New York City’s stunning economic development progress in recent years coexists with severe poverty and with the

chronic disconnection of thousands of residents from the formal economy. While local government is constrained in trying to address inequalities arising in part from large-scale economic restructuring (Peterson 1981), policy in recent decades has been characterized by a lack of motivation to use the tools that are available, as well as the continued use of fiscally unsound subsidy practices and frequent disregard for neighborhood-based businesses. This paper, written as part of a suite of policy briefs meant to inform the 2013 New York City Mayor campaign and the administration coming into office in 2014, reviews the recent history of economic development policy in New York City and suggests four new “growth with equity” strategies:

Replace discretionary and as-of-right subsidies to firms with investments designed tostimulate labor demand, including investment in public infrastructure;

Use available public levers, including standards attached to economic development subsidies, to increase training, earning, and economic mobility opportunities for unemployed and low-wage workers, and connect them with the economic development agenda;

Strengthen the city's core blue-collar employment base by bringing a deliberate equity vision to the management of the city’s physical assets, especially industrial land; and

Activate a career pathways system that links secondary schooling both with post-secondary education and training and with the labor market.