Don’t ignore the hidden reason the city economy is still struggling so long after the pandemic ended: the way our government (city and state) discourages job creation and economic growth.
A host of labor statistics paint a grim picture of the city’s recovery: We are still down 12% from our pre-pandemic total of jobs (and recovering that last slice will take nearly two more years), while the nation’s up 500,000. Unemployment’s around 6%, nearly twice the national level.
Worse, the actual workforce has shrunk by 300,000, thanks to some giving up on Gotham entirely and moving away and others just giving up on finding work. And once again the poor and minorities have it worst.
Yes, part of it is that the coronavirus hit our area first and hardest; part, that New York (city and state) persisted far longer and harder than most in imposing lockdowns, masking and every other “anti-COVID” measure.
Plus, the new lesson that many folks can work remotely still has a lot of people not coming in to offices here (far more than in most of America). No one knows just how big the permanent dent will be, but — between employers who see it as a huge savings and employees who strongly prefer it — the number won’t be small.
The New York City workforce has shrunk by 300,000 since the pandemic began.Bloomberg via Getty Images
Yet New York government bears a lot of the blame, too (and not just for those prolonged lockdowns). Our area always takes longer than the rest of the country to bounce back from recessions, not just the COVID one.
On one hand (and here, the feds play a role, too), government pays you not to work. The combo of benefits from unemployment and ObamaCare subsidies alone can deliver more than a $63,000 salary in New York for a two-parent, two-kid family, for example. And other programs like housing assistance and SNAP (food stamps) can add to that.
NYC’s workforce has shrunk by 300,000 since start of pandemic
On the other hand, city and state laws discourage job-creation. For starters, they make it harder to open a business here (except, apparently, an illegal pot shop): Permitting is a nightmare.
And so is hiring: Would-be employers are limited in what background checks they can do, in whether they can hire you as an independent contractor vs. a part-time employee — and even in how they can schedule shifts. Very high minimum wages and tops-in-the-nation taxes don’t help, either.
Government’s also largely at fault for why health insurance costs so much more in New York (especially for younger people: state law won’t let insurers charge healthy people less, for example), why electric rates are so high (and headed higher) — and even why rents (commercial as well as residential) are so high.
Construction has some of the highest job losses, yet local politicos (including judges) love to abort major projects, as well as hold them up for ransom. And the various approval processes give them a ton of weapons for these games.
Benefits from unemployment and ObamaCare subsidies can deliver more than a $63,000 salary in New York.John Lamparski/Sipa USA
Meanwhile, the lefties who run the Legislature won’t even renew some version of the affordable-housing 421a tax break, putting at risk many of the developments Mayor Eric Adams has in the works (among many others).
Heck, the reason a handful of families have dominated the city real-estate industry for decades is that it requires deep experience (and connections) in local politics to get anything built much bigger than a single-family house.
New York’s political establishment is dedicated to “protecting” — workers, renters, “landmarks,” the environment, even criminals these days — without regard to the cost, including outright victims.
And yes, crime continues to keep away commuters and tourists — people who generate jobs in the hard-hit retail and hospitality sectors. But the Legislature’s leaders basically just insist it’s not so.
Not to mention that all these barriers to legal enterprise and employment also have an effect opposite of what’s intended, encouraging huge black and gray markets — off-the-books, tax-free work and transactions (where the workers can easily be exploited, to boot).
For all the pols’ progressive posturing, the fact is that the iron hand of New York government is fundamentally dedicated to making broad progress far harder than it has to be.
And that, at bottom, is why New York is recovering so much more slowly than the rest of the nation.