Rise in Violent Crime Threatens New York's Recovery

In the late 1980s, U.S. Athletics was a 13-store footwear chain bucking competition from big national retailers to carve a market for itself in New York City. It had the right styles at the right price and by the end of the decade was projecting $20 million in sales. What the chain lacked was a strategy to deal with New York’s exploding crime. In 1990, the company’s owner wrote to city officials complaining that its Manhattan stores had been held up at gunpoint 15 times in the past year, suffered 25 break-ins, and been victimized by 1,000 shoplifting incidents. He warned that he might have to shut down his city operations. It wasn’t an idle threat; the next year, U.S. Athletics closed its city retail operations.

U.S. Athletics wasn’t alone. New York businesses during the late eighties and early nineties suffered hundreds of millions of dollars from pilferage and had to invest billions more in extra security to fend off crime. Many gave up, and the result was shopping districts dotted with boarded-up, empty stores, and industrial areas with vacant warehouses. Crime was another reason that a city with other competitive disadvantages—including high taxes and heavy business regulation—struggled to create jobs during that era. Read Full Article »