New York City’s recovery crashed into a pothole in July with a decline in jobs for the first time this year amid more displays of the disproportionate impact of the pandemic recession on Black and Latino workers.
Three major data points paint a worrisome picture for the city:
- New York lost 14,000 jobs in July, while the rest of the country saw its strongest employment growth in a year, numbers released Thursday by the state Labor Department show. The local unemployment rate declined slightly to 10.5% primarily because people stopped looking for work, rather than because they found jobs. The rate remains about double the national figure.
- The unemployment rate for Black workers is four percentage points higher than whites. For Latino workers, the gap is seven percentage points.
- Even college degrees haven’t seemed to help narrow the racial gap: Nearly 40% of college-educated Black and Latino residents are mired in low-wage occupations, compared to less than 17% of white and Asian New Yorkers. That’s according to a just-released report from the group Here to Here — underscoring the structural inequality that makes it difficult for workers of color to move up the economic ladder.
While local economic statistics can be volatile and July could be an aberration, the details of Thursday’s jobs report revealed weakness in key sectors of the city’s economy.
Another troubling sign: The July data was collected before the virus case rate began to rise, noted James Parrott, an economist at the Center for New York City Affairs at the New School.
“The report is surprisingly weak,” he said.
Meanwhile, the local outlook for August and September has worsened with back-to-the-office plans stalling and some unemployment insurance benefits expiring.
‘We Are Losing Jobs’
Leisure and hospitality jobs continued to rebound in July, with a gain of 12,500 overall and 5,000 in restaurants, although that was less than in previous months.
The crucial financial services and real estate category lost about 5,000 jobs in July and remains 25,000 positions below its pre-pandemic peak. Just this week, the financial services company State Street announced plans to close its Manhattan offices permanently, with some employees relocating and others working remotely, increasing concern about an exodus of such firms.
“The city and state government have been sending negative signals to business for several years about how little value they place on job creation, while other states have been extending the welcome mat to New York’s large employers,” said Kathryn Wylde, president of the Partnership for New York City. “It should come as no surprise that we are losing jobs.”
Transportation and warehouse jobs slipped by 8,000, possibly in response to the slowdown in online retail sales growth.
The normally stable health and education category also declined by almost 8,000 jobs with losses at private schools and universities.
“For the average worker, we are a long way from a full recovery,” Parrott said. “And given the earlier and steeper impact that COVID has had in New York City relative to the rest of the nation, a local labor market recovery is some distance down the road.”
It’s not just the unemployment rate that shows how weak the city’s recovery has become compared with the rest of the country. New York City remains almost 510,000 jobs below its pre-pandemic record — an 11% decline. That’s almost four times the 2.9% deficit for the country as a whole.
The city is also trailing the recovery elsewhere in the state. Sales tax collections statewide soared 21% in July compared with the same month a year ago, State Comptroller Thomas DiNapoli reported this week. The city’s increase: 14%.
The unemployment rate in the city for Black and Latino workers is above 12%, compared with a little over 9% for whites, according to Parrott’s research.
Underemployment, which includes those with part-time jobs who want to work full-time and those who have stopped looking for work, is almost 20% for Latino New Yorkers and more than 17% for Black residents — compared to 13% for whites living in the five boroughs.
Part of the problem, said Brooklyn Chamber of Commerce President Randy Peers, is that businesses owned by people of color have been hit hardest by the pandemic, and they tend to employ more diverse workforces. This shows the need for support — especially financial help — for minority-owned businesses, he added.
A Pipeline Push
The pandemic has only worsened what was already a chasm between workers of color and white workers that isn’t narrowed even by college degrees, according to a new study from Here to Here, a Bronx-based group that seeks to create a better employment pipeline for young New Yorkers of color.
Here to Here found that only 14% of locally born Black and Latino residents are in occupations that pay either middle or high wages although they make up half of the workforce.
Meanwhile, 40% of Black and Hispanic New Yorkers with college degrees work in low-wage occupations — more than twice the figure for whites.
“New York faces a labor market challenge that others don’t,” said Lazar Treschan, vice-president for policy and impact. “Most places have a problem with brain drain. We get so much talent from other places it is a challenge to compete with them.”
To deal with that issue, Here to Here is championing an educational overhaul in city schools and especially the City University of New York that emphasizes hands-on learning and internships.
‘A lot of companies want hands-on experience, even for internships.’
The group joins a growing chorus for reform from many organizations, like the Center for an Urban Future and the New York City Employment and Training Coalition, both of which are loudly calling for a revamp of the city’s workforce development programs to help New Yorkers of color compete for the thousands of tech jobs being created here.
“No college students have the hands-on skills to go into paying jobs,” said Gabe Forman of Duro UAS, a start-up company based in the South Bronx that is developing low-cost autonomous monitoring systems for water. “A lot of companies want hands-on experience, even for internships.”
Forman has created a separate workforce unit that has helped 300 students go through programs that give them internships and skills to win higher paying jobs.
All five of his engineers joined the company after internships with Duro. His company is also part of Here to Here’s Pathways to Prosperity NYC, an organization trying to build public support for job training reforms.
Another member of Pathways, the Bronx-based Montefiore Health System, has created a series of programs to push students into higher paying jobs in health care.
One program, called Invest, offers paid internships, career counseling and help with everything from child care to clothing needs. Funded by City Council grants, all nine participants since 2018 have landed jobs in the system.
Watching Vaccine Impact
Francis Catalino-Rosario, a Hostos Community College student who has interned at Montefiore Medical Center since she was in high school, is working on the customer service desk this summer.
“I’m the first person you see when you come to the hospital,” she said.
The internships have helped her financially with college and given her crucial experience, the 19-year-old added.
“When I was in high school I wanted to be a doctor, but the internships have convinced me I am a people person and I hope to become a registered nurse,” she said.
In the meantime, one key to the near-term future may depend on the success of Mayor Bill de Blasio’s rule that only vaccinated people can enter restaurants, stores, museums and other indoor spaces.
“We’re still more than 100,000 jobs short of pre-pandemic levels in the industry,” notes Andrew Rigie, executive director of the New York Hospitality Alliance. “I’m waiting to see what, if any, meaningful impact the new vaccine requirement for restaurant workers and indoor dining will have on employment since you can argue that some people may return to work because they feel safer.”
At the same time, the previously expected surge of workers returning to their offices after Labor Day is likely to be delayed until later in the fall. And the expiration of some unemployment benefits in early September could mean $500 million less flowing into the city every week.
“August is not looking good,” Parrott warned.