New York in the 1980s

In the early 1980s New York was a city in transition. The devastating fiscal crisis of the 1970s—and an economy spiraling from years of business exodus, population loss, and general disinvestment—had left the city scarred. Crime, urban decay, and homelessness were all rampant.

At the same time, a turnaround was beginning. A new mayor, Edward I. Koch, balanced the budget; began to rebuild housing, parks, and the arts; and encouraged business development. These gains were not without cost. Spending cuts impacted communities and sparked protests from municipal workers; the pro-business climate brought prosperity for some while leaving others behind; and there were complaints that the efforts to “clean up” the city were also robbing New York of its character.

Still, there was plenty of character to be found, and in the early part of the decade the mix of recovery and local grit provided the preconditions for a surge in musical creativity. A new influx of immigrants to the city brought vibrant diversity to the emerging scene. Still-low rents in areas like Harlem, the South Bronx, and the Lower East Side enabled space for musical experimentation, while the reviving economy helped to provide artists the means to support themselves.
 

Koch vs Youth Culture

Part of Mayor Koch’s effort to turn the city around focused on what he saw as the deteriorating quality of urban life. One of his first priorities upon election was cleaning up subway graffiti, which he associated with both urban blight and hip-hop culture. He outfitted train yards with barbed wire and guard dogs to keep graffiti writers out. Later, Koch would begin to enforce the city’s cabaret laws, which required special licensing to permit dancing in a club, to clamp down on the proliferating night life.

Ironically, the very scene that Koch was attacking was also making the city a cultural destination. Graffiti artists were beginning to show their work in galleries as collectors like Martin Wong recognized the artistry of their work, and the countercultural music vibe at the city’s many clubs was gaining an international reputation. For a time, the city’s efforts to tamp down the scene gave artists a challenge to rally against.
 

Real Estate Squeeze

In the 1970s, SoHo had been a center of creativity that had propelled both the visual arts and the punk and disco scenes that had flourished in that era. In 1973, the Loft Law was enacted to protect artists living in manufacturing buildings, like those that filled this neighborhood. By the early 1980s, however, SoHo was becoming trendier and more expensive, and emerging artists and musicians found the rent increasingly unaffordable. As retail began to move in to SoHo, many of these artists began to relocate to the more affordable Lower East Side, which in turn became a new locus for musical and artistic experimentation.

How'm I Doin'

During his three-term mayoralty (1978–1989), Ed Koch, with his signature New York bluntness and chutzpah, helped to turn the city’s fortunes around. Although he was a lifelong Democrat, Koch’s fiscal policy and business-friendly politics meshed well with those of incoming U.S. President Ronald Reagan, who publicly recognized the Koch administration
as a model for American cities. Koch is credited with providing a boost to New York’s white-collar sectors during his time in office, and for reviving the spirit of demoralized New Yorkers with his energy and in-your-face attitude.

Such gains were felt unequally, however. Disinvestment from public services put many New Yorkers out of work and made it difficult for many more to find jobs. Responding to the cuts, transit workers went on strike in 1980, shutting down the New York City Transit Authority for the first time since 1966. This revitalized labor movement continued into 1981, when a Labor Day march of over 200,000 gathered to protest the new Reagan administration’s fiscal policies.

Wall Street Comes Back

Before their spectacular crash in 1987, Wall Street markets soared in the early part of the decade. From 1981 to 1986, Manhattan also saw nearly 45 million square feet of new commercial real estate built in a boom that perhaps no one better represented than magnate Donald Trump, whose glitzy, gilded buildings (always with his name prominently displayed) embodied the era. The concurrent boom in employment and profits in fields like financial services and real estate gave the decade its reputation as the “go-go ’80s,” a period that novelist Tom Wolfe immortalized in The Bonfire of the Vanities.

Unlike in prior decades in which job growth was fueled by manufacturing, the new jobs that materialized in the early ’80s were in financial services and the broader service sector, including law, accounting, management, and computers. This economic reinvention reverberated globally, as white-collar opportunities attracted a diverse talent pool to the city. But despite this service-sector growth, the city’s overall unemployment remained high, and employment would not reach 1960s levels again until the 1990s.