New York City’s recovery from the pandemic recession came to a screeching halt over the summer as private sector jobs declined and the city’s unemployment rate remained stuck at twice the national average.
The outlook for the fall also remains cloudy as the end of special pandemic benefits costs jobless residents a total of almost $500 million a week, worries about the Delta variant curtails the return of office workers, and a nearly four-month wait for a new mayoral administration adds to the uncertainty.
“It’s not a bright picture,” said James Parrott, an economist at the New School who is closely tracking the city’s economy.
The modicum of good news in the monthly report centered on public sector employment, which surged in July and now is above a record 600,000. Television and movie production also proved a bright spot, with payrolls shooting up almost 50% since the start of the year as New York continues to be an in-demand location for everything from traditional networks to booming streaming services like Netflix.
Meanwhile, new research from CUNY’s School of Labor and Union Studies shows that the city’s strong public sector unions were able to protect their members — especially women — from the fallout that affected women across the country.
But the city remains 470,000 jobs shy of its pre-pandemic peak, meaning it has recovered less than half the jobs lost while the rest of the country has regained 90% of those positions.
The city’s jobless rate ticked down to 10.2% in August from 10.5% in July — only because New Yorkers are no longer looking for work: Since April, the city’s labor force has dropped by 118,000 people, with the participation rate falling to 60.7% from 62.2%.
Worse, two out of three unemployed New Yorkers have been without jobs for six months and almost a quarter have been out of work for a year. People who are unemployed that long tend to face great difficulty in finding a job, experts say.
Also, in a sharp reversal of the situation before the pandemic, the rest of the state is outperforming the city.
Hiring Challenges Remain
Local government sales tax collections in August were 15.5% higher than they were during the same period in 2020, New York State Comptroller Thomas DiNapoli reported this week. New York City’s sales tax haul only increased by a little less than 8%.
The restaurant industry saw its smallest monthly increase in jobs so far this year last month. It isn’t clear whether the end of the special unemployment benefits, which could have brought an individual’s payout in New York to as high as $700 a week, will help the industry to boost employment.
“Restaurateurs are telling me they’re still operating understaffed,” said Andrew Rigie, executive director the NYC Hospitality Alliance. “Here and there people have come back because the additional unemployment ended, but managers are still having hiring challenges.”
‘Restaurateurs are telling me they’re still operating understaffed.’
Economists who have studied Republican-run states that ended the extra benefits earlier this summer did not see any major jump in people looking for work.
Parrott and others are worried the loss of the additional unemployment benefits will have adverse impacts on consumer spending and on those out of work.
Moreover, despite the expanded benefits and the gains in the economy since the recovery began, the number of New York City residents qualifying for Medicaid health care benefits as of June topped 4 million — the highest number since the pandemic began.
And the number of New Yorkers receiving Supplemental Nutrition Assistance Program assistance, also known as food stamps, has grown to 1.7 million — again, a peak since the pandemic began.
Hopes Pinned on Adams
One key to the recovery will be whether City Hall can inspire confidence in the city’s future in the business community.
In an effort to send a signal about his views, Democratic mayoral nominee Eric Adams said earlier this week that he planned a radical reorientation of the attitude at City Hall.
“New York will no longer be anti-business,” he told a Manhattan business conference. “This is going to be a place where we welcome business and not turn into the dysfunctional city that we have been for so many years.”
Business leaders are looking forward to a change, said Don Winter, chair of the Manhattan Chamber of Commerce, who called the mayoral frontrunner’s comments “encouraging.”
“He is focused on improving how education and workforce development programs prepare residents for jobs and giving employers a much bigger role in advising what the requirements are for employment and upward mobility,” said Kathy Wylde, CEO of the Partnership for New York City.
“He is also committed to remove barriers that the government bureaucracy puts in the way of business formation, job creation and real estate development.”
Adams, who is widely expected to win the November election against Republican Curtis Silwa, declined repeated requests from THE CITY for an interview about his views on the city’s struggling economy.
Unions Prove Strong
If elected, Adams will oversee a municipal workforce of 300,000 — much of which has bucked national employment trends.
New York’s robust and heavily unionized government sector has helped insulate many members — primarily women — from the economic consequences of the pandemic. That wasn’t the case in the rest of the nation where women fared far worse in what some call a “shecession” that’s hit mothers and women of color hardest.
Only 3% of women who belonged to unions in the New York City area lost their jobs since the economic shutdown in 2020, according to the latest State of the Unions report issued earlier this month by the CUNY institute. That compares to 12% for men who are union members.
Women account for a disproportionate percentage of public sector workers in the city, especially in education where they hold about three-quarters of all jobs.
“Union membership paid off for women in New York,” said Ruth Milkman, an author of the report. “Unions were very active in the schools aggressively negotiating with the city and state on how to handle all this.”
The United Federation of Teachers’ strategy was simple amid the chaos of March 2020 when schools were suddenly shut and remote learning was instituted without any preparation after Mayor Bill de Blasio had insisted the schools would remain open.
“We knew making sure teaching was regarded as an essential service would be a key piece,” said UFT President Michael Mulgrew in an interview with THE CITY. “We knew our children were going to have all kinds of anxieties and the connection with teachers was crucial.”
While other states laid off education workers or used fewer teachers to teach more students online, the UFT defended its members aggressively. And, Mulgrew says, his members remain committed to their jobs.
“During the last two weeks of August we asked for volunteers to create teams to keep each school safe,” he said. “We got thousands of volunteers and we were able to set up a team for every school.”