Big Business Leaving New York City

Press, Volume CVI, Issue 31320, 16 March 1967, Page 28

Big Business Leaving New York City

(N.Z.P. A.-Reuter) NEW YORK. Big business is steadily leaving New York. Corporations employing thousands of workers and contributing millions of dollars in taxes to the city’s

coffers are moving to the suburbs, and even further afield, in spite of pleas that they stay. Among the latest to join the exodus is Pepsico Inc., which bottles Pepsicola. The giant firm has announced that it is leaving New York for nearby Purchase as soon as it can build a factory there. Many other firms have announced their intention of following its example. Not long ago, firms such as International Business Machines, American Cynamid, Curtiss Wright, Mack Trucks and Tidewater Oil took the trail west and north to New Jersey and upstate New York.

In almost every case, company officials blame high taxes, labour shortages and the slow strangulation of the city for thus driving away business. Managements claim that they are moving to escape the city’s income and sales taxes, to benefit from available local pools of whitecollar workers, including young wives with degrees, and to minimise the companies’ contacts with unions. But that is only part of the story. Many workers are eager to leave the city, which has one of the country’s worst air pollution problems, and to escape the underground railway system which was officially described recently as “the most squalid public environment in the United States.”

They also want to avoid the misery of getting to work, for example, during a winter snowstorm.

In nearby Westchester County, the latest tabulation by officials shows that in the last two years 155 moderatesze and large companies have completed or expanded buildings there. Most of these cor-po-ations were formerly in New York City. Employees, say company officials, want the opportunity to live within easy driving distance of their jobs, with homes near good schools and playgrounds, country clubs, beaches and yacht basins. Young women, married or single, will take jobs near their homes at a lower wage rather than face commuting into the city. Companies already established in Westchester County say that their annual employee turn-over is less than half what it was in New York City. Some of the unions now play no part in their staff problems. > International Business Machines and the Readers’ Digest have a total of 10,000 non-union employees in the county. “We treat them all so well, giving them more than the unions could hope for, that they reject all suggestions to organise,” said the spokesman fu. one firm. New York’s Mayor, Mr John Lindsay, and his civic leaders, disturbed at the loss of revenue, have been trying to persuade the big companies not to leave the city. The president of the New York Public Development Corporation, Dr. Donald Shaughnessy, has declared hopefully that the exodus of

the big corporations will have more psychological effect than economic impact on the city. “The effect on the tax base will be negligible, and their going will be quickly offset by the arrival of other large companies, whom we expect in the near future,” he said. The loss of a company means a loss in corporate taxes as well as the income tax paid by employees who also leave. The New York Economic Development Council has estimated that each job held in the city means an average of 1000 dollars a year in city tax.

People living in New York are saddled with three taxes —Federal, state and city. One of the big reasons the Mayor imposed a city income tax is the big increase in the number of city dwellers now on welfare relief. Ten years ago, the figure was 8.9 per cent. Today, it is 17.6 per cent.