CNYCA’S COVID-19 Economic Update: Job market behavior in a pandemic—no easy answers

Disclaimer: Content in this article was obtained from NYC Employment + Training Coalition’s (NYCETC) NYC Workforce Weekly and the Center for New York City Affairs (CNYCA) to serve as a resource for job seekers and those who are curious/interested in learning more about the current economy of the workforce.

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Original article HERE / Past installments on CNYCA’S COVID-19 Economic Update HERE


We’ve all seen the “Help Wanted” signs in the windows of our neighborhood businesses. It’s a reassuring sign that business is coming back, and that our sequestered days might be waning. On the other hand, how can it be that jobs are going unfilled when we know that three-quarters of a million New Yorkers are jobless or have exited the labor market over the past year?

Many businesses are right to ask whether the extra $300 in weekly unemployment benefits available through September 6 is keeping workers home. But as journalist Greg David noted in a recent article in The City on this issue, “it’s complicated.” David cited a recent Brooklyn Chamber of Commerce survey in which 42 percent of businesses felt that federal unemployment benefits were discouraging return to work. Yet, the Brooklyn survey, according to a report in the Post, also found that 41 percent of businesses said they couldn’t provide enough hours to employees, 28 percent said employees had moved on to other jobs, workers had safety concerns in 12 percent of the cases, and employee health issues were cited by five percent of businesses. And several businesses also noted that lack of child care was keeping some workers home.

Clearly, a multiplicity of factors is influencing job market behavior as pandemic business restrictions are eased, Covid case rates decline, and vaccinations become more widespread. It is not so clear cut that unemployment benefits are the primary cause for some jobs going unfilled, although the availability of benefits likely does make it possible for many of the unemployed to exercise greater latitude in making decisions in the best interests of their families, personal health, and career choices. But isn’t that appropriate considering that the unemployed lost their jobs due to a public health emergency not of their making, and that the pandemic has upended livelihoods and family circumstances for millions?

Beyond survey perceptions there are various economic indicators that reinforce the notion that there are no simple or easy answers on this question. Even though an earlier $600 weekly federal unemployment supplement ended at the beginning of August last summer, there was no local job surge in ensuing months. Rather, the second wave of Covid infections beginning in October kept the city’s overall job level flat for several months. Jobs didn’t start to rebound strongly until February and March (NYC added 90,000 jobs over those two months), even though the new $300 weekly federal supplement began in early January.

Employment in restaurants—where unfilled job openings are most common—rebounded some in the fall, fell off again during the winter, and started hiring again in February. This erratic pattern may have signaled an instability that deterred workers from returning. (April payroll data for New York City will be released on May 20.)

The fact that employment in child care centers has not risen appreciably since November also supports the notion that the lack of child care capacity has been preventing some parents from returning to work. The March 2021 employment level was still 21 percent below the pre-pandemic level, and there was a severe crisis in child care accessibility and affordability before the pandemic. The very slow pace with which the State has been moving to disburse emergency federal child care funding has further exacerbated the child care situation.

Since most neighborhood businesses are not back to full capacity, many are not able to offer their employees full-time schedules. Unlike other states, New York State’s partial unemployment system is particularly antiquated and confusing for workers to navigate. There are “cliff effects” as the figure below indicates, where an additional hour of part-time work can dramatically reduce partial unemployment benefits, unduly complicating a worker’s decision about returning to work part-time. State legislators and the governor have had proposals to remedy the problem since January but have not yet reached agreement on a resolution. Meanwhile, an estimated 25 percent of the two million-plus UI recipients in New York State are receiving partial benefits.

Several news reports indicate that some restaurant businesses have raised pay offers or enhanced benefits to attract workers back. That is what labor economists would expect to happen when recruitment problems persist. The need for higher pay is particularly warranted given that New York State pay regulations permit a “subminimum wage” for tipped restaurant workers of $10 an hour whereas the wage floor for most New York City workers has been $15 since the beginning of 2019. Since most restaurants are far below pre-pandemic business levels, tips are likely a fraction of what they previously were.

CNYCA’S COVID-19 Economic Update: NYC jobs resumed their return in February and March after a flat four months

Disclaimer: Content in this article was obtained from NYC Employment + Training Coalition’s (NYCETC) NYC Workforce Weekly and the Center for New York City Affairs (CNYCA) to serve as a resource for job seekers and those who are curious/interested in learning more about the current economy of the workforce.


James A. Parrott, the Director of Economic and Fiscal Policies of the Center for New York City Affairs (CNYCA) at The New School has prepared the latest report of NYC’s economy issued February 2021.

New York City lost 750,000 payroll and self-employed/independent contractor jobs on average between the months of February and December in 2020. The loss for the entire year was the worst single-year city job decline since the 1930s. The partial rebound since last spring has been called a K-shaped recovery for good reason; many in the bottom half of the economy have lost jobs or earnings and are experiencing severe housing and food insecurity, while most of those in the top half of the income distribution retain their jobs, and many have seen their financial assets rise in value. Signs of serious economic distress are multiplying, long-term unemployment is skyrocketing, many of the new jobs emerging are lower quality than the jobs that have been lost, and many of those returning to jobs are only working part-time. The city’s underemployment rate is 25 percent. This report examines the Covid-19 economic and employment impact in New York City at the end of January 2021, assesses the several labor market challenges for the year ahead, and discusses how much and what kind of job growth the city can expect in the year ahead. The report looks at the demographic and industry contours of the job market effects and investigates how the pandemic has exacerbated wage and income inequality.

James A. Parrott

Like the national picture to some extent, jobs have resumed returning in a handful of New York City industries in the past two months. The latest New York City jobs numbers released on April 15th showed a 40,000-gain in March and the February numbers were revised upward by 12,000, to show a 48,000-job gain over January. This follows four months of backsliding after an initial rebound during the late spring and summer months of 2020 from the low point reached last April. Still, the city’s payroll job count remains 585,000 below the pre-pandemic level.

New York City’s 12.5 percent jobs shortfall from pre-pandemic levels is two-and-a-half times the nation’s five percent falloff from February of 2020 to March of this year. Job losses in the city have far exceeded those in the rest of New York State where the decline over the past 13 months has been 7.6 percent. Sixty percent of New York State’s pandemic job losses have taken place in the city, which accounted for 48 percent of all Empire State jobs before the pandemic.

The table below shows the detailed New York City industries sorted into the three categories useful for analyzing the pandemic economy. It indicates the monthly job gains for February and March of this year as well as the extent to which the February-to-April job collapse in the early days of the pandemic has been made up in the months since. Even with the moderate gains in the past two months, New York City has only recouped 37 percent of last spring’s job losses. Only a little more than a third (35 percent) of the 725,000 job losses sustained in the face-to-face industries have been regained. 

While every industry had either job gains or very small declines in March 2021, only six industries had significant job gains in February and March, accounting for over 80 percent of the net job increases during those two months. Food services and drinking places added back over 23,000 during the two months (but were still down by 140,000 compared to last February). Private colleges and universities (part of the private education industry) and local government brought back workers (16,000 and 10,000, respectively) over the past two months after cutting headcount in December and January as the second Covid-19 surge spread. Home health services (within health care) added 8,200 jobs, temp agencies (within administrative services) 8,100, and motion picture production (part of information) 6,100 jobs, with all three industries reaching their highest levels since the widespread pandemic cutbacks. 

The remote-working industries have been much less affected by the pandemic than the face-to-face industries, with a net decline of 6.4 percent vs. 23.5 percent in the face-to-face industries. Nevertheless, finance and insurance has reduced employment slightly since last April and the job rebound in professional, scientific, and technical services has been only six percent. Health care, on the other hand, has regained 88 percent of the job reduction experienced between February-April 2020.

CNYCA’S COVID-19 Economic Update: NYC job losses proportionately greatest among largest U.S. cities

Disclaimer: Content in this article was obtained from NYC Employment + Training Coalition’s (NYCETC) NYC Workforce Weekly and the Center for New York City Affairs (CNYCA) to serve as a resource for job seekers and those who are curious/interested in learning more about the current economy of the workforce.


New York City’s Covid-19 payroll job loss was 13.6 percent over the first year of the pandemic, more than twice the 5.9 percent national job decline and greater than the job losses experienced in the next 14 largest U.S. cities. These data reflect the annual revision to the monthly establishment payroll employment data that was released by the New York State Labor Department on March 11th (see next item below). San Francisco’s 13.2 percent job loss and Los Angeles’ 12.1 percent decline were close behind New York City’s. The next five cities – Philadelphia, Boston, Miami, Washington, D.C., and Chicago – were clustered in the -9 to -10 percent range. Four cities among the 15 largest in the country – Riverside (CA), Atlanta, Dallas, and Phoenix – had smaller job declines than the nation overall.

The New York City metropolitan area had 9.9 million jobs in February 2020, or 6.6 percent of the 151 million national job total. During the pandemic’s first year, the metropolitan area had an 11.2 percent job decline; the rest of the metro area outside of New York City saw jobs fall off by 9.1 percent compared to the city’s 13.6 percent decline. New York City had 3.1 percent of all U.S. payroll employment as of February 2020. 

The Labor Department’s revised payroll employment data also revealed that New York City’s job losses in 2020 were greater than previously reported. In our February 12th report, New York City’s Covid-19 Economy Will Not Snap Back, we wrote that the February-December 2020 payroll job loss was 507,000, a decline of 10.9 percent. The job level for last December has now been revised downward by the Labor Department to show a drop of 575,000 from February, a revised job falloff of 12.3 percent. The annual revisions are based on administrative data compiled in connection with the payment of employer payroll taxes for unemployment insurance purposes. (The employment figures cited here are not adjusted for seasonal effects since pandemic-related impacts have been much greater than the usual pattern of seasonal ups and downs.)

The January employment levels dropped further because there had been some seasonal hiring in November and December that then ended. Even with a moderate 40,000 increase in February employment levels, the February 2020 to February 2021 New York City change shows a drop of 635,000 jobs, or 13.6 percent. The table below shows these 12-month job changes for individual industries grouped into the three categories (Essential, Face-to-Face, and Remote-Working) we feel best reflect the predominant dynamic caused by Covid-19 economic impacts. 

The revised data underscore the now-commonplace observation that the Face-to-Face industries have borne the brunt of the adverse pandemic economic and employment impacts. Led by the steep job losses in leisure and hospitality and the arts and entertainment industry, Face-to-Face industries as a group have seen a 25 percent drop in employment compared to a seven percent decline in the Remote-Working industries and a slight three percent decline in the Essential category. Nearly four out of every five New York City jobs lost over the past year have been in the Face-to-Face industries, where most workers do not get paid if they don’t work and where only a tiny fraction of workers can do their jobs remotely.

The annual employment revision saw a handful of industries with significant downward revisions while a smaller number of industries had upward revisions. Two of the hardest-hit industries had sharp downward revisions: hotel employment was revised down by 44 percent and eating and drinking places had a 12 percent downward revision. On the other hand, the other among the three hardest-hit industries –arts, entertainment, and recreation – had a 44 percent upward revision in its job numbers. However, as the above table shows, this industry still suffered a 51 percent job loss over the past year.

Child care employment was revised down by 21 percent and the revised job levels for temporary employment agencies were 30 percent lower. It had earlier been thought that given its essential role, employment had been fairly stable in grocery stores and drug stores; however, the more definitive administrative data resulted in a 10 percent downward revision in the number of grocery store jobs and a 17 percent negative change in drug store employment. There was a surprising upward revision elsewhere in the retail sector, with clothing store employment revised up by 43 percent. Among upward revisions in the Remote-Working industries, employment in publishing was reported to be 10 percent greater in the revised data, and there were upward revisions of five percent in investment banking, six percent in computer services, and eight percent in management consulting.