The immediate imperative to contain the current wave of Omicron infections should not deter New York’s leaders from acting now to decisively respond to our state’s pandemic unemployment crisis. Governor Kathy Hochul’s responses to date, while supporting hotels and their workers and encompassing several other critical elements, do not address the full spectrum of dislocated workers and businesses. Thousands of restaurants, neighborhood retail stores, and arts and entertainment activities and other businesses and their workers have been battered by shutdowns and pervasive uncertainties. The Empire State’s eight percent jobs deficit is the most severe in 80 years. Our relative pandemic job loss is more than three times the national average (-8 percent vs. -2.5 percent). It’s not just New York City’s with a 9.4 percent pandemic jobs deficit; the suburbs and Upstate combined have lost 7.5 percent of pre-pandemic jobs, a record by itself worse than 48 other states. 

This policy brief makes the case for an active New York labor market policy combining a targeted wage subsidy with substantial workforce investments to assist workers whose businesses are struggling to hold on, those whose jobs are not returning, and those seeking training or further education to qualify for better jobs, including to fill openings in tech-related fields, health care, advanced manufacturing, and other businesses that could grow provided they have a skilled workforce. Portions of the $12.8 billion in Federal fiscal relief that New York State has received should be used to fund both renewed economic assistance and a workforce-oriented economic strategy. New York’s Covid-19 ravaged labor market is not going to heal itself. This active labor market policy is market-oriented and geared to support New York’s businesses in meeting changing skill and workforce demands. New York needs this investment to effectively respond to the current unemployment crisis and the profound economic and labor market polarization and changes wrought by Covid-19.