THE BLOG
12/09/2013 04:10 pm ET Updated Feb 08, 2014

The Limits of Mayoral Philanthropy

The biggest change coming to New York City has nothing to do with the fact that Mike Bloomberg ran city government like a corporate CEO. It has to do with his running the city's economic mobility agenda like a philanthropist.

Over twelve years as mayor, Mayor Bloomberg favored individual, often market-based (and occasionally idiosyncratic) experiments to combat specific aspects of economic stagnation for a relative few, while disdaining using the levers of government policymaking to broadly expand economic mobility and lower our staggering cost of living. The result speaks for itself: the City's middle class contracted rather than expanded, and voters chose a new mayor and city council determined to try a different approach.

Mike Bloomberg the private philanthropist gives staggering sums of money to a wide variety of causes, including $370 million last year alone. His personal generosity might be unrivaled in American history. As mayor, he channeled this remarkable philanthropic mindset into a variety of government programs; many leveraging private funding. Among them were programs to subsidize wages to provide work experience for over six hundred low-income young adults; match tax refund deposits made by several thousand low-wage New Yorkers into their savings accounts; and give cash grants averaging $8,700 over three years to approximately 2,400 families as rewards for going to the doctor for preventive care, attending school regularly and maintaining a full-time job.

But he opposed broad-based legislation to level the economic playing field for the middle class and its aspirants, such as giving employees the job security that comes with a modest amount of paid sick leave; requiring development projects receiving significant taxpayer subsidies to pay a living wage; providing prevailing wages to private-sector building service workers in City-leased property and to those working on the construction of affordable housing; and ending corporate subsidies and reforming a tax structure that disadvantage small businesses and working people.

The idea of enacting government policy to accomplish important social objectives is neither alien nor anathema to the mayor. Consider his extraordinarily successful approach to improving public health. Mike Bloomberg didn't merely initiate targeted programs among some residents to raise awareness about the importance of counting calories, incentivize restaurants to reduce artificial trans fatty acids or pay cash to people who reduce their second-hand smoke output. He legally required fast-food chains to post calorie counts, banned trans fats in restaurants and made it illegal to smoke at the City's parks and beaches.

Many of mayor Bloomberg's boutique economic programs worked for the individuals involved, and some didn't. It showed tremendous political courage and wherewithal to initiate them at all. But there was little wider impact. Middle class New Yorkers have continued their grasping downward slide against the affordability slope, and poverty and its hallmarks -- such as homelessness and food pantry use -- have gone up.

In other words, the evidence is overwhelming that the philanthropist-mayor's approach to helping New York's vast, overwhelmed middle class and its chronically poor has been unsuccessful.

Indeed, even staunch defenders of mayor Bloomberg's anti-poverty record, such as University of Pennsylvania professor Michael B. Katz, acknowledge that this approach "has tested the limits of human-capital and market-based strategies."

A mayor -- the government -- has to have a more comprehensive strategy for bolstering the middle class and growing its ranks than fifty discrete philanthropic experiments.

That's why so many in New York City's incoming government built their successful campaigns around government action to improve economic security and mobility -- to raise people out of low-wage jobs, eliminate tax advantages and subsidies that are unfair to middle class New Yorkers and small businesses alike, and lower the cost of living by investing in mass transit, higher education and green energy. This includes deploying City policy on behalf of workers in the retail, fast food, car wash and other low-wage industries trying to organize and collectively bargain for better working conditions; setting wage and benefit standards for companies that take taxpayer subsidies; and adjusting the City's mix of income, property and sales taxes so that the greatest combined tax burden no longer falls on those making from $68,000 to $159,000 a year -- the middle class sweet spot.

This is the real change that's coming to New York -- replacing an economic mobility agenda rooted in philanthropic notions of behavioral modification with a progressive model rooted in using government policy to broadly expand economic opportunity from the middle on down. After decades of piecemeal policy choices on meat-and-potato economic issues here and in the rest of the country, the City's incoming government has a chance to throw drowning middle class New Yorkers a legislatively driven lifesaver. If it succeeds, that is surely something the the rest of urban America will want to emulate.