It’s not just a New York City problem; pandemic job losses in the rest of New York State also far surpass national averages.
The employment rebound stalled again over the summer after steady gains from January through May. This was true for the U.S. overall, and for New York City and other areas within New York State. Whereas the rollout of the vaccine this past spring initially provided reason for optimism regarding a sustained recovery, significant vaccine hesitation coupled with the spread of the Delta variant combined to push up infection rates across the country beginning in mid-summer. As we saw initially last fall and early winter when the 2nd Covid-19 wave swept the country, rising case rates can quickly bring the jobs recovery to a halt. Consumers become more cautious about entering public spaces, corporations allow remote working to continue, and businesses limit their hiring. Not surprisingly, some workers also express hesitancy about returning to work because of personal or family health concerns.
While New York City accounts for a lot of New York State’s pandemic job losses, other regions within the state – the Downstate suburbs, the Upstate metro areas, and the Upstate non-metro areas – have also suffered steeper-than-national average job losses and experienced less of a rebound than other parts of the nation. While New York City’s job losses are three times the
Figure 1
Source: BLS, seasonally adjusted total nonagricultural establishment employment.
national average, the suburbs and the Upstate non-metro areas have been hit more than twice as hard, and the Upstate metro areas nearly twice as hard as the nation overall.
As Figure 2 indicates, all parts of New York except the Upstate non-metro areas suffered steeper job losses during the first two months of the pandemic than did the nation as a whole. And except for New York City, most regions within the Empire State saw faster job rebounds in the first six months of recovery (April-October of 2020). However, in the ensuing 10 months from October 2020 through August 2021, job growth in the New York City suburbs was only 1.0 percent and 2.6 percent in the Upstate metro areas, slower than the 3.3 percent pace of job growth in the nation overall or New York City’s 3.4 percent growth. On net over those 10 months, the Upstate non-metro areas actually lost employment (-1.2 percent).
Figure 2
Source: BLS, seasonally adjusted total nonagricultural establishment employment.
As of August of this year, New York State had regained since April 2020 only 56 percent of the jobs lost during the first two months of steep pandemic-related job declines. In comparison, the nation overall has regained 76 percent. The Upstate metro areas as a group have fared better in recovering 67 percent of job losses than have the Downstate suburbs (62 percent recovered), New York City (48 percent recovered), or the Upstate non-metro areas (only 43 percent recovered).
Among Upstate metro areas, Rochester and Buffalo have fared better than the others, with moderate job gains over the past 10 months and rebounds that are close to the national average. Still, Rochester has nearly 26,000 fewer jobs than before the pandemic, and Buffalo’s job count is 34,500 smaller. The Downstate suburbs have 182,000 fewer jobs than in February 2020. Those employment losses are all much worse than during the 2008-09 Great Recession.
As of August, New York State still had a pandemic jobs deficit of 875,000 fewer jobs than in February 2020. That represents one out of every six jobs lost to the pandemic in the United States as a whole. New York’s 16.4 percent share of the nation’s pandemic job loss is 2.5 times as great as the state’s 6.4 percent share of the nation’s jobs prior to the pandemic.
This disparity underscores the urgency for Albany leaders to act expeditiously to address New York’s much more serious unemployment crisis. Over 1.6 million state residents lost access to unemployment assistance when Federal benefits expired earlier this month. The loss of the Federal unemployment benefits will mean billions of dollars in reduced consumer spending each month, further weakening an already-sluggish recovery. Hundreds of thousands of New Yorkers are facing a particularly bleak employment outlook for several more months. It would be enormously expensive for New York to replace Federally funded unemployment assistance. A more practical and workable alternative would be to provide wage subsidies on a targeted basis to workers and small businesses most in need, coupled with a greater State investment in workforce retraining programs to enable more residents to trade up to better jobs, including to fill openings in tech-related fields and health care.
Editor’s note: This is part of a regular biweekly Covid-19 Economic Update prepared by economist James Parrott of the Center for New York City Affairs with the support of the Consortium for Worker Education and the 21st Century ILGWU Heritage Fund.