Center for New York City Affairs

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New York City’s pandemic jobs deficit stood at 421,000 in December 2021; 15.2 percent Black unemployment in the fourth quarter

While the Omicron case surge is subsiding in New York City, it is likely to be a few more weeks before business returns to the trajectory it was on in the weeks before Thanksgiving. Large companies in the remote-working sectors have pushed back plans for the return to Manhattan offices, and the rebound that had begun in the early fall in tourism, business travel, and the performing arts was effectively delayed for two to three months due to Omicron.  

Although New York City’s rate of total payroll job growth exceeded the nation’s during the fourth quarter of 2021 (1.3 percent vs. 0.7 percent) and for the last 12 months (six percent vs. 4.5 percent), the city started from a deeper pandemic jobs hole and its recovery remains well behind the rest of the country. As of December 2021, New York City’s pandemic jobs deficit was 8.8 percent, more than four times the deficit of the rest of the rest of the country (two percent for the U.S. minus New York State). The Downstate suburbs and Upstate New York regions had a 6.2 percent jobs deficit, much worse than the rest of the country, underscoring the statewide nature of New York’s lagging position. (In its recent policy brief, the Center proposed a substantial workforce development investment by Albany to prepare many of the state’s Covid-dislocated workers for more promising jobs in growing industries.)   

Since the pre-pandemic month of February 2020, only a handful of industries have seen any net job growth. The industries that have added the most jobs are among the lowest paying of all industries: home health care (+18,100), delivery services (+13,700), warehouses (+6,600), and employment services (+ 5,600). There also have been smaller gains in two higher-paying industries: management consulting (+4,200) and computer systems (+1,300).  

As of December 2021, New York City had regained only 55 percent of the jobs lost during the first two months of the pandemic (March and April of 2020), and the total payroll employment level was still 421,000 below the February 2020 level.i Nearly 82 percent of the missing jobs in the city fall in the face-to-face category of industries that have been hardest hit during the pandemic, led by accommodation and food services (still down by nearly one-third) and arts, entertainment, and recreation (19 percent jobs deficit). With deficits of 17-19 percent, construction, manufacturing, and other services are close behind.  

Despite much of the job rebound in the fourth quarter occurring in the face-to-face industries, that category is still down by a much greater factor (-16.9 percent) than the remote-working industries (down four percent) or the essential industries (down two percent). 

For the 12-month period of December 2020 to December 2021, New York City’s net jobs total rose by 244,000. This number was slightly below half of the City’s official 2021 employment forecast of 400,000, released in April of 2021.  

Because of the limited sample size of the monthly household survey used to estimate New York City resident labor force trends, we analyze detailed labor force data on a quarterly basis. For the fourth quarter of 2021, the city’s unemployment rate was 9.1 percent, more than twice the 4.2 percent seasonally adjusted national unemployment rate. The city’s unemployment rate fell by about one percentage point each quarter in 2021. However, the gradual improvement overall was not shared by all race and ethnic groups. As the chart below shows, the fourth quarter unemployment rate for Black non-Hispanics was 15.2 percent, more than twice the 6.3 percent rate for white non-Hispanics. The Black unemployment rate also showed little improvement over the year whereas the white unemployment rate declined steadily.  

Factoring in involuntary part-time employment and discouraged workers, the city’s under-employment rate was 13.5 percent in the fourth quarter: 19 percent for Blacks, 10.2 percent for whites, 16.8 percent for Hispanics, and 9.3 percent for Asian and others.  

Nearly half of all unemployed city residents in the fourth quarter were long-term unemployed, with 24 percent unemployed between 27 and 52 weeks, and 24.7 percent unemployed for more than 52 weeks.  


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.