largely in the city. The mayor created an Office of Film, Theater and Broadcasting, and the efforts have been seen in a positive light.

Of course, such strategies have not been created particularly to confront outsourcing: the tools that New York City has at its disposal to keep jobs from going to India are the same ones it has long used to try to keep jobs from going to New Jersey.

Related Links:

Outsourcing Websites:
• Forrester: Outsourcing Facts • South Asian Journalists Association Roundup: Outsourcing • OutsourceOutrage.com • Public Citizen Global Trade Watch

Outsourcing Blogs:
• Network World Fusion: Outsourcing • Outsourcing Conversations • Daniel W. Drezner Blog • CNET News.com: Outsourcing

Articles and Reports on Outsourcing:
• Second Thoughts on Outsourcing by Charles Schumer and Paul Craig Roberts (New York Times) • Near-Term Growth of Offshoring Accelerating by John C. McCarthy (Forrester Research) (pdf file)
• Giving Thanks for Offshoring by Christopher Farrell (Business Week)
• The Outsourcing Bogeyman by Daniel Drezner (Foreign Affairs)
• The New Wave of Outsourcing by Ashok Deo Bardhan and Cynthia A. Kroll (University of California, Berkeley) (pdf file)
• Outsourcing: An Analysis of the Current State of Offshore Outsourcing in New York City based companies by Howard Rubin (New Jobs for New York) (pdf file)
• Addressing the Regulatory Vacuum: Policy Considerations Regarding Public and Private Sector Service Job Offshoring (Public Citizens Global Trade Watch) (pdf file)

 

A Seismic Change in Audiences Since 9/11


City Opera was founded in 1943 by Mayor Fiorello La Guardia. The City Center on West 55th Street provided a cultural opportunity to a flow of immigrants fleeing Europe. Ticket prices were an issue for them, so accessibility was part of the mission, to the extent of La Guardia calling us the people's opera. That part of the mission survives in our current pricing, low price, $12, high price, $100.

But the mission has also evolved. This year, American artists drive 90 percent of our roster. New works, especially American, are an important part of our repertoire, from unfamiliar pieces from all periods and familiar works seen in a new way. We see our job as keeping opera fresh and growing with our times, a living art, not a museum object.

City Opera is now the country's second largest opera company in activity. This season we are presenting 15 operas in 117 performances. But we are the fifth largest in budget size, so we have to do things efficiently. Our budget by the way is not $35 million. Now what does this require?

To begin with, opera is the most complex performing art, merging music, drama, dance, and design in one enormous, sublime, and expensive experience. We have 144 principal singers on this year's roster, 118 chorus members, and 69 members of the orchestra. There are 73 full-time administrative employees in marketing, fundraising, administration and production. Some 593 part-time employees work for us, and many more work as ushers, porters and stagehands. In all, we need over 15 unions.

Last year, 237,000 people attended, with 82 percent from New York City and the surrounding suburbs. Forty percent were subscribers. But here we begin to get into the problem. These figures are down by about 6 percent from the year 2000.

Since September 11, 2001, there seems to have been a seismic change in audience patterns. Subscriptions are down across the country, even the world. Single ticket buyers are not buying ahead and they are attending fewer performances a year. Sales are off for the tried and true repertory - La Boheme, Carmen and Madame Butterfly -- but often up for the untried and unknown, that for instance when Elizabeth Futral played Daphne by Richard Strauss, which had never been done in New York City, it sold more tickets this fall than any of our other performances.

The problem seems to be across the board in the performing arts with very few exceptions. It's partly the economy, it's partly a psychological change I suspect, anxiety brought about by the world situation, possibly a hedonistic response that builds restaurants but keeps people away from a two-and-a-half or three-hour challenging experience.

It's too complex to understand. But the important thing is that we are looking for causes and how to respond in marketing and programming. As examples of how people are facing this, the National Theater in London now has an extended season of 10-pound seats underwritten with corporate support. City Center, returning to the tradition of accessibility, recently ran a highly successful short season of $10 tickets for dance, underwritten by the Peter J. Sharpe Foundation. Covent Garden has done a modified version of the same thing. These houses are all filled.

Now what is the future for City Opera? Most significantly for us will be the realization of our full potential in the new house. We want a smaller hall, with acoustics more suited to our needs, more backstage and rehearsal space, enabling co productions and rental income as well as artistic benefits. City Opera has less than half the backstage space of most theater institutions across the country. And we want a more advantageous performance schedule to increase income potential. We now must open far too early in the season and cannot perform during the big holiday weeks.

As you know there have been many rumors. The New York Times recently reported prominently on one possibility - that's the American Red Cross site on Amsterdam Avenue. But the story was premature to say the very least. It's an idea without a deal, and we are in process of discussions with the American Red Cross site as we continue to be in discussions with other people as well.

But I do assure you of this: Our board and staff are profoundly committed to building a theater in our time at City Opera, and we have been astounded at the support we have been getting after a couple of rather well-publicized disappointments.

There is more promising news. Individual contributed support grew in every category last season. We saw the numbers of members, patrons, and major donors increase by more than 10 percent over previous years. And our board has grown remarkably stronger in recent years, attracting donors at a high level to see our future plans as not only attractive but possible.

The art form itself is in wonderful shape, and so is the artistic life of City Opera. There is no shortage of gifted composers whose work will move and enchant generations to come. There is no shortage of gifted singers who perform for us. In fact, there are more well-trained and exciting young singers converging on the stage than any time in my memory. And our orchestra and chorus have been radically improved in recent years by our music director George Manahan, so that now they are recognized as among the best in the country.

Last year, we had consistently best reviews we have ever had. Next May, City Opera will take 185 people on a tour to Japan as the official U.S. cultural representative for Expo 2005, with the significant sponsorship of the Toyota Corporation, Citigroup Private Banking, and Fuji TV.

Therefore morale at the company is at a very high level. Certainly there are challenges in this perplexing economic and psychological and political climate. We are helped by the fact that we are in a city whose leaders from La Guardia onward have recognized the enormous importance of the arts to its economic, emotional and intellectual well-being, and a city that always seems to recognize the importance of challenge and progress.

Our company's early history in World War II and in times since teaches us that in horrible meonts there is hunger for the enlightenment, distraction, solace, entertainment, joy, and revelation that only art can bring. These are human needs, and I am betting they always will be. Our job is to provide these things and for the future engage new audiences in these feelings with a company that's stable and thriving. I think we can do that.

Paul Kellogg has been general director and artistic director of New York City Opera since 1996

 

Related Stories:

Barry Grove: The Manhattan Theater Club Revamps a Legendary Theater
Paul Kellogg: Seeking a New Space for the New York City Opera
Glenn Lowry: The Museum of Modern Arts' New Home
Linda Shelton: Creating a Center for Dance in Lower Manhattan

 

Nothing Matters More than the Collection




The new Museum of Modern Art is nearly double the size of the old one, and cost $425 million to construct.

The Museum of Modern Art was founded in 1929 by three remarkable women including Abby Aldrich Rockefeller. They had what was then and still is a very simple and a very compelling idea, which is that modern art is the art of our time and is every bit as compelling and interesting as the art of the past. And that New York City because it is the city of the future - and certainly was seen as a city of the future in 1929 --should be the premiere place in the world to see, enjoy, and learn about modern art.

That idea has propelled the institution forward from rented space on Fifth Avenue -- 4,000 square feet in the Heckscher Building, now the Crown Building - to our new home that we opened to the public on November 20. The project, designed by Yoshio Taniguchi, was really the result of over a year of reflection and discussion within the institution. We called it "Imagining the Future," when we and the staff and trustees asked ourselves and our friends what it was that we needed to succeed in the 21st century as well as we had in the 20th century. It became very clear that what we needed first and foremost was an architectural platform that would allow the ideas of the institution to be expressed in a new and different way. We needed more space for contemporary art, a completely different layout of the galleries that was more complex, nuanced, and the conversion of the building as an entity from a kind of hermeneutic box that turns inward away from the city into a pulsing center of activity that opened out onto the city.

In 1939, when our first building was created specifically for the museum by architects Philip Goodwin and Edward Stone, we were the first urban museum that opened directly onto the street, that captured the beat, the energy, the pulse of this extraordinary city, and we wanted to regain that, something that had been lost over the intervening decades.

The new, cavernous sixth floor offers temporary exhibitions. Here, "F-111" by James Rosenquist.

So under the remarkable chairmanship of David Rockefeller in our capital campaign, we set out to literally remake the Museum of Modern Art. It involved first of all what we thought would be a capital campaign of $300 million, and I have to confess that the head of development and I looked at $300 million and said, "How could that possibly be? There’s no way."

But by the time we convened a group of remarkable people to work with us on this project, and Yoshio’s plans crystallized, and we realized what the scope of we were going to do would involve, we had a capital campaign of $858 million. The core group of "founders" -- individuals that we had attracted to this project to be part of the remaking of the Museum of Modern Art and that now numbers 55 -- each have given in excess of $5 million. We currently have $725 million raised or pledged.

The Abby Aldrich Rockefeller Sculpture Garden has been expanded and features 31 works from the collection.

What is the project? The project is a $425 million rebuilding of the museum here in Manhattan, $120 million to enable our endowment to sustain operations, and $100 million for future real estate acquisitions. We bought a great deal of land around the museum and in Queens in order to ensure that the next generation of the museum has the space in which to continue. We put $50 million into a kind of a rainy-day fund to help our operation when we were under construction, then we built MoMA QNS, a study and storage center in Long Island City, which we used for a little over two years for temporary exhibitions while we were under construction in Manhattan.

None of this -- absolutely none of this -- would have been possible without catalytic support of the city and then the state. Then-Mayor Rudy Giuliani gave us a $65 million grant that the current administration has ardently supported. Without that seed funding, we could never have launched a capital campaign on this scale. The city was joined by the state, which has now given us $10 million from the governor’s office. That vote of confidence is what allowed us to go out to the private sector and say, "Look, if the city and state have walked into this project at this scale, we really hope that you will match that and exceed it."

Our original hope had been that we could match the city money ten to one. We have far outdone that. By the time this project is through, it will be more like twelve and a half to one.

The fifth floor features selections from the museum's sculptures and paintings collection. On the outside wall, "Rhythm of a Russian Dance" by Theo Van Doesburg (1918); in the distant gallery, "Head of A Woman" by Pablo Picasso (1932)

What I think is critical to understanding why this project has at least made it to where it is is that the museum has always understood a very simple formula, which was that to be an outstanding museum meant having an outstanding collection. Nothing mattered more to the Museum of Modern Art than a singularly important collection.

In order to have a singularly important collection, two factors have to be at play simultaneously and always. The first is an extraordinary board of trustees utterly dedicated and committed to the museum’s mission. The second is an outstanding staff capable of doing the research and creating the support mechanisms and the educational programs to enable the development of an extraordinary collection and ultimately its display to the public.

While I think one can make very strong economic benefit arguments for why the museum’s expansion is beneficial to the city and the state -- and we made those arguments and were very gratified by the city and state’s recognition of the inherent value that cultural institutions play in the vibrancy of New York City and state -- ultimately, the reason we can make those economic arguments is precisely because of the singular importance of the institution as an artistic venue. By that relentless commitment that now extends over three or four generations striving to build an outstanding collection and developing innovative ways of displaying it, the institution has garnered both a considerable public -- approximately 1.8 million people before we began shutting down for the construction project -- and a considerable critical public. That creates a kind of magnetic effect that enables us to look to the future with some degree of confidence.

A model of the new Museum of Modern Art as part of an exhibition in the new Museum of Modern Art on nine museums designed by architect Yoshio Taniguchi.

In a post-9/11 environment I think it is impossible to predict precisely what kind of attendance the museum is likely to generate. Certainly I think it would be foolhardy to assume one can continue on the same path at least on the short term that propelled so many cultural institutions pre-2001 toward a sense of continual growth. We were seeing our audiences grow at five or ten percent every year for seven or eight years in a row. But I do think that this city supports the arts like no other city in America. I do think that the aggregation of cultural institutions in the city makes New York a unique place. And it is the synergy between our institutions that enables us collectively to be bold and adventuresome about the kinds of projects we undertake.

In our case as we open to the public and look to the end of our capital campaign, we are already thinking about the next moves. For us, the construction of this building was not an end but a beginning.

It is now the platform for us to work through the next set of ideas about the Museum of Modern Art as an institution that we would like to think of as isotopic with a series of half lives constantly evolving, constantly changing. What you will see in the new museum is a proposition, an idea about to how perceive and enjoy and appreciate modern art that will change continually. As it changes, so too will the building and so too will our needs. If we have done our job well, we will continue to be a very young institution despite our 75 years.

Glenn Lowry has been the director of the Museum of Modern Art since 1995.

 

Related Stories:

• Barry Grove: The Manhattan Theater Club Revamps a Legendary Theater
• Paul Kellogg: Seeking a New Space for the New York City Opera
• Glenn Lowry: The Museum of Modern Arts' New Home
• Linda Shelton: Creating a Center for Dance in Lower Manhattan

 

Dance Reflects Our Common Humanity



Joyce Soho, in an old firehouse at 155 Mercer Street, began in 1996, 14 years after the original Joyce Theater in Chelsea
Photo by Sava B. Martin

Most New Yorkers identify the Joyce Theater as their favorite place to see dance. It is a comfortable and intimate space, the sightlines are ideal, and the programming is varied and compelling. And we are almost never dark!

After more than two decades of bringing outstanding national and international dance companies to our audiences, we are on the brink of a major and tremendously exciting expansion. The story of how we got here is not long, but it is long-standing.

Before The Joyce existed, dance companies struggled to find suitable venues where they could hold their New York seasons. I think most people know that Eliot Feld and Cora Cahan with the help of a handful of key supporters renovated the old Elgin movie house and launched the Joyce in 1982. It has been constantly in demand ever since.

LEVYdance
Photo by Weiferd Watts

The season now consists of about one third companies that the Joyce presents, and we have launched many other programs to support and educate the dance community and audiences.

The Joyce has helped the dance world to thrive. However, a gap remains between the Joyce at 472 seats and other New York theaters where dance companies perform.

Leaders in the field began looking at this situation in the mid-1990s. There were preliminary reports, and the New York State Commission on the Arts asked the Joyce to undertake a feasibility study to examine the need for and viability of a new theater for dance that would offer somewhere between 800 and 1,200 seats.

The study was completed in July 2001, and it clearly demonstrated that a 900-seat to 1,000-seat theater devoted to dance would be filled for much of the year and would attract many dance companies that are too big for the Joyce but might not want to jump to a bigger theater.

There was a question about whether this new theater would require a completely separate organization to run and support it. After two decades of responsible fiscal management and successful fund raising, the Joyce Board of Trustees embraced this new project to expand the operations of the Joyce Theater Foundation to include a third venue.

The Trinayan Collective
Photo by Bjorg Magnea

We had already begun to look for an appropriate site to build when the tragic events of September 11 occurred. As with so many things in this city, our exploration was suspended for a time. Then out of tragedy came hope - everyone involved in rebuilding the site of the World Trade Center agreed that there needed to be a strong cultural component of the redevelopment.

We are deeply grateful to Governor George Pataki, Mayor Michael Bloomberg, the Lower Manhattan Development Corporation, and the many other individuals and organizations who shared the vision of including the arts in the rebirth of downtown.

The selection process was careful and lengthy, and it was only in June of this year that we had the final word that the Joyce would be included. That exciting news was followed by the inspiring selection of Frank Gehry as the architect who will design the performing arts center, which the Joyce will share with the Signature Theatre Company. Now we are at the brink of creating one of the most visible and important performing arts centers in the world.

Cedar Lake Ensemble
Photo by David Morgan

This is an incredible moment for dance, in New York and across the country. Dance is a universal language, reflecting our common humanity. It embodies the spirit of life, of creation and renewal, and it touches us all.

Of course, we have balanced budgets and even in these past couple of years of a tough economy, the Joyce has run a very successful endowment campaign. Careful management and a devoted board have allowed us to expand programs, such as commissioning new dance works. When we acquired Joyce Soho in 1996, we successfully raised a large amount of capital in a short time for the purchase and renovation of the building, and expanded our fundraising efforts to meet the increased annual operating budget of our organization.

When we launched The Joyce over 20 years ago, it was an experimental model placed in a desolate neighborhood. Today, it is a thriving, world-class institution in an exciting and completely revitalized community. We are committed to making the new Joyce International Dance Center an equally successful venture.

For The Joyce, the new venue emerges quite logically from our work to meet our mission of advancing the art of dance. New York clearly needs this theater, and we are certain that current and new supporters will enthusiastically embrace it.

Linda Shelton is executive director and a trustee of the Joyce Theater Foundation. She previously served as general manager of the Joffrey Ballet

Related Stories:

• Barry Grove: The Manhattan Theater Club Revamps a Legendary Theater
• Paul Kellogg: Seeking a New Space for the New York City Opera
• Glenn Lowry: The Museum of Modern Arts' New Home
• Linda Shelton: Creating a Center for Dance in Lower Manhattan

 

Old Theaters Are the Best


The Manhattan Theatre Club moved from its simple beginnings as an off-off Broadway theater to its home at City Center in 1984, and already by the early 1990s there was a clear need for a larger venue because the 300-seat and 150 seat-houses were selling out regularly.

As we began to consider our options, we quickly realized we needed to move to or add a space that would make our productions eligible for Tony awards, for the artists' recognition first and foremost but for the audiences as well. Those theaters must be located in the "Broadway box," essentially between 42nd and 59th streets and between Sixth and Eighth avenues, with 500 or more seats. As you can imagine, that real estate isn't easy to come by.

It took almost 10 years and a number of attempts before we finally focused our attention on the historic Biltmore Theater. We’d looked at it earlier and dismissed it as a ludicrous proposition. While it was built in 1925, and was home to such hits as "The Heiress," "Barefoot in the Park" and "Hair" and served as one of Broadway's favorite playhouses until it closed its doors on December 11, 1987 (ironically the same year as its landmarking), sadly it had become the victim of fire, theft, vandalism, and extensive water damage. Indeed, virtually anything that could happen with a theater happened to this poor little theater. And given the damage, it seemed an unlikely prospect.

By the time we began reconsidering it, almost out of desperation, the site had been taken over by developers Jack Parker and Joseph Moinian who were planning for a high-rise apartment complex next door. Coincidentally, during the same period I was working with Duncan Hazard of Polshek Partnership architects to identify sites and Duncan had been attending a performance of "The Iceman Cometh" at the Brooks Atkinson across the street. Well, that is a rather long play. And so, a couple of intermissions required extensive time on the street, staring and wondering perhaps why we didn’t go back and look at the Biltmore Theater. It was really Duncan’s asking, "why not the Biltmore?" that allowed us to come back and take a second look.

We needed to reconfigure the space from 1,000 seats to a more intimate 650 seats -- essentially business class for everyone –- with ancillary spaces critical to a nonprofit home: meeting space, improved sight lines, audience gathering space, etc. We quickly determined that this endeavor would require a $35 million capital campaign, which was quite an undertaking for an institution that, while it was raising $6 million annually, never before raised more than $3 million in special funds. However, the board of directors, equally committed to the project, along with their colleagues, pledged the first $10 million, which was matched by the developers and the extraordinary leadership of the City of New York soon joined by the state.

So with $20 million in pledges, we were happily ready to kick off our campaign in the late summer of 2001 just as the tragedy of 9/11 unfolded. In the wake of that terrible tragedy -- and soon the economic turmoil that followed -- it would have been very easy to put this project on hold. But our developer partners were determined to go ahead, and fortunately we were blessed with the extraordinary leadership of Manhattan Theatre Club’s chair Peter Solomon and his colleagues who quickly determined that we would go forward despite the difficulties. And so we officially launched the campaign and broke ground just three months later, in December of that year. Ultimately, by last year, we had raised the full $35 million and opened the building on schedule.

Meanwhile, this was an extraordinary expansion of our audience as well. And so having worked together on extended productions of plays -- "Proof" by David Auburn, and "The Tale of the Allergist's Wife, by Charles Bush -- we assembled combined efforts of an in-house staff with some people from outside agencies and partnerships that allowed us to launch a successful branding campaign called "I Want My MTC" to coincide with the completion of the building.

By the time we began our first season, we had 22,000 subscribers up almost 6,000 from the prior year and were selling a hugely expanded number of single tickets. Over the same period of time, we began two years of dialogue with some 14 theatrical unions – we had been dealing with three previous to that point in time -- to reach special operating agreements.

The building opened last fall, acclaimed by audiences and press alike. Over the last 12 months, it was the recipient of several awards, including the Lucy G. Moses Preservation Award from the New York Landmarks Conservancy, thanks in major part to Polshek Partnership.

In a special testimony about the theater before the New York Landmarks Committee in 1987, Ruth Goetz, who co-wrote "The Heiress," said it best: "If you are ever discouraged or disappointed with your life I advise you to go to the backstage door to the Biltmore Theater and enter quietly. Don’t trip over the cables on the floor. Somewhere in there will be the broken remains of a chair. Carry it to the left corner and sit down quietly and listen. You will hear 60 years of laughter and tears and bravos and catcalls, and you will know why playwrights say ‘old theaters are the best.’"

So the building is now open and celebrating its first birthday. We continue to face several challenges including the need for an endowment campaign, additional annual fundraising for the increased activity as our annual budget has risen from $12 million to $18 million and a host of other things.

But nonetheless I am happy to report that a year later we are thrilled to be producing Craig Lucas' play "Reckless" starring Mary-Louise Parker, which is running to great acclaim through December 19. And we found our smaller spaces at City Center to be as important as ever in bringing new works to New York audiences, including "Five By Tenn," a compilation of newly discovered Tennessee Williams' work and John Patrick Shanley's world premiere production of "Doubt" which opens next month. We doubled our education programs and are already at work on the newest play by Pulitzer Prize Winner Donald Margulies, "Brooklyn Boy" starring Adam Arkin, which we look forward to welcoming to the Biltmore stage in January as one of the first new American plays on Broadway this season.

Barry Grove is executive producer of the Manhattan Theatre Club.

 

Related Stories:

Barry Grove: The Manhattan Theater Club Revamps a Legendary Theater
Paul Kellogg: Seeking a New Space for the New York City Opera
Glenn Lowry: The Museum of Modern Arts' New Home
Linda Shelton: Creating a Center for Dance in Lower Manhattan

 

Can Critical Mass Negotiate a Truce?


Related Article:
Cycling in the City

When some 400 New Yorkers took to the streets on their bicycles in 2000, in a ride they called Critical Mass -- an effort to dramatize their claim to roads they see as overly dominated by the automobile -- they had six police escorts on scooters who were so friendly that they thanked the riders for the assignment. But by last month, four years and dozens of rides later, relations between the riders and the police had grown so strained that police arrested 33 participants.

The city had demanded that the group get a permit for its monthly rides. After a federal judge rejected the city's demands, hundreds of cyclists (among them, me) rode en masse around parts of Manhattan on the evening of October 29.

There were some harsh exchanges over the evening's event. Alex Storozynski, editor of AM NewYork, criticized "anarchists" in the group and accused them of beating a motorist and "blocking an ambulance while it wailed." A commentator on E-bikes, the electronic exchange for cyclists in New York, called Storozynski's piece, "spittle-flecked ravings" with "one inaccuracy per paragraph."

Police Commissioner Raymond Kelly wrote an op-ed in the Daily News under the headline "Extremists have hijacked the bike rides." Matthew Roth, speaking for Times Up!, a local environmental group closely associated with Critical Mass, blasted Kelly's comments as unethical.

Why have attitudes changed?

For one thing, the ride has grown from the original 400 cyclists; in the March 2004 ride, there were some 2,000 people on bicycles, an astonishing number.

But police say the big change came in the days leading up to the Republican National Convention in August, when, they charge, "anarchists" infiltrated the ride and made it less peaceful. Police arrested more than 250 cyclists during the August ride, and seized many bikes. Since then, the police say, the character of the Critical Mass rides has changed.

But regular riders dispute this claim. Malia Howley, 29, said that the convention ride was an isolated incident, and that Critical Mass has, once again, become what it was before the convention. What has changed, she said, is the city's response. "Now it's helicopters and police everywhere," she said. "They're making a much bigger deal out of it than they need to."

Many observers, including some police officers, wonder why Critical Mass does not simply get a permit for its rides. For one, people involved in the ride say that Times Up! does not want to apply for a permit because the group does not want to take a leadership role in the ride. A permit, they say, would fly in the face of what Critical Mass is -- a "leaderless" group of cyclists traveling in unplanned directions to make a point.

That point is "to make New Yorkers and especially the administration spend more energy and put more resources into making the city friendlier for cyclists, " said Roth. "Do cars need a permit to drive in the street?"

But police say that a permit would improve the safety of the cyclists and help the city better plan for the ride, particularly if an emergency vehicle needs to get through the area. And some observers note that, any cyclists hurt during the ride could sue the city, claiming that the police did not properly protect them.

Ironically, the dispute comes as things are improving for bicyclists in New York. The Bloomberg administration has made a commitment to improve the safety of cyclists in New York, and has expanded bike lanes, greenways and bike paths

 



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