Photo by: Taleen Desderpanian

The commercial district around the Fulton-Nostrand intersection features several discount stores that, some locals say, limit the area’s potential. But would swankier shops serve local residents, let alone employ them?

Three years into the Great Recession, and the dramatic rise in unemployment that began in 2008 shows little sign of abating. While the unemployment rate has eased slightly in recent weeks, much of that is the result of jobless who’ve given up even searching for work. In New York City, meanwhile, the employment news is not promising: The city’s jobless rate of 9.0 percent is unchanged from last year, now ranking higher than the national rate, and more than double what it was at the end of 2006. And the pain is not shared equally among the boroughs: Where relatively few Manhattanites are seeking work, in patches of the outer boroughs unemployment rates are well into the double digits.

The neighborhood that’s seen the greatest jump in unemployment since the onset of the Great Recession, according to figures compiled by the Fiscal Policy Institute, is central Brooklyn, an irregularly shaped polygon that includes most of Bedford-Stuyvesant and the northern slice of Crown Heights. Since 2008, when Lehman Brothers and Bear Stearns were still considered stalwart city employers, the unemployment rate in central Brooklyn has leapt from 6.0 percent to 15.3 percent, outpacing even the South Bronx.

One obvious question, it would seem, is why businesses in a gentrifying neighborhood like Bedford-Stuyvesant aren’t hiring the local unemployed, and what can be done to change that. But as with everything involving the tangled economics of job creation, it turns out that the answers are more complicated than they at first appear.

Bedford-Stuyvesant has been the hub of Brooklyn’s African-American community since the 1930s, and a shorthand for urban decline at least since Billy Joel declared walking there alone to be a sign of insanity in 1980. In reality, it’s always been a mix: blocks of stately 19th-century brownstones (familiar to anyone who’s seen “Do The Right Thing”) shading into more rundown tenements, all housing a mix of middle-class, working-class, and poor families, mostly black.

Bedford Avenue and Stuyvesant Street may have given the area its name, but much of its identity comes from two shopping strips: Fulton Street, which runs the length of the neighborhood from east to west, and Nostrand Avenue, ground zero for Brooklyn’s proliferation of roti shops.

Ask shopkeepers near the junction of Nostrand and Fulton how business is since the onset of recession, and you get a lot of frowns and sadly shaken heads. “The foot traffic is okay – not like it used to be,” says Adam Ibrahim, whose Stacy Adams fashion clothing stores stretch across three storefronts near the intersection. The boom years, he says, came in the 1990s, or as he calls it, “Clinton time”: “If you don’t make money in Clinton time, you’re not going to make money.” Now he relies mostly on two major city agencies that place orders with him, supplemented by the occasional European tourist.

“It has been a big change,” agrees Tisha Glover, manager of the Danice discount clothing store on Fulton just west of Nostrand. “There’s nobody coming in – it’s really quiet.” The problem, she says, is that so many of her usual customers are out of work. “It’s right now a lot of unemployment here in just this neighborhood. It’s making business bad, even at our prices.”

Business is “okay,” says Rimma Ammirati, manager of a family-owned hardware store on Fulton. Yet she finds hope in the new faces she increasingly sees on the streets, and in her store, as young people – mostly white — increasingly move into the stretch of western Bed-Stuy that borders already-gentrified Clinton Hill. “I call them urban pioneers,” says Ammirati. “Honestly, I have to say it’s good for the neighborhood. We’re having a lot of cafes popping up. We have a little winery on Nostrand Avenue. We have Applebee’s.” One sign of the changing times, she says: “The other day we had a Zuccotti Park protestor in here!”

Yet other shopkeepers say the influx of new residents doesn’t necessarily benefit them. “The new that comes in the neighborhood don’t shop at stores like this — it’s more the bigger Macy’s, Bloomingdales stores,” says Glover.

One sign of progress, Ibrahim says, is the number of 24-hour stores that have opened on the commercial strip, helping keep the streets active at night. Yet the underlying problem, longtime retailers say, remains that there’s not enough money out there in the neighborhood: Unemployment, they say, begets more unemployment. During Clinton time, says Ibrahim, he employed separate managers at his three stores; now, he’s forced to run them all himself, and has ramped down his own staffing dramatically as unemployment has increased among his customers. “If two or three customers come in, spend the money, that could be a chance for some person to work for us,” he says. “If you fire some people, I’m going to fire some person here.”

Doug Jones, the head of the Bedford-Stuyvesant BID, is having none of it. A former city Economic Development Corporation staffer and Hunter College administrator, Jones says that Bed-Stuy’s problem isn’t too little spending money; it’s too little money being spent in Bed-Stuy.

“There’s about $785 million of retail leakage in Bedford-Stuyvesant,” he says. “People in the neighborhood leaving the neighborhood to spend their money.” The fastest-growing income segment in the neighborhood, he notes, is households earning $100,000 or more a year. “They drive to south Brooklyn or they drive to somewhere in Long Island or go up I-87 somewhere, and they take their dollars with them.”

Bed-Stuy’s problem, insists Jones, is that its traditional mix of low-end retail stores — something that dates to the days when Fulton Street was a bustling strip of street vendors, before a Giuliani-era crackdown that cleared the streets and herded them into a single market far to the east on Albany Street — doesn’t appeal to the neighborhood’s new clientele. “You have a preponderance of 99-cent stores and nail shops and hair salons,” he says. One hardware store, he notes, has an excellent selection that should be able to compete with the likes of the new Home Depot that opened recently on DeKalb and Nostrand, but still turns off potential customers by having card tables full of hand creams stacked out front. (“This is a class conversation,” he acknowledges.)

Instead, Jones insists, what he calls the “BMW and Range Rover crowd” patronize restaurant strips elsewhere, such as along Park Slope’s 5th Avenue. “A lot of those people over there are coming from over here — I’m one of them,” he says. “Four people, do the math — that’s 60 bucks at least, times four. Why should that money be leaving Bed-Stuy? That money should be right here.”

Shopkeepers Glover and Ibrahim acknowledge that the glut of discount clothing stores will have to change if they want to appeal to a new customer base. But while that would make for easy shopping for those more affluent locals, it’s not clear how much it would do for their out-of-work neighbors.

On DeKalb Avenue just west of Bedford, around the corner from a juice bar whose awning promises “Brooklyn Chillaxin,” the talk likewise turns to keeping money in the neighborhood, but with a different twist. This is the site of the city-run DeKalb Job Center, where every day people queue up to apply for a wide array of government programs. On most days, the line spills out into the street, as the Human Resources Administration’s staff is unable to keep up with the influx of applicants.

Asked about the job situation in Bed-Stuy, Melissa Gomes’ eyebrows shoot up. “There are jobs in Bed-Stuy?” she asks sarcastically. “We need some more major stores,” chimes in her line-mate Kisha Marshall. “And more people that’s willing to hire some of the community.” That, both women agree, is the real problem: the lack of local hiring.

“There’s really no businesses anywhere in the Bedford-Stuyvesant area,” says Marshall, a child-care worker waiting to apply for child-care subsidies so she can have someone to watch her own three kids while she earns a paycheck. “And the businesses here are like mom and pop businesses that hire their own family.”

It’s a similar problem with the firms racing to renovate local brownstones and erect new infill housing to meet the demands of gentrification, says Gomes. “All these landlords are now making tons of money, but they’re not hiring from the neighborhood. They’re hiring day laborers from the other side of town and busing them in.” Gomes knows this because she’s a realtor; she’s on line to apply for a one-shot loan to help pay back rent, as she’s fallen behind in her payments while off her feet dealing with a high-risk pregnancy. “It’s tough — I can’t sit at a desk and get sick time.”

“If they want to come into the area and make money off the community, they should agree to hire from the community,” says Marshall. “That’s the way to get back, know what I mean?”

It’s a point that Jones is quick to agree with, as far as the neighborhood’s traditional store owners go, in any case. Three-quarters of the local business owners aren’t from the neighborhood, he estimates, and because they’re family-owned and operated, most of their employees aren’t, either.

In fact, relatively few Bed-Stuy residents have ever worked locally, even during the boom times. According to a U.S. Census tool that charts jobs by geographic location of both workplace and the residence of the employee, nearly half of all Bed-Stuy residents with jobs work in Manhattan. The next-largest share hops the A and C trains each day for the short commute into downtown Brooklyn, with health care and education positions topping the job list. In fact, fully 88 percent of those who work in Bed-Stuy don’t live there, and 97 percent of employed residents commute to elsewhere in the city. This is especially true for those employed in areas like the financial sector, which fell by more than a quarter in 2009 alone, shedding more than 1,000 employees living in Bed-Stuy.

It’s not an unusual pattern for outer-borough neighborhoods — the respective numbers for Park Slope, for example, are 91 percent and 95 percent — but it does limit the potential impact of local businesses on local unemployment figures. It’s a sobering counterargument to the much heralded import of local stores as engines of economic growth: Small businesses may create two-thirds of all new jobs as their boosters claim, but those jobs largely don’t go to those living on the blocks nearby.

Jako Borren, who runs employment services at the mammoth multi-service agency Restoration Plaza (also host of the Bed-Stuy BID), says that in the past, most people looking for services lacked high-school diplomas and were seeking entry-level positions. “Now, more and more we also see people coming in with high school diplomas, college degrees,” he says, often those who’ve ridden out the initial years of the economic downturn with help from savings and unemployment benefits, but have now exhausted those. “People come in here, they have lost jobs in the financial industry — it’s not only the mom and pop stores and the local businesses. It’s really hard to pinpoint.”

In fact, says Borren, retail is one field where he’s been able to place job-seekers — along with medical services, which appears to be recession-proof so long as spending on health care continues to rise. “If retail is hiring again, people are obviously starting to buy again.”

Whether they’re buying locally is a knottier question. The study Jones cites as proving spending leakage out of Bed-Stuy was conducted in 2008 by the Local Initiatives Support Corporation, a major neighborhood development consultant run by Koch-era New York City Department of Employment assistant commissioner Michael Rubinger.

The study notes more middle-income residents coming to Bed-Stuy, and that the neighborhood has more spending power per square mile than Brooklyn or Queens as a whole — not surprising, given that it’s densely packed with row houses and apartment buildings.

As for spending leakage out of the neighborhood — what the LISC study calls the “float” — it estimates more than $30 million a year in spending in other locales on food service, nearly $20 million on grocery items, and $26 million on general merchandise.

It’s mum, though, on why residents are spending money in other parts of the city. If most Brooklynites are working in Manhattan, that would certainly explain much of the leakage in restaurant spending. And the general merchandise leakage all but disappears, the study notes, when the study area is expanded to a 1.5-mile radius, implying that many Bed-Stuy residents are doing their shopping on the Fulton Mall in downtown Brooklyn — the zip code that, according to the Census data, employs the greatest number of Bed-Stuy residents.

In other words, the bulk of central Brooklyn residents may well shop where they work. It’s just not in central Brooklyn.

Determining what will help Bed-Stuy, then, depends in large part on how you define “Bed-Stuy.” Gentrifiers can make for a more bustling streetscape, but no amount of wineries is likely to make a significant dent in local unemployment — and in any event, many of the current residents and store owners will likely be displaced by rising rents by the time any gentrification-driven changes fully kick in.

If anything, it appears that the causation runs the opposite way: Without more jobs in the greater city—created when the private sector starts hiring or saved when the public sector stops slashing budgets and payroll— neighborhoods like Bed-Stuy will continue to suffer.

And that, in turn, is what’s keeping many Fulton Street business operators up at night. “The only thing I know that will help is more money coming in,” says Glover. “If at the end of the week we make an extra $1600, that’s one more person on our payroll.

Or as Ibrahim, when asked what government can do to help his business, puts it more succinctly: “Stop firing people.”