A hipster’s paradise

In the late 1990s, a down-at-heel ’hood in New York’s Lower East Side became an enclave for rich whi

At the start of the great blackout of 14 August 2003, radio announcers in New York City recalled with apprehension the looting that had appalled the nation during the blackout of 1977. Darkness was falling again on the metropolis - now a post-Disney wonderland that had parlayed the white return and gentrification of the Nineties into a money boom that persisted, with falling crime rates and still-rising real-estate valuations. Had the stumbling block arrived at last? Fourteen hours later, after the sun rose over intact shops, the authorities were jubilant. The Brooklyn neighbourhoods of Crown Heights and Bushwick, where the worst trouble transpired a quarter of a century earlier, had stayed calm. No looting had occurred. Or almost no looting, certainly not enough to matter to anyone, not in Manhattan - really just one set of incidents that newspapers bothered to record and that was just something that happened to some Lower East Side hipsters.

The chief venue was a store called Alife, pronounced "A-Life", as if bestowing a superior grade on your existence. It called itself a brand and design consultancy but was known primarily as an unaffordable sneaker store, selling improbably expensive limited-edition Nikes or customised Chuck Taylors amid peculiar decor: trick bikes, motocross jackets, AstroTurf, graffiti paints. Alife had entered a neighbourhood that was Puerto Rican, black and Jewish, on a street known for its bargain leather goods and clothes - but, from 1999 onwards, it became the western pillar of a swiftly growing enclave of new people whom I never heard called anything other than "hipsters".

A little before 11pm on the first night of the 2003 blackout, a significant crowd began looting the stock. The owner arrived and hit people with a flashlight to disperse them; the mob struck back with bottles. This is, of course, a sneaker neighbourhood. What Alife had pioneered was the up-pricing, super-branding and remarketing of products more or less on sale right around the corner at the discount sneaker shops on Delancey Street, such as Jimmy Jazz and Richie's, serving a mostly black and Latino clientele - but Alife addressed a non-local or tourist market, trading on the novelty of an impoverished location still within the confines of Manhattan. No trouble was recorded at Jimmy Jazz or Richie's; a brick was thrown through the window of the Delancey Foot Locker and another Foot Locker was burgled in Brooklyn. At rich white people's sneaker destinations throughout the hipster archipelago in the Lower East Side, however, attacks and thefts were reported, the only notable crimes of the period of darkness.

My father's family had been living on Willett Street, on the Orthodox Jewish east side of the neighbourhood, continuously since the turn of the century, so I had a good vantage point on all this. My grandmother and father had been spinning stories of those streets for me since I was a kid. So I was attached to the old patterns of settlement. Throughout the period of the changes taking place on the opposite side of Delancey from my grandmother's apartment, I visited a few times a year for stays occasionally as long as a month. I gawked in the box of streets that made the epicentre for the new culture, bounded by Houston to the north, Delancey on the south, Clinton to the east and Orchard to the west. I went there first at an age when I still desperately cared what "the young people" were up to - and nearly all the people I saw then were older than me. I read hipster catalogues and flyers, visited their stores, chatted and took notes.

I'd never been so close to a neighbourhood "in transition". But I also hadn't seen a transition quite like this. I knew bohemia. It was very clear to me that the hipster neighbourhood was not bohemian; it wasn't artists. Artists were occasionally there - drinking coffee - but they were unusually thin on the ground. Instead of doing art, people everywhere were "doing" products. They displayed overpriced guitars, overpriced painted sneakers, lots of overpriced food and a huge quantity of overpriced clothes. These products were often displayed amid the decor and signifiers of art galleries or designers' hidden ateliers, but artistic production and art­ists' folkways were gone.

The hipster subculture was pro-consumer, amoral, pro-lifestyle. It credentialled itself as resistant because its pleasures were supposedly violent and transgressive and also what was then foolishly called "politically incorrect", such that the hipster's primary means of self-authentication were white hetero masculinity, gross high-school pranks and, primarily, pornography. What pretentious erotica had been to Sixties liberals, pretentious porn was to Noughties hipsters. Oh, and tattoos!

The thing I chafed at, mentally, was that the hipsters manifested not like a subculture, but like an ethnicity. It's hard to explain. Their structure of behaviour, what one can only call their "clannishness", plus the Lower East Side's hands-off treatment of the new hipsters - as individual blocks and then whole streets "turned" - seemed like consequences of new ethnic arrival. The uncanny thing about the early-period white hipsters is that symbolically, in their clothes, styles, music and attitudes, they seemed to announce that whiteness was flowing back into the inner city. When you think of the post-Second World War decades, you think of suburbanisation, "urban renewal" and "white flight", and the consequent defunding of the inner city. The reverse phenomenon in our own times - after decades in which upward mobility for the middle classes, including the black and minority middle classes, looked like it meant heading out to the suburbs - was that capital flowed back into the centre, especially the finance capital of neoliberal upward redistribution and the Nineties and Noughties Wall Street bubbles.

Unconsciously, the hipsters wore what they were: their bars dug up white Americana; "trucker hats", the gimme caps distributed as freebies at auto shows, were newly discovered for fashion; and belt buckles got Southern and big. By taking up the markers or feeling of a white ethnicity, the hipsters made it feel natural to engage in a subcultural separation or de-integration, rather than bohemian integration, as they colonised neighbourhoods that were, in one way or another, ethnic. Norman Mailer may have been foolish when he wrote, in "The White Negro" in 1957, of the white hipster freeing himself from white squareness by Negro sexiness and spontaneity. But at least he was a fool who clumsily championed the violation of racial and class boundaries.

You could feel the hipster culture of the late Nineties, in its aspect of an aggressive fetishisation of whiteness, coming to an end in 2003 - the sneaker-shop looting is a convenient symbol, but really it felt more like a loss of creative energy on the Lower East Side than a reaction from neighbours. Hipsters clearly persisted and regrouped, however, with different markers and habits, in similar neighbourhoods, and then in wider circles mediated by TV and the internet.

What happened to the Lower East Side was that bigger capital moved in. The core hipster area very quickly entered capitalism's replica phase whereby originals are destroyed or priced out of an area beloved for its authenticity, so that mainstream pastiches can be installed with wider appeal, higher prices and greater profit­ability. The hipster-coded kids I talk to now in cafés on the Lower East Side inform me they commute in from Bushwick or Bed-Stuy, to visit or jerk coffee in their "favourite place" that still reminds them of what they thought New York was going to be like when they arrived.

My hope is that, amid whatever sources of energy outside him or herself the hipster no doubt continues to draw upon and advance, the self-satisfaction with whiteness, at least, will have somehow diminished. If this consumerist culture of the hipster does survive and change, then even if it's still buying something, maybe it will buy something better.

Mark Greif is a founding editor of n+1. The book "What Was the Hipster? A Sociological Investigation" is published by the n+1 Foundation ($10)

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Q&A: What are tax credits and how do they work?

All you need to know about the government's plan to cut tax credits.

What are tax credits?

Tax credits are payments made regularly by the state into bank accounts to support families with children, or those who are in low-paid jobs. There are two types of tax credit: the working tax credit and the child tax credit.

What are they for?

To redistribute income to those less able to get by, or to provide for their children, on what they earn.

Are they similar to tax relief?

No. They don’t have much to do with tax. They’re more of a welfare thing. You don’t need to be a taxpayer to receive tax credits. It’s just that, unlike other benefits, they are based on the tax year and paid via the tax office.

Who is eligible?

Anyone aged over 16 (for child tax credits) and over 25 (for working tax credits) who normally lives in the UK can apply for them, depending on their income, the hours they work, whether they have a disability, and whether they pay for childcare.

What are their circumstances?

The more you earn, the less you are likely to receive. Single claimants must work at least 16 hours a week. Let’s take a full-time worker: if you work at least 30 hours a week, you are generally eligible for working tax credits if you earn less than £13,253 a year (if you’re single and don’t have children), or less than £18,023 (jointly as part of a couple without children but working at least 30 hours a week).

And for families?

A family with children and an income below about £32,200 can claim child tax credit. It used to be that the more children you have, the more you are eligible to receive – but George Osborne in his most recent Budget has limited child tax credit to two children.

How much money do you receive?

Again, this depends on your circumstances. The basic payment for a single claimant, or a joint claim by a couple, of working tax credits is £1,940 for the tax year. You can then receive extra, depending on your circumstances. For example, single parents can receive up to an additional £2,010, on top of the basic £1,940 payment; people who work more than 30 hours a week can receive up to an extra £810; and disabled workers up to £2,970. The average award of tax credit is £6,340 per year. Child tax credit claimants get £545 per year as a flat payment, plus £2,780 per child.

How many people claim tax credits?

About 4.5m people – the vast majority of these people (around 4m) have children.

How much does it cost the taxpayer?

The estimation is that they will cost the government £30bn in April 2015/16. That’s around 14 per cent of the £220bn welfare budget, which the Tories have pledged to cut by £12bn.

Who introduced this system?

New Labour. Gordon Brown, when he was Chancellor, developed tax credits in his first term. The system as we know it was established in April 2003.

Why did they do this?

To lift working people out of poverty, and to remove the disincentives to work believed to have been inculcated by welfare. The tax credit system made it more attractive for people depending on benefits to work, and gave those in low-paid jobs a helping hand.

Did it work?

Yes. Tax credits’ biggest achievement was lifting a record number of children out of poverty since the war. The proportion of children living below the poverty line fell from 35 per cent in 1998/9 to 19 per cent in 2012/13.

So what’s the problem?

Well, it’s a bit of a weird system in that it lets companies pay wages that are too low to live on without the state supplementing them. Many also criticise tax credits for allowing the minimum wage – also brought in by New Labour – to stagnate (ie. not keep up with the rate of inflation). David Cameron has called the system of taxing low earners and then handing them some money back via tax credits a “ridiculous merry-go-round”.

Then it’s a good thing to scrap them?

It would be fine if all those low earners and families struggling to get by would be given support in place of tax credits – a living wage, for example.

And that’s why the Tories are introducing a living wage...

That’s what they call it. But it’s not. The Chancellor announced in his most recent Budget a new minimum wage of £7.20 an hour for over-25s, rising to £9 by 2020. He called this the “national living wage” – it’s not, because the current living wage (which is calculated by the Living Wage Foundation, and currently non-compulsory) is already £9.15 in London and £7.85 in the rest of the country.

Will people be better off?

No. Quite the reverse. The IFS has said this slightly higher national minimum wage will not compensate working families who will be subjected to tax credit cuts; it is arithmetically impossible. The IFS director, Paul Johnson, commented: “Unequivocally, tax credit recipients in work will be made worse off by the measures in the Budget on average.” It has been calculated that 3.2m low-paid workers will have their pay packets cut by an average of £1,350 a year.

Could the government change its policy to avoid this?

The Prime Minister and his frontbenchers have been pretty stubborn about pushing on with the plan. In spite of criticism from all angles – the IFS, campaigners, Labour, The Sun – Cameron has ruled out a review of the policy in the Autumn Statement, which is on 25 November. But there is an alternative. The chair of parliament’s Work & Pensions Select Committee and Labour MP Frank Field has proposed what he calls a “cost neutral” tweak to the tax credit cuts.

How would this alternative work?

Currently, if your income is less than £6,420, you will receive the maximum amount of tax credits. That threshold is called the gross income threshold. Field wants to introduce a second gross income threshold of £13,100 (what you earn if you work 35 hours a week on minimum wage). Those earning a salary between those two thresholds would have their tax credits reduced at a slower rate on whatever they earn above £6,420 up to £13,100. The percentage of what you earn above the basic threshold that is deducted from your tax credits is called the taper rate, and it is currently at 41 per cent. In contrast to this plan, the Tories want to halve the income threshold to £3,850 a year and increase the taper rate to 48 per cent once you hit that threshold, which basically means you lose more tax credits, faster, the more you earn.

When will the tax credit cuts come in?

They will be imposed from April next year, barring a u-turn.

Anoosh Chakelian is deputy web editor at the New Statesman.