Final Draft Report
ECONOMIC ASSESSMENT OF THE BROOKLYN ECONOMY – 2016 UPDATE
Prepared for
Submitted by
Washington Square Partners
Land Econ Group
September 5, 2016
Welcome to the Brooklyn Chamber of Commerce’s second annual borough-wide economic analysis. The Brooklyn Chamber commissioned the following report in an effort to
comparatively detail short-term changes, such as growth trends in the borough, to identify areas of improvement and opportunities for growth since last year’s findings.
The borough’s economy has undeniably soared to new heights since the last year. Here are some highlights:
•
In 2015, Brooklyn experienced its largest increase in wages since 2004. Brooklyn has now experienced two straight years of wage growth. Wages increased across all
industries.
•
In terms of population growth, Brooklyn continued growing at a robust pace in 2015, surpassing the rate of growth of the state by a significant margin.
•
Brooklyn’s superb job growth continues. In absolute numbers, it is the largest increase in over 15 years. In 2015, Brooklyn netted more than 30,000 new private sector jobs.
In percentage terms, it surpassed the rest of the city and state by significant margins.
•
Brooklyn’s job base is becoming more diversified. The Information industry, which had previously experienced moderate growth, grew by more than 23% in 2015 and netted
more than 1,900 new jobs.
•
Brooklyn’s unemployment rate is now at pre Great Recession levels. Brooklyn has had 44 months of year-on-year declines in unemployment since 2012. On a monthlybasis, unemployment in May 2016 was the lowest it has been in 15 years.
While our short-term successes have been substantial, we need to be cognizant of the disparities still plaguing the borough. Given the tremendous job growth and expansion of vital
industries, there are unique opportunities to close the wage gap, lower poverty levels, reduce inequality and improve the economic standing of neighborhoods throughout the borough.
Along with linking employment opportunities to Brooklynites most in need, we also must make significant investments in the drivers of economic growth, such as infrastructure,
education, workforce training, and focus on crafting policies and programs that assist Brooklyn’s primary employers – our small businesses.
Brooklyn is on course to become the third largest city in the United States by 2020, surpassing Chicago, if counted as an independent city. The short-term analysis in this follow-up
study will give us more data to better handle anticipated immense growth in the next decade.
The Chamber invites Brooklyn’s residents, businesses and organizations to use this is a tool to provide us with ideas and suggestions on how to further improve our great borough.
Very truly yours,
Denise Arbesu
Chair, Board of Directors
Carlo A. Scissura, Esq.
President & CEO
Table of Contents
I. SUMMARY
1
II. BROOKLYN’S ECONOMIC PERFORMANCE
3
Population
3
Jobs
6
Wages
9
Personal Income
10
Unemployment
12
Poverty
14
Inequality
16
III. RETAIL INDUSTRY LEAKAGE/SURPLUS ANALYSIS
Job Growth by Retail Segment
IV. INNOVATION
17
18
20
Patents Granted
20
Terminal Degrees
21
Science Workers
21
Small Businesses
21
Young Businesses
22
V. SELF-EMPLOYMENT TRENDS
23
THIS IS BROOKLYN
WAGES
In 2015, Brooklyn experienced its largest
increase in wages since 2004. Brooklyn
has now experienced two straight years of wage
growth. Wages increased across all industries.
Private Sector Real Wage Growth, 2014-­‐15 4.3% 3.8% 2.6% 2.2% 1.2% Brooklyn NYC NYC (Excluding Brooklyn and Manha?an) the state by a significant margin.
2014-­‐2015 Popula<on Growth 0.61% 0.65% 0.24% Brooklyn NYC Brooklyn’s population growth
since 2010 was driven by growth
of prime-age workers (25-44 year
olds accounted for 62% of growth),
whites and Asians.
By comparison, the U.S. as a whole has
grown older (with the cohort 60+ years accounting for more than half the population
growth) and more Hispanic.
NY State NYS (Excl. Brooklyn and Manha?an) JOB CREATION
POPULATION GROWTH
Brooklyn continued growing at a robust
pace in 2015, surpassing the rate of growth of
NYS Brooklyn’s superb job
growth continues.
In 2015, Brooklyn generated
more than 30,000 net new
private sector jobs. In absolute
numbers, it is the largest
increase in over 15 years. In
percentage terms, it surpassed
the rest of the city and state by
significant margins.
Private Sector Employment Growth: 2014-­‐2015 5.6% 3.2% 2.2% Brooklyn NY City NY State Brooklyn experienced job growth across all industries.
INCOME
Brooklyn has significant purchasing power with $104B in personal income,
making it one of the largest counties in the country in 2014 (the last year for which data is available). This highlights Brooklyn’s economic power and potential. Personal income in Brooklyn
has also been growing at a moderately robust pace, surpassing the rest of the boroughs (except
Manhattan) and the state. IN 2014, PERSONAL INCOME IN BROOKLYN GREW BY OVER $3 BILLION
IN REAL TERMS.
Health Care and Social Assistance and Tourism and Entertainment
continue to be key employment drivers, accounting for 23% and 14%
of net new private sector jobs, respectively.
Brooklyn’s job base is growing more diversified.
The Information industry, which had previously experienced moderate growth, grew by more than 23% in 2015 and added more than
1,900 net new jobs. Management of Companies and Enterprises, and
Administrative and Support and Waste Management and Remediation Services grew at very impressive rates of 12.8% and 13%,
respectively.
THIS IS BROOKLYN
UNEMPLOYMENT
Brooklyn’s unemployment rate is now at pre-Great
Recession levels. Brooklyn has had 44 months of year-on-
year declines in unemployment since 2012. On a monthly-basis,
unemployment in May 2016 was the lowest it has been in 15 years.
Brooklyn's Unemployment Rate: 12-­‐Month Average INNOVATION
Brooklyn continues to be a magnet for technology and innovation.
Brooklyn’s growth in patents granted
In 2014, Brooklyn continued to attract
in 2014 has been impressive. The number adults with science and engineering
of patents per employee grew 7%, compared to
6% in the city and 2.8% in the state.
college degrees, managing to grow by 12% even
while the surrounding areas had net losses.
12.0% 8.0% 6.0% Jun '07 5.2% May '16 5.4% 4.0% 0.0% Dec '00 Apr '01 Aug '01 Dec '01 Apr '02 Aug '02 Dec '02 Apr '03 Aug '03 Dec '03 Apr '04 Aug '04 Dec '04 Apr '05 Aug '05 Dec '05 Apr '06 Aug '06 Dec '06 Apr '07 Aug '07 Dec '07 Apr '08 Aug '08 Dec '08 Apr '09 Aug '09 Dec '09 Apr '10 Aug '10 Dec '10 Apr '11 Aug '11 Dec '11 Apr '12 Aug '12 Dec '12 Apr '13 Aug '13 Dec '13 Apr '14 Aug '14 Dec '14 Apr '15 Aug '15 Dec '15 Apr '16 2.0% Since 2010, Brooklyn has been closing the gap in
unemployment with the city and state. The difference in
unemployment between Brooklyn and the city declined from 60 basis
points to 10. The gap with the state declined from 180 to 40 basis
points.
Patent Grants Patents / 100,000 Employees 10.0% 84.9 82.4 89.3 70.6 56.3 66.7 58.5 56.8 62.8 21.2 19.6 22.4 23.4 21.2 15.7 20.1 17.1 22.3 20.3 19.0 20.9 2004 2005 2006 Brooklyn 97.8 100.6 2007 2008 29.8 28.0 33.4 32.3 30.1 34.0 2009 2010 2011 2012 New York City 41.4 44.2 39.7 42.1 2013 2014 New York State RETAIL SECTOR OPPORTUNITIES
A 2015 Brooklyn retail gap analysis reveals retail sectors that have a leakage
of sales. These sectors are undersupplied in Brooklyn and may present retail opportunities.
Between 2013 and 2014, demographic groups with typically higher
unemployment, such as people with low educational attainment,
blacks and Hispanics have experienced the largest declines in
unemployment.
SMALL BUSINESS BOROUGH
Small businesses account for a high share of employment in Brooklyn. Small businesses (i.e., businesses with under
50 employees) account for nearly 40% of jobs in Brooklyn. By comparison, small businesses account for under 30% of jobs in the city
and state.
Aggregating the leakage and surplus for all categories, there was $5.8 billion in annual retail
leakage.
Retail leakage categories in
Brooklyn Retail Gap (Leakage/Surplus) by Category, 2015 Brooklyn included Motor Vehicle
$3,177 Motor Vehicle & Parts Dealers Dealers, General Merchandise,
$1,713 General Merchandise Gasoline Stations, and Food &
$1,112 Gasoline StaLons $807 Food & Beverage Beverage Stores.
Electronics & Appliance $450 Bldg Matls, Garden Equip & Supply $290 SporLng Goods, Hobby, Book, Music $133 Misc Store Retailers -­‐$2 Furniture & Home Furnishings -­‐$135 Nonstore Retailers -­‐$154 Health & Personal Care -­‐$414 Food Services & Drinking Places Clothing & Clothing Accessories Leakage Surplus -­‐$477 -­‐$657 -­‐$1,500 -­‐$500 $500 $1,500 $2,500 Retail Gap (Retail PotenLal -­‐ Retail Sales) $3,500 Millions Retail categories where Brooklyn
had the greatest surplus of sales,
drawing shoppers from outside
the area, include Clothing &
Clothing Accessories, Food
Services & Drinking Places, and
Health & Personal Care.
II. BROOKLYN’S ECONOMIC PERFORMANCE
Making a positive contribution to the economic performance of Brooklyn is the ultimate
goal of the Brooklyn Chamber of Commerce and its members. With this in mind, the
2015 Economic Assessment of the Brooklyn Economy (“the Baseline Study”)
assessed Brooklyn’s economic performance through a set of indicators. These
indicators, which range from job and wage growth to measures of poverty and
inequality, were selected to encompass a wide range of objectives that may be
important to borough residents, businesses, and policy makers.
This study revisits those indicators with an emphasis on the most recent short-term
changes, primarily from 2014 to 2015. However, for some of the indicators, such as
personal income, poverty, inequality, and patents, the data for 2015 is not yet
available. In such instances, the analysis is limited to the last year of available data,
most often 2014.
Also, whenever possible, mid-term (2009-2014) and long-term (2000-2015) trends are
included to provide context to the short-term changes. As before, for all indicators,
Brooklyn is benchmarked against various jurisdictions to illustrate the relative
circumstances found in Brooklyn. The comparison jurisdictions consist of other
boroughs, the city as whole, the state, or the U.S., depending on data availability.
Summary
The 2015 report highlighted the robust economic growth that Brooklyn has
experienced since 2010. The most recent indicators provide evidence that Brooklyn’s
economy continues on the same upward path, with jobs, wages, and personal income
growing at an unprecedented pace and unemployment dropping to pre-Great
Recession levels. While 2015 census data indicates a decrease in the rate of
population growth, Brooklyn’s population growth leads all other boroughs and is
expected to continue to increase. These factors highlight the strength of the Brooklyn
economy and point to an even brighter future.
Some challenges in the economic outlook, however, do not show signs of abating. In
particular, poverty and inequality could spell trouble for the economy, particularly in
the long run.
Population
Population growth in Brooklyn since 2010 appears to be driven by ‘prime-age’ workers
(i.e., people 25-44).
Detail
The U.S. Bureau of the Census
estimates Brooklyn’s population as
of July 2015 at approximately 2.64
million. That is an increase of
approximately 16,000 (0.61%) new
residents since 2014. However, it
should be noted that annual changes
are not considered to be exact
because of the variability in the
estimates program.1
NYC Population 2015
(millions)
Manhattan
1.64
19%
Brooklyn
2.64
31%
Queens
Nonetheless, Brooklyn’s population
2.34
has been increasing robustly since
Staten Bronx
27%
2006, reflecting the desirability of the
Island 1.46
borough as a place to live. Between
0.47 17%
2010 and 2015, Brooklyn was the
6%
fastest growing borough in both
percentage and absolute terms,
adding more than 126,000 new residents and accounting for more than 35% of total
population growth in New York City during this period. The rate of growth since 2010
in New York City and Brooklyn has not been seen since the 1920’s.2
Analyzing population growth since 2010 by demographic group reveals that the
groups that have grown the most are prime-working-age residents, as well as white
and Asian residents. Residents aged 25 to 44 years old account for nearly two-thirds
of the net population growth in Brooklyn between 2010 and 2015. Examining
population growth by race/ethnic composition reveals that whites and Asians account
for 80% of the growth, while the number of African Americans has declined. These
patterns are markedly different from trends in the U.S. as a whole where the
population is growing older (65 years and older), and with larger numbers of blacks
and Latinos.
Snapshot
Brooklyn continued growing at a robust pace in 2015, but population growth appears
to be slowing down relative to other boroughs such as the Bronx and Queens.
3
WHILE BROOKLYN’S POPULATION GROWTH HAS BEEN VERY STRONG, GROWTH
APPEARS TO BE SLOWING DOWN EVERY YEAR. BETWEEN 2010 AND 2014,
BROOKLYN’S POPULATION GREW AT APPROXIMATELY 1.1% PER YEAR. HOWEVER,
BETWEEN 2014-15 IT ONLY GREW AT 0.6%. NYC PLANNING ATTRIBUTES THIS
DECLINE TO A SUBSTANTIAL NET LOSS IN DOMESTIC MIGRATION.3 DESPITE THIS
DECLINE, THE BROOKLYN CHAMBER OF COMMERCE IS OPTIMISTIC ABOUT THE
POTENTIAL OF BROOKLYN TO CONTINUE TO GROW AT A HEALTHY PACE, MOSTLY
DUE TO ITS EXTENSIVE RESIDENTIAL EXPANSION POTENTIAL. BETWEEN 2010 AND
2015, BROOKLYN ADDED 126,400 NEW RESIDENTS.
BROOKLYN’S POPULATION CONTINUED TO OUTPACE THE STATE’S RATE OF
GROWTH IN 2015, BUT IT FELL BEHIND THE REST OF THE CITY. SPECIFICALLY,
POPULATION GROWTH IN BROOKLYN TRAILED QUEENS (0.71%) AND THE BRONX
(0.94%).
2014-2015 Population Growth
0.61%
0.65%
Net New Brooklyn Residents per Year
34,409
0.24%
29,254
26,100
20,622
16,015
Brooklyn
NYC
NY State
Source: U.S. Census Bureau and LEG.
2011
2012
2013
2014
2015
Source: U.S. Census Bureau and LEG. Please note that the year-on-year changes
may not be statistically significant. They are shown here to illustrate how Brooklyn’s
rate of population growth may be decreasing.
4
BROOKLYN’S POPULATION GROWTH SINCE 2010 IS DRIVEN PRIMARILY BY STRONG
GROWTH OF PRIME-WORKING-AGE RESIDENTS, WHITES AND ASIANS. BY
CONTRAST, THE U.S. POPULATION HAS BEEN GROWING OLDER AND MORE
HISPANIC.
60%
62%
Brooklyn Population Growth 2010-2015
by Demographic Group
18 - 24 years
19%
21%
29%
16%
25 - 44 years
4%
13%
45 - 64 years
> 65
36%
White
If Brooklyn were an independent city, it would be the fourth largest city in the U.S.,
behind New York City itself, Los Angeles and Chicago. However, as the 2015
Economic Assessment pointed out, due to long-term demographic trends, it is
plausible that Brooklyn could surpass Chicago and become the third largest “city” as
early as 2020.
As discussed above, population growth appears to be flattening out in Brooklyn.
Nonetheless, the graph below shows that Brooklyn continued to close in on Chicago in
2015. Per the 2015 estimates by the U.S. Census, Brooklyn is now approximately
84,000 residents short of surpassing Chicago as the third largest city. To put this
number in perspective, between 2011 and 2015, Brooklyn added more than 92,000
new residents.
It’s worth highlighting that Houston, Texas, currently the fourth largest city in the
country, also continued its impressive growth, but still trails Chicago and Brooklyn by a
significant margin.
Again, it should be noted that year-on-year changes may not be statistically significant
because of the variability in the estimates program, but it is still the most reliable
source of data available to gauge trends.
22%
8%
16%
13%
Asian
Other
1%
5%
0%
8%
African American
Two or More Races
Hispanic
-1%
By Race and Ethnicity
44%
48%
-20%
-4%
By Age Group
< 18 years
Could Brooklyn become the Third Largest City in the U.S.?
B RO O KLY N
US
Source: US Census Bureau.
Source: US Census Bureau.
5
Jobs
Snapshot
Brooklyn’s job growth continues to impress, outpacing the other boroughs in New York
City and the state by significant margins. In 2015, the private sector experienced its
largest increase in jobs in over 15 years. Job growth has been healthy to robust
across all private sector industries in Brooklyn. Health Care and Social Assistance,
and Tourism and Entertainment sectors continue to lead job growth, while technology
employment should be closely watched for ongoing growth.
Detail
Due to recent changes in the way government jobs are reported, this discussion
excludes government jobs and focuses instead on the private sector. See appendix A
for an explanation of the data changes.
During 2015, Brooklyn averaged nearly 562,000 private sector jobs, accounting for
nearly 16% of all jobs in the city and 7.4% of jobs in the state.
In 2015, Brooklyn experienced its largest absolute increase in private sector jobs in
more than 15 years, adding over 30,000 private sector jobs. Brooklyn’s rate of private
sector job growth (5.6%) was nearly double that of the city (3.2%) and nearly triple the
rate of the state (2.2%). In fact, Brooklyn was the fastest growing county in the state in
percentage terms.
Health Care and Social Assistance accounts for more than one fifth (or 6,800) of the
net new jobs created in 2015. The growth in health care jobs follows recent local and
national trends that resulted from passage of the Patient Protection and Affordable
Care ACT (ACA) as national legislation and the New York State Design System
Reform Incentive Program (DSRIP). Both ACA and DSRIP are incentivizing the
creation of community-based health care alternatives as lower cost options to hospital
or institutional care.4 In fact, one of DSRIP’s stated goals is to reduce “avoidable
hospital use by 25% over 5 years.” As a result, 5,000 of the net new health care jobs
in Brooklyn are in the ambulatory care sector, which includes home care. This would
follow recent citywide trends, since reports indicate that home health care jobs
increased 45% between 2009 and 2013 while jobs in ambulatory care settings
increased by 10%.5 According to a February 2015 report by the United Hospital Fund,
there are 103 urgent care centers in New York City, including CityMD, Brooklyn
Urgent Care of Boro Park, Quality First Urgent Care, and Statcare Urgent & Walk-in
Medical Care, all of which are in Brooklyn and another 55 that are planned to open in
the future.6 The report also identified 18 retail clinics, including 12 in New York City. In
the past few years, the number of walk-in clinics in Brooklyn has grown exponentially.
As shown below, Tourism and Entertainment is the second fastest growing industry in
Brooklyn accounting for nearly 15% (or 4,200) of the new jobs created. Out of the
4,200 new Tourism and Entertainment jobs, 3,500 are new jobs in the restaurant and
bar industry. Neighborhoods such as Crown Heights, Williamsburg, Greenpoint, and
Bushwick saw many new restaurants emerge. Brooklyn’s organic movement, driven
by millennials, food aficionados and young families, has sparked restaurant creation
and employment growth in new restaurants that can provide high-quality,
environmentally friendly food options and establishments that serve craft beverages at
lower prices than in Manhattan.
In addition to the industries discussed above, three other industries need to be
highlighted due to their impressive performance (in percentage terms): (1) Information
(2) Management of Companies and Enterprises, and (3) Administrative and Support
and Waste Management and Remediation Services). The 2015 Baseline report
identified the Information industry as a moderate growth industry based on midterm
trends, but in 2015, this industry bucked the trend, growing by more than 23% and
adding more than 1,900 net new jobs. The 2015 Baseline report identified
Management of Companies and Enterprises, and Administrative and Support and
Waste Management and Remediation Services as two of the “emerging industries” in
Brooklyn. As shown below, these two industries continued growing at very robust
rates of 12.8% and 13%, respectively.
The superb growth of these industries, as well as strong growth across all other
industries in Brooklyn, is a sign, not only that the Brooklyn economy continues to
thrive, but that is it also becoming more diverse.
Brooklyn's Share of Net New
Jobs Created in NYC between
2014 and 2015
IN 2105, BROOKLYN GENERATED
MORE THAN 30,000 NET NEW
JOBS. THAT IS THE LARGEST
INCREASE (IN ABSOLUTE
NUMBERS) IN AT LEAST 15 YEARS.
Brooklyn
30,032
27%
Rest of NYC
81,260
73%
Source: New York State Dept. of Labor and LEG.
6
BECAUSE OF ITS IMPRESSIVE JOB
GROWTH, BROOKLYN’S
IMPORTANCE AS A JOB CENTER IS
STEADILY INCREASING.
Brooklyn's Share of New York
City's Employment
15.9%
15.0%
IN TERMS OF PRIVATE SECTOR EMPLOYMENT, BROOKLYN WAS THE FASTEST
GROWING COUNTY IN NEW YORK STATE IN 2015.
Job Growth Largest Counties - Private Sector
5.6%
14.2%
5.1%
4.2%
4.0%
3.8%
Seneca County
Queens
County
Saratoga
County
Year 2005
Year 2010
Year 2015
Source: New York State Dept. of Labor and LEG.
BROOKLYN’S PRIVATE SECTOR JOB GROWTH IN 2015 EASILY OUTPACED THE CITY
AND STATE IN 2015.
Kings County
(Brooklyn)
Orleans
County
Source: New York State Department of Labor and LEG.
Private Sector Employment Growth: 2014-2015
STRONG JOB GROWTH ACROSS SO MANY INDUSTRIES INDICATES THAT
BROOKLYN’S ECONOMY IS BECOMING MORE DIVERSE (SEE NEXT PAGE).
5.6%
3.2%
2.2%
Brooklyn
NY City
NY State
Source: New York State Department of Labor and LEG.
7
JOB GROWTH IN BROOKLYN IN 2015 WAS MODERATE TO ROBUST ACROSS ALL INDUSTRIES. HEALTH CARE AND SOCIAL ASSISTANCE LED THE WAY, CREATING MORE
THAN 11,000 NET NEW JOBS. HOWEVER, TWO INDUSTRIES PREVIOUSLY IDENTIFIED AS “EMERGING INDUSTRIES”, (1) MANAGEMENT OF COMPANIES AND
ENTERPRISES, AND (2) ADMINISTRATIVE AND SUPPORT AND WASTE MANAGEMENT AND REMEDIATION SERVICES, ALSO GREW AT AN EXTRAORDINARY PACE.
FURTHERMORE, THE INFORMATION INDUSTRY PREVIOUSLY IDENTIFIED AS A “MODERATE GROWTH INDUSTRY” ALSO EXPERIENCED STRONG GROWTH IN 2015.
Private Sector Job Growth in Brooklyn by Industry: 2014-2015 [1]
Sorted by Growth Rate
Information
8.0
Management of Companies
and Enterprises
1.9
9.9
23.4%
2.7 0.4 3.1
13.0%
Admin. and Support and Waste Mgmnt.
and Remediation Services
25.5
Tourism and Entertainment [2]
47.3
Finance and Insurance
15.4
Construction
26.6
2.2 28.8
8.3%
Other Services
(except Public Administration)
25.6
2.0 27.6
7.8%
Professional, Scientific,
and Technical Services
19.6
Transportation and Warehousing
18.5
0.8 19.4
4.5%
Real Estate and Rental and Leasing
16.4
0.7 17.1
4.4%
Health Care and Social Assistance
171.7
Educational Services
27.3
Retail Trade
72.2
Manufacturing
20.7
Wholesale Trade
24.6
0
28.7
3.3
12.8%
4.2 51.5
1.3
9.0%
16.7
8.5%
0.9 20.5
4.8%
6.8 178.4
1.0
28.3
3.6%
2.1
74.3
3.0%
0.4 21.1
0.5
20
average of all
industries 5.06%
3.9%
2.1%
Jobs in 2014
25.0
40
60
80
100
Jobs added 2014-15
120
140
Jobs in 2015
160
180
Thousands of Jobs
1.9%
2000%
5%
10%
15%
20%
Growth Rate (2014-15)
Source: U.S. Bureau of Labor Statistics and LEG.
[1] Excludes NAICS 99 (Unclassified), NAICS 22 (Utilities), NAICS 11 (Agriculture, Forestry, Fishing and Hunting), and NAICS 21 (Mining, Quarrying, and Oil and Gas Extraction).
[2] Includes NAICS 71 (Arts, Entertainment, and Recreation) and NAICS 72 (Accommodation and Food Services).
8
Wages
Snapshot
Wage Growth
Brooklyn’s average wages continue to trail those for the city and state, even after
excluding Manhattan, which highly skews averages. However, there are reasons to be
optimistic. Brooklyn experienced positive real wage growth over the past two years,
and in 2015 it experienced its largest increase since 2004.
Our previous analysis noted that since 2009, following the Great Recession, real wage
growth had stagnated and failed to keep up with inflation (i.e., real wages declined).
We also noted that the best prescription for wage growth is employment creation and
posited that wage growth would follow when the labor markets have fully returned to
normal (i.e., full employment).8 There are indications that Brooklyn is moving in this
direction; as jobs increase and unemployment continues to drop, real wages are
starting to increase.
Detail
Average Wages
In 2015, the average annual wage in Brooklyn was $41,178 compared to $89,105 in
New York City, and $68,771 in the whole state. However, as noted in the 2015
Baseline Study, average wages for the city and the state are skewed by high wages
on Wall Street, which concentrate primarily in Manhattan.7 When Manhattan wages
are excluded, the gap between Brooklyn and the rest of the city and state is smaller
but still significant; Brooklyn’s average wages are 11% and 18% lower than the rest of
city and state, respectively. However, while Brooklyn wages still trail the city and state,
there are reasons to be optimistic.
2015 AVERAGE ANNUAL WAGES IN BROOKLYN REMAIN BELOW THE CITY AND THE
STATE. HOWEVER, THE CITY’S AND STATE’S AVERAGE WAGES ARE HIGHLY SKEWED
UPWARDS BY WALL STREET. EXCLUDING MANHATTAN WAGES REDUCES THE GAP
BETWEEN BROOKLYN AND THE REST OF THE CITY AND STATE.
In 2014, wages in Brooklyn increased by 0.8% in real terms (i.e., controlling for
inflation). While the increase was rather small, it was still significant because it was the
first time that wages had increased in real terms since 2008.
2015 brought more reasons to be optimistic about wages. Real wages in Brooklyn
increased by 4.3% in 2015. That represents the largest increase since 2004. That
growth rate is also significantly above wages in the rest of New York City and the
state.
These wage increases were seen across all private sector industries in Brooklyn.
BROOKLYN HAS NOW EXPERIENCED TWO CONSECUTIVE YEARS OF WAGE
GROWTH. IN 2015, IT EXPERIENCED ITS LARGEST INCREASE SINCE 2004.
Private Sector Real Wage Growth, 2014-15
Private Sector Wages, 2015
4.3%
$89,105
3.8%
$68,771
$41,178
2.2%
$50,330
$46,200
1.2%
Brooklyn
Brooklyn
NYC
NYC (Excluding
Brooklyn and
Manhattan)
Source: New York State Department of Labor and LEG.
NYS
NYS (Excl.
Brooklyn and
Manhattan)
2.6%
NYC
NYC (Excluding
Brooklyn and
Manhattan)
NYS
NYS (Excl.
Brooklyn and
Manhattan)
Source: New York State Department of Labor, U.S. Bureau of Labor Statistics, and
LEG.
* Real Wages equal nominal wages adjusted by the Consumer Price Index for Urban
Wage Earners and Clerical Workers.
9
PRIVATE SECTOR REAL WAGE GROWTH IN BROOKLYN IN 2015 WAS HEALTHY TO
ROBUST ACROSS ALL INDUSTRIES
Real Wage Growth in Brooklyn by Indusstry: 2014-15
Sorted by Average Annual Wage in 2015
Finance and Insurance
Information
Mgmt. of Companies and Enterprises
Professional and Technical Services
Construction
Wholesale Trade
Real Estate and Rental and Leasing
Total, All Private Industries
Manufacturing
Educational Services
Health Care and Social Assistance
Transportation and Warehousing
Administrative and Waste Services
Retail Trade
Unclassified
Other Services (incl. Public Administration)
Tourism and Entertainment
Average Annual Wages
2014
2015
$74,670
$86,788
$78,854
$80,567
$62,814
$70,949
$60,184
$63,041
$56,375
$59,168
$47,771
$49,845
$42,122
$44,271
$39,465
$41,178
$38,852
$40,755
$39,337
$40,693
$39,323
$40,136
$36,894
$37,264
$30,022
$30,462
$28,824
$29,960
$27,950
$29,514
$25,995
$27,589
$23,644
$24,811
Annual
Increase
16.2%
2.2%
13.0%
4.7%
5.0%
4.3%
5.1%
4.3%
4.9%
3.4%
2.1%
1.0%
1.5%
3.9%
5.6%
6.1%
4.9%
Source: New York State Department of Labor and LEG. 2014 wages are shown in real
terms (i.e., net of inflation).
Personal Income
On November 2015, the U.S. Bureau of Economic Analysis (BEA) revised its
estimates dating back to 1969. Therefore, the numbers below differ from the numbers
reported in the 2015 Baseline Study. For example, the BEA had previously estimated
personal income in Brooklyn for 2013 at approximately $110 billion. That figure has
been revised to $100 billion. Additionally, there is a lag in reporting of personal income
data at the county level. Therefore, the most recent data available is for 2014.
Snapshot
Brooklyn’s personal income in 2014 was very sizeable at $104.6 billion, making it one
of the largest counties in the country. This highlights the significance of Brooklyn’s
economy and potential. Personal income in Brooklyn has also been growing at a
healthy pace, surpassing the rest of the boroughs, except Manhattan. In 2014 alone,
personal income in Brooklyn increased by over $3 billion dollars or 2.2% in real terms.
Detail
Brooklyn’s aggregate income is impressive.9 In 2014 Brooklyn residents earned nearly
$104.6 billion in personal income - approximately 21% of the city’s and 10% of the
state’s total personal income. In terms of personal income, Brooklyn (Kings County) is
the 13th largest county in the U.S. (same as in 2013), ahead of places such as San
Francisco (San Francisco County, CA), and Philadelphia (Philadelphia County, PA). In
fact, Brooklyn’s personal income is larger than that of 17 individual U.S. states.
Brooklyn’s annual per capita income is moderate at nearly $40,000; this is below the
city ($60,115), the state ($55,753) and the country ($46,049). However, estimates for
New York City are skewed by very high income individuals based in Manhattan and
the state’s estimate is skewed by very high income individuals based in not only
Manhattan, but also Westchester County and Nassau County. Excluding these
jurisdictions from the estimates, the city’s and state’s per capita estimates are
comparable to Brooklyn.
Brooklyn’s mid-term trends in personal income are also positive. Despite a slight
decline in 2012, between 2009 and 2014, real (i.e., inflation adjusted) per capita
personal income increased by 7%. While this is roughly the same rate as the city as a
whole, Brooklyn’s real per capita personal income increased faster than any other
borough in the city with the exception of Manhattan.
Personal income in Brooklyn grew significantly in 2014 with an increase of 2.2% - the
second highest increase over the past 15 years. However, incomes also increased
significantly across the city and state, and Brooklyn’s increase in 2014, while
impressive, trailed that of the state as a whole and those of the other New York City
boroughs, with the exception of the Bronx.
10
WITH $104.6 BILLION IN PERSONAL INCOME, BROOKLYN ACCOUNTS FOR 21% OF
THE CITY’S AND 9% OF THE STATE’S TOTAL PERSONAL INCOME.
Total Personal Income, 2014
(in Billions)
Brooklyn
$105
9%
Rest of State
$591
54%
The Bronx
$46
9%
Rest of NYC
$403
37%
New York State Total = $1,098
Queens
$92
18%
IN 2014, BROOKLYN’S RANKING RELATIVE TO OTHER COUNTIES REMAINED THE
SAME AS IN 2013. RELATIVE TO ENTIRE STATES, BETWEEN 2013 TO 2014,
BROOKLYN MOVED AHEAD OF MISSISSIPPI.
Staten Island
$22
4%
Personal Income, 2014
U.S. Counties with largest personal income
Brooklyn
$105
21%
Manhattan
$242
48%
New York City Total = $507
Source: U.S. Bureau of Economic Analysis and LEG.
BROOKLYN’S PER CAPITA PERSONAL INCOME IS BELOW THE CITY, STATE AND U.S.
AVERAGES. HOWEVER, THE CITY AND STATE ESTIMATES ARE SKEWED BY VERY
HIGH INCOME INDIVIDUALS LIVING IN MANHATTAN. BROOKLYN’S ANNUAL PER
CAPITA INCOME IS COMPARABLE TO THE REST OF THE CITY AND STATE WHEN
MANHATTAN IS EXCLUDED.
Average Annual Personal Income, 2014
$60,115
$39,898
$55,753
$42,633
$38,973
IN TERMS OF PERSONAL INCOME, BROOKLYN IS THE 13TH LARGEST COUNTY IN
THE U.S. AHEAD OF PLACES SUCH AS PHILADELPHIA AND SAN FRANCISCO. IN FACT,
BROOKLYN’S PERSONAL INCOME IS LARGER THAN THAT OF 17 INDIVIDUAL STATES.
$46,049
Rank and County (central city included) (in Billions)
499.8
1 Los Angeles, CA
269.0
2 Cook, IL (Chicago)
252.7
3 Harris, TX (Houston)
242.2
4 New York, NY (Manhattan)
173.3
5 Orange, CA (Anaheim, Long Beach)
168.5
6 Maricopa, AZ (Phoenix)
167.9
7 San Diego, CA
143.3
8 King, WA (Seattle)
141.9
9 Santa Clara, CA (Silicon Valley/San Jose)
132.0
10 Dallas, TX
111.5
11 Miami-Dade, FL
108.9
12 Middlesex, MA (Boston)
104.6
13 Kings, NY (Brooklyn)
100.0
14 Nassau, NY
93.5
15 Palm Beach, FL
93.3
16 Fairfield, CT
91.7
17 Queens, NY
90.6
18 Alameda, CA (Oakland)
Comparison with U.S. States
Geography
(in Billions)
Brooklyn
104.6
Mississippi
103.1
Nebraska
89.5
New Mexico
77.4
New Hampshire
70.0
West Virginia
66.9
Hawaii†
65.3
Idaho
60.0
Maine
54.2
Rhode Island
51.0
D.C.
46.0
Delaware
43.4
North Dakota
41.3
Montana
40.8
Alaska†
39.8
South Dakota
38.6
Wyoming
31.9
Vermont
29.1
Source: U.S. Bureau of Economic Analysis and LEG.
* In contrast with NYC counties, most counties in this list are composed of multiple
jurisdictions each with its mayor and council. Los Angeles County for example has
more than 80 cities.
Brooklyn
NYC
NYC (Excl.
Manhattan)
NY State
NY State
(Adjusted*)
U.S.
Source: U.S. Bureau of Economic Analysis and LEG.
*Excludes the high income counties of New York (Manhattan), Westchester, and
Nassau Counties.
11
Relative
Growth
(Indexed
to 2009)
Relative
Growth
(Indexed
to 2009)
SINCE 2009, GROWTH OF REAL PER CAPITA INCOMES IN BROOKLYN HAS BEEN
MODERATELY STRONG, KEEPING PACE WITH THE CITY AND STATE. DURING THIS
PERIOD, REAL PER CAPITA INCOME IN BROOKLYN GREW FASTER THAN ANY OTHER
BOROUGH EXCEPT MANHATTAN. INCOME GROWTH ACCELERATED IN 2014, BUT
BROOKLYN LAGGED SLIGHTLY BEHIND THE REST OF THE CITY AND STATE.
Growth in Real Per Capita Income*
115%
115%
110%
110%
107%
107%
105%
105%
100%
100%
95%
'09
'10
'11
'12
Average Annual Growth
3.0%
'13
'13
2.7%
2.3%
2.5%
2.2%
2.6%
2.3% 2.4%
2.3%
1.8%
2.0%
1.5%
'14
'14
1.4%
1.4%
1.2%
0.3%
0.5%
0.3%
0.0%
Medium-term
2009-2014
Short-term
2013-2014
Manhattan
Queens
The Bronx
Brooklyn
New York City
New York State
Snapshot
Brooklyn has experienced very significant declines in unemployment reaching preGreat Recession levels. In May 2016, unemployment reached its lowest level in 15
years. The decline in unemployment has been most dramatic for socio-demographic
groups which have typically experienced higher unemployment, such as Hispanics,
blacks, and those with limited educational attainment.
Detail
Brooklyn’s (12 month) average unemployment has been declining rapidly since
peaking at 10.5% in the spring of 2010.10 Since September of 2012, Brooklyn
residents have experienced nearly continuous year-on-year declines in monthly
unemployment. This has been the longest period of continuous declines since before
2000. By May 2016, unemployment was 5.4%, close to its 15-year low. On a monthly
basis (i.e. comparing only data for the month of May), it was the lowest since at least
the year 2000.11
Despite significant improvements, Brooklyn’s unemployment continues to be slightly
higher than unemployment rates for the city and the state, however, Brooklyn is
quickly closing the gap. Since 2010, Brooklyn’s unemployment rate has declined
faster than the city and state.
Improvements in the unemployment rate appear to be most positive for some of the
socio-demographic groups, which have historically higher unemployment. For
example, between 2013 and 2104, Latinos, Blacks and people of “Other Race”,
experienced the largest declines in unemployment. Similarly, unemployment has
decreased the most for those with less than a high school diploma and those with
some college education (or with Associates Degree, but no bachelor).
0.2%
1.0%
Unemployment
Staten Island
Source: U.S. Census Bureau, U.S. Bureau of Labor Statistics, and LEG.
* Real per capita income equal nominal per capita income adjusted by the Consumer
Price Index (All Urban Consumers)
12
BROOKLYN’S 12-MONTH AVERAGE UNEMPLOYMENT RATE IS NOW AT PRE-GREAT
RECESSION LEVELS. ON A MONTHLY BASIS, UNEMPLOYMENT IN MAY 2016 WAS
THE LOWEST IN 15 YEARS (FOR THE MONTH OF MAY).
Unemployment Rate Comparison: 12-Month Average
BROOKLYN’S UNEMPLOYMENT RATE REMAINS SLIGHTLY ABOVE THE AVERAGES
FOR THE CITY AND STATE. AMONG THE CITY’S BOROUGHS, ONLY THE BRONX HAS A
HIGHER UNEMPLOYMENT RATE. HOWEVER, BROOKLYN IS QUICKLY CLOSING THE
GAP. SINCE 2010, BROOKLYN’S UNEMPLOYMENT RATE HAS DECLINED FASTER
THAN THE CITY AND STATE.
12.0%
10.0%
8.0%
6.0%
Jun '07
5.2%
May '16
5.4%
4.0%
2.0%
Jan '00
Jul '00
Jan '01
Jul '01
Jan '02
Jul '02
Jan '03
Jul '03
Jan '04
Jul '04
Jan '05
Jul '05
Jan '06
Jul '06
Jan '07
Jul '07
Jan '08
Jul '08
Jan '09
Jul '09
Jan '10
Jul '10
Jan '11
Jul '11
Jan '12
Jul '12
Jan '13
Jul '13
Jan '14
Jul '14
Jan '15
Jul '15
Jan '16
0.0%
Brooklyn
Source: U.S. Bureau of Labor Statistics and LEG.
BROOKLYN HAS EXPERIENCED 44 MONTHS OF YEAR-ON-YEAR DECLINES IN
UNEMPLOYMENT SINCE SEPTEMBER 2012. THIS IS THE LONGEST PERIOD OF
CONTINUOUS DECLINE SINCE 2000.
Unemployment Rate Comparison: 12-Month Average
12.0%
Brooklyn's Year-on-Year Change in Unemployment
(Change in percentage points compared to same month the previous year)
5.0%
10.0%
8.0%
6.0%
4.0%
4.0%
3.0%
2.0%
2.0%
-2.0%
Jan '16
Apr '16
Jul '15
Oct '15
Jan '15
Apr '15
Jul '14
Oct '14
Jan '14
Apr '14
Jul '13
NYC
Oct '13
Jan '13
Apr '13
Jul '12
Brooklyn
Oct '12
Jan '12
Apr '12
Jul '11
Oct '11
Jan '11
Apr '11
Jul '10
Oct '10
Jan '00
Jul '00
Jan '01
Jul '01
Jan '02
Jul '02
Jan '03
Jul '03
Jan '04
Jul '04
Jan '05
Jul '05
Jan '06
Jul '06
Jan '07
Jul '07
Jan '08
Jul '08
Jan '09
Jul '09
Jan '10
Jul '10
Jan '11
Jul '11
Jan '12
Jul '12
Jan '13
Jul '13
Jan '14
Jul '14
Jan '15
Jul '15
Jan '16
0.0%
-1.0%
Apr '10
0.0%
1.0%
NY State
Source: U.S. Bureau of Labor Statistics and LEG.
-3.0%
-4.0%
Source: U.S. Bureau of Labor Statistics and LEG.
13
UNEMPLOYMENT1 REMAINS HIGHER AMONG THOSE WITH LIMITED EDUCATION
ATTAINMENT AND MINORITIES. HOWEVER, BETWEEN 2013 AND 2014, SOME OF
THESE GROUPS, SUCH AS THOSE WITH EDUCATION LESS THAN HIGH SCHOOL,
THOSE WITH SOME COLLEGE, AS WELL AS BLACKS, PEOPLE OF “OTHER” RACE AND
LATINOS HAVE EXPERIENCED THE LARGEST DECLINES IN UNEMPLOYMENT RATES.
Changes in Unemployment Rate in Brooklyn by
Demographic Group
By Race or Ethnicity
White
Change in
Basis Points
-90*
Unemployment Rate
2014
2013
6.9%
7.8%
Black
-270*
11.4%
Asian
-240*
6.8%
9.2%
-280*
8.3%
11.1%
Other Race
Two or more races
Hispanic/Latino
14.1%
-60
9.9%
10.5%
-290*
10.0%
12.9%
By Educational Attainment
Less than High School
High School
-290*
10.5%
13.4%
0
10.2%
10.2%
Some College
-350*
7.0%
10.5%
College
-80*
4.7%
5.5%
Source: U.S. Census Bureau and LEG.*Change is statistically significant at 90%.
Poverty
Snapshot
Poverty has decreased significantly from its peak of 31.6%, but remains relatively high
at 23.4%. It is perhaps more troubling that since the Great Recession, poverty has
climbed back up despite percent increases in employment creation, and significant
increase in personal income and real wage gains. This points to the need to connect
those affected by poverty to the expanding economic base of the borough.
Detail
The 2015 Baseline report noted that there have been positive long-term trends in
poverty in Brooklyn, with poverty declining significantly from its peak of 31.6% in
1993.12 However, we noted that despite these improvements, rates of poverty in
Brooklyn remain high relative to the rest of the city and the state. In order to evaluate
mid-term poverty trends with a higher degree of accuracy we examine five-year data
from the American Community Survey.13
Data for 2010-2014 reveals that approximately 23.4% of the population in Brooklyn
lived below the poverty level; compared to 20.6% in the city and 15.6% in the state
and the U.S. as a whole. Perhaps more troubling, poverty has been increasing,
although this is not unique to Brooklyn, as the increases have been felt across the
country. Between 2005-09 and 2010-14, for example, poverty increased from 13.5 to
15.5% nationwide. Brooklyn actually experienced a lower increase in poverty than the
city and state as a whole.
As noted, poverty rates in Brooklyn have increased more for Asians, Blacks, and
those with limited educational attainment (i.e., those with education lower than a high
school diploma).
To examine the geographical distribution of poverty, we reviewed the NYC Center for
Economic Opportunity’s “CEO Poverty Measure 2005-2014”. Poverty in Brooklyn is
seen throughout the borough but concentrates in certain neighborhoods such as
Borough Park, Brownsville/Ocean Hill, and East New York/Starrett City. The
neighborhoods with the lowest poverty are Brooklyn Heights/Fort Greene and Park
Slope/Carroll Gardens.
1
Data by educational attainment and race/ethnicity are from the U.S. Census’ American
Community Survey and therefore not directly comparable to the estimates presented
elsewhere in this section.
While it is not possible to test the statistical confidence of the difference across
periods, the following trends are observed from the CEO data. Poverty rates have
decreased the most in northern Brooklyn neighborhoods, such as
Williamsburg/Greenpoint, Bushwick, North Crown Heights/Prospect Heights, and Fort
Greene. Meanwhile, poverty rates increased the most in the southern portion of the
Borough (Coney Island and Bay Ridge).
14
It is surprising to see poverty increasing at a time when unemployment has decreased
so significantly, and wages and personal income have increased at such a robust
pace. Perhaps this raises awareness about the need to continue and strengthen the
numerous citywide programs that provide a safety net, as well as create additional
opportunities to allow people to move beyond poverty and towards self-sufficiency.
POVERTY IN BROOKLYN AFFECTS TRADITIONALLY ECONOMICALLY
DISADVANTAGED GROUPS, SUCH AS BLACKS, LATINOS AND ADULTS WITH LIMITED
EDUCATIONAL ATTAINMENT (HIGH SCHOOL OR LOWER). THESE ARE THE SAME
GROUPS THAT HAVE EXPERIENCED THE LARGEST INCREASES IN POVERTY
FOLLOWING THE RECESSION.
As previously stated, Brooklyn is in a relatively fortunate position to alleviate poverty.
In contrast to other cities struggling with poverty issues, the recent dramatic increase
in jobs is promising. Policies aimed at creating jobs and connecting workers to those
opportunities will be critical to continued improvement in this area.
Changes in Poverty Rate in Brooklyn by Demographic
Group
BROOKLYN’S POVERTY RATE REMAINS ABOVE AVERAGE. HOWEVER, COMPARING
PRE- AND POST-RECESSION PERIODS, BROOKLYN HAS EXPERIENCED THE SMALLEST
INCREASE IN THE PERCENTAGE OF POPULATION LIVING BELOW POVERTY LEVEL.
By Race or Ethnicity
Poverty Rate
2005-09
2010-14
Change in
Basis Points
White
19.5%
21.0%
150*
Black
21.4%
23.2%
180*
Asian
22.6%
24.9%
230*
Other Race
32.9%
34.2%
130
Two or more races
18.7%
20.7%
200
Hispanic/Latino
30.3%
30.7%
40
Less than High School
31.2%
33.6%
240*
High School
19.0%
22.4%
340*
Some College
14.7%
16.3%
160*
College
8.2%
8.4%
20
By Educational Attainment
Source: U.S. Census Bureau and LEG.*Change is statistically significant at 90%.
Source: U.S. Census Bureau and LEG.Estimated differences between 2005-09 to
2010-14 are statistically significant at 90%.
15
POVERTY HAS DECREASED THE MOST IN NORTHERN BROOKLYN NEIGHBORHOODS,
SUCH AS WILLIAMSBURG/GREENPOINT, BUSHWICK, NORTH CROWN
HEIGHTS/PROSPECT HEIGHTS AND FORT GREENE. POVERTY RATES INCREASED THE
MOST IN THE SOUTHERN PORTION OF THE BOROUGH (CONEY ISLAND AND BAY
RIDGE).
Poverty Rates* in Brooklyn by Neighborhood, 2010-2014
(Number in parenthesis
represents poverty rate
estimates for 2008-2012)
Inequality
Snapshot
Inequality in Brooklyn has been increasing and is now higher than the rest of the city’s
boroughs, with the exception of Manhattan. It is also greater when compared to the
state and the country as a whole.
Detail
We examined two commonly used metrics to assess inequality in Brooklyn: the Gini
index14 and the ratio of household income at the 80th percentile to income at the 20th
percentile (P80/20 index).15 With all else equal, higher Gini and P80/20 indexes
indicate higher levels of inequality. Both indicators point toward relatively high
inequality in Brooklyn compared to the rest of the city (with the exception of
Manhattan, which has very high indices of inequality), the state and the country as a
whole.16
WE ALSO EXAMINED MID-TERM TRENDS IN INEQUALITY BY COMPARING THESE
INDICATORS ACROSS DIFFERENT PERIODS. WHILE THERE ARE SOME DIFFERENCES
ACROSS THE TWO METRICS, IN BOTH CASES, IT CAN BE OBSERVED THAT
INEQUALITY IN BROOKLYN IS INCREASING. HOWEVER, IT SHOULD BE NOTED THAT
THE DATA FOR COMPARING TRENDS ACROSS TIME ARE LESS THAN IDEAL (I.E.,
EITHER AVAILABLE ONLY FOR OVERLAPPING PERIODS OR NON STATISTICALLY
SIGNIFICANT). NONETHELESS, THESE TRENDS ARE REPORTED TO PROVIDE A
GENERAL OVERVIEW OF HOW INEQUALITY MAY BE CHANGING.
IF INEQUALITY IS INDEED INCREASING, IT WOULD BE A DEVELOPMENT
INCONSISTENT WITH PREVIOUS INDICATORS SUCH AS INCREASING WAGES,
PERSONAL INCOME, JOBS AND LOWER UNEMPLOYMENT, WHICH GENERALLY
POINT TOWARD A STRONGER BROOKLYN ECONOMY.
Source: NYC Office of the Mayor, “The CEO Poverty Measure 2005-2012”, April
2014.
*The Office of the Mayor uses a slightly different definition of poverty. Therefore, the
numbers shown in this figure are not directly comparable to the American Community
Survey numbers used in the rest of this section.
16
ACCORDING TO TWO DIFFERENT MEASURES OF INEQUALITY (THE GINI INDEX AND
THE RATIO OF HOUSEHOLDS’ INCOME AT THE 80TH PERCENTILE TO INCOME AT THE
20TH PERCENTILE), THE DISTRIBUTION OF INCOME IN BROOKLYN IS MORE
UNEQUAL RELATIVE TO THE STATE AND OTHER BOROUGHS IN THE CITY, WITH THE
EXCEPTION OF MANHATTAN.
GINI Coefficient, 2010-14
0.60
0.51
0.54
0.49
0.45
0.50
0.44
0.48
GINI Coefficient Trends
2007-09*
2011-13*
% Increase
Brooklyn
0.50
0.51
1.5% *
New York City
0.54
0.54
0.7%
NY State
0.50
0.51
0.6% *
U.S.
0.47
0.48
2.0% *
Source: U.S. Census Bureau and LEG. *The difference in GINI coefficient between
the periods 2006-2010 and 2010-2014 was not statistically significant, therefore the
data for these two periods is shown instead.
80/20 Income Ratio Trend
80/20 Ratio
2007-11*
2010-14
Brooklyn
Bronx
Manhattan Queens
Staten
Island
NYC
NY State
U.S.
Source: U.S. Census Bureau and LEG
Ratio of Household Income at the 80th Percentile to
Income at the 20th Percentile, 2010-14
Bronx
6.2
6.4
3.7%
New York City
6.2
6.5
4.6%
NY State
5.4
5.6
4.0%
U.S.
4.8
4.9
3.3%
6.5
6.4
4.9
Brooklyn
Brooklyn
Source: U.S. Census Bureau and LEG. *It is generally not recommended to compare
data for overlapping periods. However, data for 2005-2009 is not available on this
metric from the Census. This comparison is shown to understand the general idea of
how the ratios are changing, even if the changes are not statistically significant.
8.7
6.4
Percent
Increase
Manhattan Queens
5.6
5.2
Staten
Island
NY City
NY State
4.9
U.S.
Source: http://www.countyhealthrankings.org and LEG.
17
III. RETAIL INDUSTRY LEAKAGE/SURPLUS
ANALYSIS
Retail leakage and surplus measures the balance between the volume of supply (retail
sales) generated by the retail industry and the demand (spending by households [i.e.,
retail potential]) within the same industry. The analysis measures the difference
between actual and potential retail sales. Actual retail sales are estimates of sales to
consumers by retail establishments. Sales to businesses are excluded. Leakage in an
area represents a condition where a market's supply is less than the demand. That is,
retailers outside the market area are fulfilling the demand for retail products; therefore,
demand is leaking out of the trade area. Surplus in an area represents a condition
where supply exceeds the area's demand. Retailers are attracting shoppers that
reside outside the trade area, so there is a surplus in market supply.
Brooklyn Retail Gap (Leakage/Surplus) by Category, 2015
Motor Vehicle & Parts Dealers
$3,177
General Merchandise
$1,713
Gasoline Stations
$1,112
Food & Beverage
$807
Electronics & Appliance
$450
Bldg Matls, Garden Equip & Supply
$290
Sporting Goods, Hobby, Book, Music
$133
Misc Store Retailers
-$2
Furniture & Home Furnishings
-$135
Nonstore Retailers
-$154
Health & Personal Care
-$414
Food Services & Drinking Places
Clothing & Clothing Accessories
Leakage
Surplus
the 2015 database and methodology used by Esri hinders comparisons to previous
years’ data.2
In 2015, retail categories where Brooklyn has a surplus of sales and draws shoppers
from outside the area include Clothing and Clothing Accessories, Food Services and
Drinking Places, Health and Personal Care and Furniture and Home Furnishings
stores. Retail leakage categories in Brooklyn with the largest sales gap are Motor
Vehicle Dealers, General Merchandise, Gasoline Stations and Food and Beverage
Stores. Aggregating the leakage and surplus for all categories, there is approximately
$5.8 billion in annual retail leakage.
Job Growth by Retail Segment
As noted, due to changes in the way the data is reported, it is not possible to compare
the 2015 leakage results with previous years’ results. However, we can get a general
idea of what is happening in the retail sector in Brooklyn by looking at job/firm growth.
As shown below, the retail segment that created the most jobs in 2015 was Food and
Beverage Stores. The large growth in the Food and Beverage Stores category in 2015
can be partially explained by the opening of two new supermarkets. While exact
employment figures are not available for the Key Food at 490 Myrtle Avenue and the
Windsor Farms at 589 Prospect Avenue, the average American supermarket has 72
employees.17 This category is anticipated to continue to increase with a Trader Joe’s
opening in Downtown Brooklyn’s City Point in 2016 and another outpost under
construction in Williamsburg. Whole Foods has also recently opened an outpost in
Williamsburg. Wegmans plans to open in the Brooklyn Navy Yard in early 2018 and
has committed to creating 200 full time jobs and 400 part time jobs.18 The increase in
-$477
-$657
-$1,500
$500
$2,500
Millions
Retail Gap (Retail Potential - Retail Sales)
Source: Esri Business Analyst 2015.
Brooklyn’s retail leakage and surplus by category in 2015 is presented in the graph
above. While these figures for 2014 were examined in the baseline report, changes in
2
The reincorporation of business data from Infogroup in the production of the estimates is
new in 2015. The 2015 database differs from Esri's former business data source with regard to
data collection methodology and maintenance, industry classification, and employment and
sales estimation. This source change will hinder comparison of an area's retail profile with
earlier databases. Esri has also updated and enhanced the retail sales and retail potential
modeling methodology to improve the quality of industry estimates for small areas. Lastly,
the estimation of retail potential by industry incorporates the latest product line tables from
the 2007 Census of Retail Trade (CRT), as well as the latest Consumer Expenditure surveys
(2011 and 2012) from the Bureau of Labor Statistics.
18
the number of grocery stores in Brooklyn will help to allay the current leakage of over
$800 million.
Other retail segments that are growing or expanding rapidly in Brooklyn in terms of
employment include General Merchandise Stores, Clothing and Accessories Stores
and Health and Personal Care Stores, which combined added almost 1,100 net new
jobs in 2015. Growth of general merchandise stores will help to reduce the retail
leakage of more than $1 billion in Brooklyn. Growth in Clothing and Accessories and
Health and Personal Care Stores will further strengthen two retail segments that are
already performing relatively well in Brooklyn with a combined retail surplus of nearly
$1.1 billion.
It is also worth noting that the largest increase in the number of retail businesses in
Brooklyn was ‘nonstore retailers’. Not only did the number of firms and employees
working at these nonstore retailers increase dramatically in 2015, but this is also by far
the highest paying job category with an average annual wage of $68,092. Although
the figures are relatively small compared to other categories, there were over 100 new
firms and more than 260 new jobs in this retail sector in 2015. This growth reflects one
of the most prominent trends in retail: the growth of online retail. The big box stores –
Target, Best Buy, and Walmart – showed a 20% year-over-year increase in online
sales in 2015.19 This pattern extends far beyond the major retailers, since reports
indicate that a third of U.S. adults shop online weekly and over two-thirds buy
something online monthly, representing a major increase over the 2014 reported
figures.20 The most frequent online purchases are clothing and accessories,
electronics, games, toys and school supplies.
Retail Sector Job and Store Growth in Brooklyn
2014
Food and Beverage Stores
General Merchandise Stores
Clothing and Accessories Stores
Health and Personal Care Stores
Jobs
2015 Change
20,956 21,503
9,218
9,607
10,438 10,812
9,236
9,565
# of Businesses
2014
2015 Change
547
3,173
3,178
5
389
502
515
13
374
1,283
1,287
4
329
1,220
1,235
15
107
Nonstore Retailers
3,536
3,797
261
374
481
Miscellaneous Store Retailers
3,082
3,241
159
568
570
2
Sporting Goods/Hobby/Book/Music Stores
1,734
1,876
142
272
273
1
Furniture and Home Furnishings Stores
2,323
2,373
50
406
401
-5
Electronics and Appliance Stores
3,351
3,365
14
465
463
-2
2
968
948
-20
190
192
Building Materials and Garden Supply Stores
Gasoline Stations
4,551
4,525
-26
410
416
6
Motor Vehicle and Parts Dealers
2,789
2,708
-81
218
213
-5
72,182 74,320
2,138
9,079
9,222
143
Total Retail Trade
Source: Bureau of Labor Statistics, QCEW
Etsy, an online marketplace for handmade and vintage items, with gross merchandise
sales topping $1.9 billion in 2014 is headquartered in DUMBO Brooklyn.21 Most of
Etsy’s 700 employees supporting 54 million members are based in Brooklyn and the
company committed to having 740 local employees by 2019.22
19
IV. INNOVATION
Innovation is the one of the core engines of economic development, giving rise to new
jobs, new businesses and new industries. Measuring innovation is therefore vital to
showing how existing policies are working to attract workers that contribute to a
thriving, dynamic industrial sector.
Brooklyn continued to advance on this mark in 2014, with the rate of patent grants to
companies and individuals within the borough reaching 44.2 per 100,000 employees,
an increase of over 7%. This was a higher rate of growth and a larger absolute
number than in New York City.
The types of indicators used to measure innovation generally focus on the high tech
sector, as innovation is typically equated to technological progress. An “innovative
workforce,” in the public mind, is comprised of highly skilled workers, applying cuttingedge technology in R&D intensive companies with strong ties to leading centers of
excellence in the scientific world.23 Quantifying high technology innovation typically
approaches the issue from both directions, looking both at outputs that innovative
companies and workers generate (e.g., patents), as well as the inputs associated with
high technology work (e.g., high skilled workers, research institutions, number of
entrepreneurs, etc.). This section measures these widely used indicators of innovation
to illustrate the level of innovation in Brooklyn. There are many different forms of
innovation, and many innovative companies are not high technology firms. However,
the objective metrics used in this report are particularly appropriate for high technology
firms, and may provide a good proxy for other forms of innovation as well.
Patent grants are a useful measure of the output of innovation, but it is important to
recall that due to the time delay between patent filing and patent grant, they are a
lagging indicator of the innovation that gave rise to the patent filing. Most of the
patents issued in 2014 would have been filed in 2011 or even earlier.
Summary
The indicators of innovation illustrate Brooklyn’s continuing transformation of its
economy and labor force. 2014 saw the number of patents granted per capita
increase, continuing a three-year trend. Patents per worker are increasing, roughly on
par with the city and state, and the share of adults with terminal degrees (e.g.,
graduate and professional degrees) is increasing faster than the rest of the city, state
and country. The number of adults with degrees in science and engineering fields is
also on the rise. Brooklyn is growing and attracting a large number of entrepreneurs.
Furthermore, Brooklyn has high rates of small and relatively young companies, which
tend to drive innovation.
Patents Granted
Patent grants are a useful proxy for innovation. They frequently reflect developments
at the cutting edge of innovation, and additionally can occupy a wide range of fields
and thus, do not focus unduly on any particular industry. Patent grants are perhaps
the most traditional measure of innovation.
Patent Grants
Patents / 100,000 Employees
These indicators are not meant to measure the size or impact of innovation on the
economy of Brooklyn and the region. Rather, these metrics are used to longitudinally
measure Brooklyn’s performance at increasing the inputs and outputs that indicate an
innovative environment.
WHILE THE NUMBER OF PATENTS GRANTED PER 100,000 EMPLOYEES PER YEAR IN
BROOKLYN LAGS FAR BEHIND NEW YORK STATE, ITS GROWTH IN 2014 HAS BEEN
IMPRESSIVE. IN THE LAST YEAR THE NUMBER OF PATENTS ISSUED PER 100,000
EMPLOYEES GREW BY OVER 7% IN BROOKLYN, COMPARED TO 6% IN NEW YORK
CITY AND 2.8% IN THE STATE.
84.9
70.6
66.7
58.5
56.3
21.2
19.6
20.1
17.1
2004
2005
22.4
56.8
23.4
15.7
100.6
41.4
44.2
39.7
42.1
2013
2014
62.8
21.2
22.3
20.3
19.0
20.9
2006
2007
2008
2009
Brooklyn
82.4
97.8
89.3
New York City
29.8
28.0
32.3
30.1
2010
2011
33.4
34.0
2012
New York State
Source: U.S. Patent and Trademark Office, U.S. Census Bureau, and LEG.
Due to IBM’s headquarters in Armonk, New York, which for 22 consecutive years has
had the most U.S. patent grants of any company in the world and regularly receives
50% more patent grants in any given year than the next closest competitor, the rate of
patent grants for Brooklyn and New York City generally trails behind New York State.
The steady increase in patent grants to businesses and individuals in Brooklyn shows
an increasing density of novel inventions, giving rise to new claims to intellectual
property rights. While the rate of increase has slowed slightly, the overall rate is still
increasing at a brisk pace.
20
Terminal Degrees
Another useful proxy for the innovative capacity of the workforce is the share of the
population which possesses a terminal degree (Ph.D., M.D., etc.). Terminal degrees
reflect the potential pool of high human-capital individuals who are more likely to
engage in research or other innovative activities in their field of specialty or beyond.24
In 2014, Brooklyn’s share of adults with terminal degrees remained above the average
for the U.S., but still lagged behind New York City and New York State. Its growth is
on par with that in the city and state, but is starting from a lower point.
areas had net losses. This growth brought Brooklyn to par with the rest of New York
City, at approximately 6% of population. Both are still slightly below the rest of the
state, which may benefit both from having the IBM headquarters in Armonk as
mentioned earlier, and from the presence of renowned science and engineering
campuses outside of New York City that serve to attract this demographic.
If Brooklyn is able to maintain this pace of growth for one more year, it will surpass the
city and state in having a higher proportion of its adult population with science and
engineering degrees.
Adults with Degrees
D
in Science and Engineering Fields 1
Brooklyn continues to attract individuals with terminal degrees, and the percentage of
the population with graduate or professional degrees continues to rise.
IN 2014 THE SHARE OF BROOKLYN’S POPULATION WITH TERMINAL DEGREES
CONTINUED TO INCREASE, ALBEIT AT A SLOWER RATE THAN SINCE 2005.
% of Population 25 Years and Older
Share of Adults with Graduate/Professional Degrees
2013
2014
2013 -2014
% change
% of Adult Population in
2013
2104
94,204
105,291
12%
5.4%
6.0%
Rest of City
256,138
245,150
-4%
6.3%
6.0%
Rest of State
749,703
728,111
-3%
6.4%
6.2%
Brooklyn
Source: US Census Bureau, American Community Survey, and LEG.
1
Includes adults 25 years and older with college degrees and higher in 1)
Computers, Mathematics, and Statistics, 2) Biological, Agricultural, and
Environmental Sciences, 3) Physical and Related Sciences, and 4) Engineering.
15%
14%
13%
12%
Small Businesses
11%
10%
Business size can also impact both the above metrics of innovation, and innovative
activity itself.
9%
2005
Brooklyn
2009
New York City
2013
New York State
2014
U.S.
Source: US Census Bureau, American Community Survey, and LEG.
Science Workers
Further, we include measures on the number of resident adults with degrees of any
type in science and engineering fields. This serves two purposes: (1) as a proxy for
workforce potential to engage in basic research and development, and (2) to track how
Brooklyn compared to the surrounding region for attracting individuals that are more
likely than not to work in technological fields.
In 2014, Brooklyn continued its blistering record of attracting adults with science and
engineering college degrees, managing to grow by 12% even while the surrounding
"Small firms are a significant source of innovation and patent activity. Small
businesses develop more patents per employee than larger businesses, with the
smallest firms, those with fewer than 25 employees, producing the greatest number of
patents per employee. Furthermore, small firm patents tend to be more significant
than large firm patents, outperforming them in a number of categories including
growth, citation impact and originality."25
Other research supports the idea that small firms are highly innovative.26 Additionally,
many innovative companies are small businesses in the earliest stages of dramatic
growth.
The character of Brooklyn’s employer base is split between two extremes. The lion’s
share of Brooklyn’s employees works for large firms having more than 500 employees,
and a large number of firms have fewer than 20 employees. The following chart shows
the number of employees employed by firms of the listed size. There are many more
employers with 20 or fewer employees than employers with 500 or more employees.
While larger firms may be perceived as more stable, better able to weather economic
21
downturns, better disposed to draw on resources and perhaps more capable of having
capital available to dedicate towards research and development, small firms are critical
and potent drivers of innovation. Well over a third of businesses in Brooklyn are very
small businesses. In 2014, 29% of firms in Brooklyn had less than 20 employees and
another 10% had less than 50 employees.
Unsurprisingly, employment by firm size in Brooklyn has not changed significantly
since last year, as it is unlikely for many employers to have significant changes in size.
The same has held true of New York City and New York State.
IN 2014, FIRMS IN BROOKLYN WITH MORE THAN 500 AND FEWER THAN 20
EMPLOYEES ACCOUNTED FOR OVER 345,000 JOBS (67% OF TOTAL EMPLOYMENT).
EMPLOYMENT IN THE LARGEST AND SMALLEST FIRMS HAS GROWN AT THE
FASTEST RATE BETWEEN 2003 AND 2014.
Young Businesses
Young businesses are perceived as drivers of innovation, and numerous academic
studies have supported this conclusion. Specifically, firm age has been found to be
inversely related to innovative output,27 new- and intermediate-age firms tend to show
high probabilities of innovation,28 and firm age is negatively related to technical quality,
particularly in technology active areas.29 For this reason, we track employment by firm
age as an indicator of innovation.
Brooklyn has a higher percentage of employment in young age (1-3 years) and
intermediate age (4-10 years) firms and a lower percentage of employment in more
established firms (11+ years) as compared to the city and state.
Employment by Firm Size, 2014
% of Total Employment
Brooklyn
New York City
Employment by Firm Age, 2014
New York State
% of Total Employment
49%
52%
38%
Brooklyn
New York City
76%
New York State
79%
66%
29%
21%
15%
15%
19%
10%
9%
8%
15%
6%
8%
0-19
13%
7%
6%
20-49
50-249
250-499
500+
Firm Size by Number of Employees
5%
0-1 years
4%
7%
5%
2-3 years
4%
6%
4%
4%
4-5 years
10%
9%
6-10 years
11+ years
Firm Age
Source: QWI Explorer application, U.S. Census Bureau.
Source: QWI Explorer application, U.S. Census Bureau
Number of Employees (thousands)
Brooklyn Employment Growth by Firm Size
200
150
100
50
0
2004
0-19
2005
2006
2007
20-49
2008
2009
50-249
2010
2011
250-499
2012
2013
2014
500+
Source: QWI Explorer application, U.S. Census Bureau.
22
V. SELF-EMPLOYMENT TRENDS
The “self-employed” have recently become a group of interest for policy makers and
researchers. The reason is that this sub-group of the labor force that includes
entrepreneurs and freelancers has increased dramatically in the past decade. The
interest in tracking entrepreneurs is obvious. Entrepreneurs can create fast-growth,
high-impact enterprises, and attracting them has become a common goal of cities in
the U.S. and around the world.
Interest in freelance workers (i.e., independent workers, or 1099 workers) has been
spurred by the growing popularity of technology platforms such as Upwork (appdevelopers), Fiverr (designers, musicians), DogVacay (dogsitting), Uber and Lyft
(driver), or Business Talent Group (business consulting), among others, which create
marketplaces for freelancers. According to Forbes Magazine, there are 53 million
freelancers in America today and their number is expected to increase. Forbes further
predicts that by 2020, 50% of the U.S. workforce will be freelancers (not all of them
will be full-time freelancers, but they will be in some capacity).30 It is also noteworthy
that freelance work is not limited to blue-collar occupations. The growth of white-collar
freelancers is on the upswing as professionals, such as attorneys, accountants, and
consultants with world-class training and qualifications are choosing to work
independently.31 This has been described as “The Rise of the Supertemp” or “The
Third Wave of Virtual Work”, by the Harvard Business Review.32
Despite all the media coverage that this topic has received,“it has been hard to find
evidence of a strong, unambiguous shift toward” this type of work arrangement.33 For
example, self-employment data from the Current Population Survey points shows that
self-employment has trended downward over the past two decades.34 However, a
more recent analysis of the latest data available on the topic shows that nationwide
“[t]he percentage of workers engaged in alternative work arrangements – defined as
temporary help agency workers, on-call workers, contract workers, and independent
contractors or freelancers – rose from 10.1% in February 2005 to 15.8% in late
2015.”35
Due to the lack of reliable data, it is difficult to do an analysis at the borough level to
understand what is going on locally. Nonetheless, using data from the American
Community survey, we observe that self-employment in Brooklyn increased by 8.6%
between the period before the Great Recession and after.36 That rate of increase is
significantly higher than the city (1.1%), state (3%) and U.S. (5.1%).
Of course, not all the “self-employed” are busy creating fast-growth, high-impact
enterprises. The “self-employed” category can also include maids, construction
workers, dog-walkers, hair dressers, landscapers, street food vendors, etc., which
tend not to be drivers for business and job creation.
Growth of Self-employment in Brooklyn
(Employed Population 16 and Over)
2005-2009
2010-2014
Incorporated
29,474
33,014
Unincorporated
98,819
106,264
7,445 *
7.5%
128,293
139,278
10,985 *
8.6%
Total
Increase
3,540
12.0%
Source: U.S. Census Bureau, American Community Survey. *Change is statistically
significant at 90%.
Self-employment Growth: 2005-09 to 2010-14
12.0%
7.5%
8.7%
8.6%
5.1%
4.5%
3.0%
0.8% 1.3% 1.1%
-0.9%
-2.6%
Brooklyn
NYC
Incorporated
NY State
Unincorporated
U.S.
Total
Source: U.S. Census Bureau, American Community Survey.
Ross Levine and Yona Rubinstein at UC Berkeley and the London School of
Economics, respectively, examined U.S. Census data in order to identify a better
proxy for the type of entrepreneur that dreams up growth-creating innovations.37
Levine and Rubinstein conclude that the “incorporated self-employed” is a better proxy
for those engaged in growth-creating entrepreneurial activities than using the
aggregate group of self-employed, which includes non-incorporated self-employed.38
The incorporated self-employed subgroup is also more likely to include the “Super
23
temp” or those riding the “Third Wave of Virtual Work” described in the Harvard
Business Review articles.
Using this more narrowly defined subset of the self-employed, we observe that
Brooklyn has experienced an even more dramatic increase. The number of
incorporated self-employed increased by 12% compared to 0.8% for the city and
declines at the state and national level. However, it should be noted that the estimates
for this smaller sub-group are not as reliable as the overall estimates. Nonetheless,
these estimates point toward a significant increase in Brooklyn that is supported by
anecdotal evidence.
Drivers of Self-Employment Growth
There are many reasons why self-employment has increased so significantly in
Brooklyn. At the individual level, for example, there is a preference toward
entrepreneurial work among younger workers.39 As noted in Section I, Brooklyn has
experienced significant growth in the 25-44 cohort. For some experienced workers,
contract or project-based work has become more attractive than full-time employment
with an established company.40
Also, as previously noted, technological changes are also partially driving the growth
in self-employment. For example, in the last few years, new platforms for pairing talent
with businesses have been developed.41
From a more practical point of view, the emergence of co-working spaces in Brooklyn
offer hundreds of self-employed workers unprecedented support and resources. There
are at least 36 co-working spaces currently operating in Brooklyn. The boom in in coworking spaces has coincided with the start-up boom and the growth in selfemployment that Brooklyn has experienced.
Co-working spaces in Brooklyn, 2016
Space
1 Bat Haus Coworking
2 Bklyn Commons
3 Brooklyn Desks
4 Brooklyn Creative League
5 Brooklyn Works at 159
6 Brooklyn Writers Space
7 Brooklyn Writers Space
8 Brooklyn Writers Space
9 CoLab Factory
10 The Compound Cowork
11 Coworkrs
12 Ditmas Workspace
13 DUMBO Startup Lab
14 Freecandy
15 Green Desk
16 Green Desk
17 Green Desk
18 Green Desk
19 Green Desk
20 Green Desk
21 Green Desk
22 IFP Made in NY Media Center
23 Industrious
24 No-Space
25 Nowhere Studio
26 Pencilworks
27 Secret Clubhouse
28 SHARED Brooklyn
29 SPark Workshop Brooklyn
30 St. Lydia’s
31 The Bakery
32 The Yard
33 WeWork
34 Work Heights
35 Work Heights
36 TheWorkAround*
Location
Bushwick
Prospect Lefferts Gardens
Bushwick
Gowanus
South Slope
Gowanus
Carroll Gardens (7th St.)
Carroll Gardens (Court St.)
Downtown Brooklyn
Prospect-Lefferts Gardens
Gowanus
Ditmas Park
DUMBO
Clinton Hill
DUMBO (Jay st.)
DUMBO (Water St.)
DUMBO (Plymouth St.)
Downtown
Williamsburg
Greenpoint (67 West St.)
Greenpoint (42 West St.)
DUMBO
Prospect Heights
Greenpoint
Crown Heights
Greenpoint
Williamsburg
Red Hook
Sunset Park
Boerum Hill
Williamsburg
Williamsburg
DUMBO
Crown Heights (Dean St.)
Crown Heights (Franklin Ave.)
Williamsburg and Bushwick
Source: www.Brokelyn.com. * Not shown in map.
24
Co-Working Spaces in Brooklyn
Co-working spaces 20 and 21 are
located around the corner from each
other. Space 20 is not shown on map.
Co-working spaces 15 and 13 are
in the same building on different
floors. Space 13 not shown in
map.
Sources:www.Brokelyn.com and LEG.
25
Appendix A – Job Data Changes
According to data from the New York State Bureau of Labor Statistics (NYSBLS),
government jobs in Brooklyn increased from 35,840 in 2014 to 98,966 in 2015. That is
an increase of more than 175% in a single year. According to the NYCBLS, the city
government changed the way they report their employment from centrally, based on
the agency headquarters, to geographically by county. While the 2015 data is a more
accurate representation of how local government employment is actually distributed,
the adjustment makes the data less comparable with previous years. Since we are
interested in tracking how the borough’s economy is performing on a year-on-year
basis, we focused on private sector employment.
full employment is defined as when the unemployment rate is in the 5.2% to
5.6% range, according to the U.S. Federal Reserve. Dustan Prial, “Wage Growth
is the New Inflation Rate”, Fox Business, November 12, 2014.
9
We use the Bureau of Economic Analysis’s estimates of Personal Income. The
BEA and other Federal agencies generate other measures of income that better
reflect household spending capacity and the tax base, but the BEA’s estimate are
the most timely and comprehensive available at the County level. Ruser, J., Pilot,
A., and Nelson, C., “Alternative Measures of Household Income: BEA Personal
Income, CPS Money Income, and Beyond” , Bureau of Economic Analysis,
November 2004.
10
Seasonally-adjusted unemployment data are not available for Brooklyn.
Therefore, we compare 12-month averages.
11
1
Due to the uncertainty of variables in the estimates program, City Planning’s
Population Division only considers population rate increases to be significant in
5-year periods or longer.
2
http://www1.nyc.gov/site/planning/data-maps/nyc-population/current-futurepopulations.page
3
Ibid.
4
https://www.thestreet.com/story/12709240/1/why-outpatient-surgery-centersare-vital-to-obamacare.html
5
http://chws.albany.edu/archive/uploads/2015/10/Tracking_Report_2015.pdf
6
https://www.uhfnyc.org/publications/881033
7
It is not just Wall Street industries that have higher wages in Manhattan. In fact,
most industries have higher wages in Manhattan than elsewhere in the state. The
wage differential between Manhattan and the rest of the state is not unexpected.
The wage differential can be partly explained by “agglomeration economies”,
which enable highly dense places, such as Manhattan to become more
competitive by increasing the effective size of the labor force, making better
matches between worker skills and employer needs in hiring, and increasing
informal information sharing among skilled workers and innovating firms. Daniel
G. Chatman and Robert B. Noland, of UC Berkeley and Rutgers University,
respectively, found that such agglomeration economies are larger for cities with
more robust public transit systems, such as New York City. Chatman & Noland
“Transit Service, Physical Agglomeration and Productivity in US Metropolitan
Areas”, Urban Studies, April 2014 51: 917-937, first published on August 1, 2013.
8
Economists define full employment as an unemployment rate that includes no
cyclical (or deficient-demand) unemployment. In lay terms, when there is enough
demand in the economy for everyone who wants a job to have one. For the U.S.,
Comparing only one month across time addresses seasonality issues.
12
DiNapoli, T., Bleiwas, K. (2014, May). An Economic Snapshot of Brooklyn,
New York State Comptroller.
13
Using 5-year data from the American Community Survey allows us to test the
statistical significance of changes across years for smaller subgroups of the
population. Check out the following explanation of when to use 5-year data vs. 3year data. https://www.census.gov/programssurveys/acs/guidance/estimates.html
14
According to the World Bank, the “Gini index measures the extent to which the
distribution of income or consumption expenditure among individuals or
households within an economy deviates from a perfectly equal distribution. A
Lorenz curve plots the cumulative percentages of total income received against
the cumulative number of recipients, starting with the poorest individual or
household. The Gini index measures the area between the Lorenz curve and a
hypothetical line of absolute equality, expressed as a percentage of the
maximum area under the line. Thus a Gini index of 0 represents perfect equality,
while an index of 100 implies perfect inequality.”
http://data.worldbank.org/indicator/SI.POV.GINI
15
The P80/20 index is the ratio of the share in income of the highest to lowest
quintile. It measures the extent of inequality between the tails of the distribution
of income or consumption. The higher this ratio, the larger the share of the
country’s total income or consumption belonging to the richest quintile, compared
to the poorest quintile.
http://www.un.org/esa/sustdev/natlinfo/indicators/methodology_sheets/poverty/rat
io_quintile.pdf
16
Cingano, F. (2014), “Trends in Income Inequality and its Impact on Economic
Growth”, OECD Social, Employment and Migration Working Papers, No. 163,
OECD Publishing.
26
17
http://www.statista.com/statistics/240965/average-per-store-number-of-ftes-ofus-supermarkets/
18
http://www.nytimes.com/2015/05/13/nyregion/wegmans-to-open-at-brooklynnavy-yard.html?_r=0
19
https://intelligence.slice.com/best-buy-leads-retailers-with-massive-onlinegrowth-leading-into-the-2015-holiday-season/
20
http://www.mintel.com/press-centre/technology-press-centre/nearly-70-ofamericans-shop-online-regularly-with-close-to-50-taking-advantage-of-freeshipping
21
http://www.nytimes.com/2015/03/16/business/media/etsys-success-raisesproblems-of-credibility-and-scale.html
22
https://www.governor.ny.gov/news/governor-cuomo-announces-etsy-expandand-open-new-headquarters-brooklyn-creating-340-new-jobs
23
Fagerberg, J., Srhlec, M., and B. Verspagen “Innovation and Econoimc
Devleopment”, United Nations University, UNU-MERIT, Working Paper Series.
#2009-032.
24
2012 Greater Peoria Economic Scorecard: Tracking Economic Progress in
Peoria, Tazewell, Woodford, Marshall and Startk Counties.
25
Breitzman, A. “An Analysis of Small Business Patents by Industry and Firm
Size,” published by SBA Office of Advocacy, November 2008.
26
For example, Zoltan and Audretsch found that “large firms tend to have the
relative innovative advantage in industries which are capital-intensive,
concentrated, highly unionized, and produce differentiated products. The small
firms tend to have the relative advantage in industries which are highly
innovative, utilize a large component of skilled labor, and tend to be composed of
a relatively high proportion of large firms.” Zoltan, J., and B. Audretsch,
“Innovation, Market Structure, and Firm Size” The Review of Economics and
Statistics, November 1987, Vol. LXIX Number 4. Also, in an analysis of the
pharmaceutical and semiconductor industries, Kim Lee, and Marschke found that
patents per R&D dollar decline with firm size. Kim, J., Lee, S. J., and G.
Marschke, “Relation of Firm Size to R&D Productivity” June 2004.
27
Hansen J., Innovation, Firm Size, and Firm Age”, Small Business Economics,
Vol. 4, No.1, March 1992, pp. 37-44.
28
Huergo and Jaumanderu found that “entrant firms tend to present the highest
probability of innovation while the oldest firms tend to show lower innovative
probabilities. Some sets of firms with intermediate ages also present a high
probability of innovation” Huergo, E. and Jaumanderu, J. “How does Probability
of Innovation Change with Firm Age”? Small Business Economics, April 2004,
Volume 22, Issue 3-4, pp 193-207.
29
Natarajan Balasubramanian found that “firm age is negatively related to
technical quality, and this effect is greater in technologically active areas.”
Balasubramanian, N., “Firm age and Innovation”, Industrial and Corporate
Change, August 2008. Vol. 17, Issue 5, pp. 1019-1047.
30
http://www.forbes.com/sites/brianrashid/2016/01/26/the-rise-of-the-freelancereconomy/#2a33d022379a
31
http://www.fastcompany.com/3049532/the-future-of-work/heres-why-thefreelancer-economy-is-on-the-rise
32
Jody Greenstone Miller and Matt Miller, “The Rise of the Supertemp”, Harvard
Business Review, May 2012. Tammy Johns and Linda Gratton, “The Third Wave
of Virtual Work”, Harvard Business Review, February 2013.
33
http://krueger.princeton.edu/sites/default/files/akrueger/files/katz_krueger_cws_
-_march_29_20165.pdf
34
See https://hbr.org/2014/02/where-are-all-the-self-employed-workers/ and
http://www.bls.gov/spotlight/2016/self-employment-in-the-united-states/home.htm
35
http://krueger.princeton.edu/sites/default/files/akrueger/files/katz_krueger_cws__march_29_20165.pdf
36
Five-year data from the American Community Survey is used to increase the
reliability of the estimates.
37
Levine and Rubinstein, “Does Entrepreneurship Pay? The Michael
Bloombergs, the Hot Dog Vendors and the Returns to Self-Employment”, July
2013.
38
Levine and Rubinstein find, for example, that the incorporated self-employed
have a distinct combination of cognitive, non-cognitive, and family traits which
make them more successful as self-employed entrepreneurs. Also according to
the Pew Research Center, the incorporated self-employed are three times as
likely to employ others for pay (41% vs 13%), and also hired more workers, on
average, than the unincorporated (10.2 versus 5.6 workers).Furthermore, among
the incorporated self-employed, self-employment rates are highest for those with
a professional degree (12.2 percent) and for those with a doctoral degree (8.4
percent).
39
http://www.forbes.com/sites/robasghar/2014/11/11/study-millennials-are-thetrue-entrepreneur-generation/#72b5250c5e92
40
https://hbr.org/2012/05/the-rise-of-the-supertemp/
41
http://www.fastcompany.com/3049532/the-future-of-work/heres-why-thefreelancer-economy-is-on-the-rise
27