- James Parrott and L.K. Moe
The Covid-19 New York City Economy Three Months In:
Reopening, and a Continuing Low-Wage Worker Recession
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New York City is experiencing deep and enduring unemployment mostly by low-income workers of color and the city is facing a sluggish recovery with double-digit unemployment. While there was a net gain of 42,000 private jobs in May, total payroll jobs remained more than 19 percent (-892,000) below the pre-pandemic February level, and over 300,000 independent contractors have lost work. This abrupt 1.25 million total job loss since February marks by far the sharpest job decline seen in New York City since the 1930s. To a greater extent than in previous downturns, the Covid-19-related job losses are heavily concentrated among low-wage workers, hitting persons of color, immigrants, young workers, and less educated workers the hardest. Factoring in the 380,000 workers who haven’t looked for jobs during the pandemic would raise the city’s unemployment rate to 26 percent in May. As New York City re-opens further in coming weeks, more jobs will return but it is likely that recovery will proceed unevenly, with public health concerns overshadowing other forces. While it is impossible to precisely predict where the recovery will be by the end of this year, it is likely that the city could end 2020 with 500,000 to 600,000 fewer jobs than at the beginning of the year, with half of that job deficit stemming from the face-to-face industries including restaurants, local retail, neighborhood services, and arts and entertainment. Substantial additional federal economic assistance is needed to reduce hardships and spark more and better employment opportunities.
James A. Parrott is Director of Economic and Fiscal Policies at the Center for New York City Affairs at The New School.
Lina Moe is a research assistant at the Center and a graduate student in economics at the New School for Social Research.
Photo by Clay Hensley.