NYC’s Unsettled Covid-19 Era Labor Market: The Case for an Active Labor Market Policy

NYC’s Unsettled Covid-19 Era Labor Market: The Case for an Active Labor Market Policy
New report reveals uneven New York City labor market continues to hit low-wage workers the hardest.
Read the report
NEW YORK (Jan. 19, 2023) — An uneven labor market continues to have the hardest impact on the city’s most vulnerable workers, according to a new report released today by the Center for New York City Affairs at The New School (CNYCA), Workforce Professionals Training Institute (WPTI), and the New York City Employment and Training Coalition (NYCETC).

While New York City continues to recover from the global pandemic and its effects on the workforce, the new report titled “NYC’s Unsettled Covid-19 Era Labor Market” analyzed payroll employment data and found a 2.5% payroll jobs deficit compared to February 2020. Industries — including restaurants, retail, hotels, construction, the arts, and manufacturing — continued to document significant job losses. Those losses have been even more pronounced among lower-income workers and workers of color, and working parents have faced particularly challenging circumstances.

Shifts in the labor market have also weighed heavily on employers struggling with recruiting and retaining workers, most notably in the industries with rapid job growth and those that have yet to reach pre-Covid-19 job levels. 

Job losses in face-to-face industries — especially hotels and restaurants — accounted for three-fourths of the city’s initial job loss during the first 12 months of the pandemic but regained only 76% as of November 2022. Likewise, small businesses still struggle to find new workers, often lacking access to the city’s workforce system.

“Unemployment remains much higher than before the pandemic, and is especially high compared to other workers for Black and Latinx workers, young workers, and workers without a four-year college degree,” said James Parrott, co-author of the report and Director of Economic and Fiscal Policies at the Center for New York City Affairs at The New School. “Several industries continue to experience double-digit pandemic employment deficits, and while several industries have added jobs since February 2020, many of those pay low wages. Hundreds of thousands more workers are experiencing economic hardships and the city does not expect to return to pre-pandemic job levels until late 2024, nearly five years after the pandemic’s onset.”

“New York City cannot afford to take its foot off the pedal when it comes to its financial investment in developing its talent,” said Gregory J. Morris, CEO of the New York City Employment and Training Coalition. “For too long, we have failed to make policy that bridges the gap between workers seeking quality jobs and employers seeking opportunities to create and innovate. This consequential report further demonstrates the importance of education, employment training, and career development providers who are the backbone of our city’s stability and economic growth and the need for our City to build the well-resourced, coordinated, and data-driven system it needs to ensure generational success.”

“We are at a critical inflection point for New York City’s economy, still dealing with the lasting impact of COVID-19 and facing a labor market that has changed significantly,” said Sharon Sewell-Fairman, CEO of Workforce Professionals Training Institute. “The workforce system can and must play a central role in ensuring that entire communities are not left behind in the city’s recovery. The report’s key findings, and our upcoming series of policy recommendations based on those findings, can help guide our city toward an equitable future in which low-income workers, communities of color, and all New Yorkers have real access to economic opportunity.”

“The current fragmented workforce system has many strengths and a number of comprehensive training and career advancement models exist; however, the lack of overall coordination and planning limits its effectiveness and impact,” said Lina Moe, co-author of the report and Assistant Director of Economic Research at the Center for New York City Affairs at The New School. “The city really needs an active labor market policy that takes a comprehensive approach, plans and coordinates across the system’s four branches to connect with workers and businesses, and identifies and builds many more career pathways and the ladders and supports needed to help workers climb those ladders.”

Key findings in “NYC’s Unsettled Covid-19 Era Labor Market” include:

*New York City’s recovery from pandemic-induced job losses continues to lag compared to the national recovery, with a 2.5% pandemic jobs deficit, with the City experiencing a 300,000-person drop in the labor force since early 2020, including many older workers in a reversal of the pre-pandemic trend. 

*The pandemic’s adverse employment impacts continue to show sharp disparities by income, education, age and immigration status — Black workers had an unemployment rate of 9.8 percent, compared to 3.5 percent for white workers, and workers with a high school education or less were 25 percent more likely to lose a job compared to the average worker. 

*There continues to be a high demand from employers for workers, especially in sectors that are both lagging (e.g., restaurants, retail, hotels) and fast-growing (e.g., technology and healthcare), while employers struggle with recruiting and retention in the face of changing worker attitudes and expectations.

*Twenty industries — which include higher-paying tech, finance and professional services jobs — added a combined total of 154,000 new jobs between February 2020 and November 2022, but the need for career-sustaining wages for jobs with lower educational requirements persists.

*The City’s efforts to provide New Yorkers with access to employment and career development are disjointed and under-resourced. Developing a functional and sustainable workforce development system requires public and private partnerships and increased investment in education and training.

“NYC’s Unsettled Covid-19 Era Labor Market” follows an earlier report released in September 2022 titled, “New York City’s Workforce Landscape: A Network of Programs, Providers and Organizations Foundational for Catalyzing a Robust and Equitable Economic Recovery.” In it, the authors surveyed 143 organizations and reported that organizations that provided crucial support during the pandemic faced increased demands but are struggling with fewer resources.  

The previous report also highlighted the absence of coordinated efforts between public and private partners to share data and definitions of success; a lack of consistent and flexible financial support for effective long-term skill development and career growth; an unclear landing spot for key stakeholders to convene and direct labor market strategy; and the inadequate city and state funding for the human services sector.


About the New York City Employment and Training Coalition (NYCETC)
Founded in 1997, the New York City Employment and Training Coalition (NYCETC) is the largest city-based workforce development association in the country. NYCETC works to ensure that every New Yorker — especially those who have been historically marginalized and disenfranchised and cut off from workforce opportunities — has access to the skills, training, and education needed to thrive in the local economy and that every business is able to maintain a highly-skilled workforce.

About the Center for New York City Affairs at The New School
The Center for New York City Affairs is an applied policy research organization. The Center works where people’s lives intersect with government and community organizations to illuminate the impact of public policy on the lives of individuals and communities. Our research focuses on practical solutions, rigorous analysis, and provides real-time feedback for policymakers, providers, and communities. The Economic and Fiscal Policies team has built a strong track record of publishing evidence and arguments that have facilitated change in low-income New Yorkers’ lives, such as labor protections for gig workers, reforming unemployment insurance, and increasing pay for childcare and social service workers.

About Workforce Professionals Training Institute (WPTI)
WPTI increases the effectiveness of people, programs, and organizations that are committed to generating pathways out of poverty through employment. Our three-tiered approach strengthens capacity at all levels of the workforce development system.

*Professional Training: Develop the skills and careers of practitioners
*Organizational Consulting: Maximize productivity of programs and teams
*Systems Building: Create linkages, foster research and influence funding and best practice priorities