NYC Will End 2020 With 500,000 Fewer Jobs

Despite the phased reopening plan that is returning many New Yorkers to work during the COVID-19 pandemic, a new report released this week found that the city still may lose half a million jobs by the end of 2020.
According to the report from the Center for New York City Affairs at The New School, the city may have 500,000 to 600,000 fewer jobs compared to the beginning of this year. About half of the jobs lost would be in face-to-face industries, like restaurants, retail, neighborhood services, and arts and entertainment. Another 150,000 would come from essential and remote industries, and 100,000 to 150,000 would be independent contract work. Before the global pandemic, the city was home to more than 4 million jobs.
Various factors affect the projections—like federal action and the public health crisis—so the "damage could also be greater," the report says.
With New York City in the middle of its reopening, with Phase 3 expected July 6th, the authors wrote "there is a genuine reason for a glimmer of optimism." But the economic downturn continues and recovery in face-to-face industries will be slow.
"This downtown is dramatically different from what people usually think of as an economic downturn that is caused by recessions," the report's co-author, economist James Parrott, told Gothamist.
"My sense is that the severity of the economic situation is going to become so apparent in the coming weeks—and we're really seeing that now in terms of many of the states that thought they were going to be able to reopen now are seeing tremendous increases in the number of COVID-19 cases and are rethinking, and some are pulling back from their reopening plans and so on," Parrott added.
The job losses sparked an uptick in the unemployment rate to 18.3 percent, but the report says that tally "seriously understates the true extent of unemployment" since some workers who are no longer working and not actively seeking another job are not officially counted.
"Adding these workers back into the unemployment rate estimate would result in a 26 percent New York City unemployment rate for May," Parrott and his co-author Lina Moe wrote.
A total of 1.25 million people lost jobs between February and May in NYC, the report estimates. 892,000 of those jobs were payroll jobs, not including independent contractors. Based on state Department of Labor data through May 30th, 736,100 independent workers had filed for pandemic unemployment assistance, an unemployment program expanded under the CARES Act to freelancers and gig workers, who faced weeks of waiting for their checks to arrive. The authors of the report estimate 333,000 of those independent workers were in New York City.
Unemployed workers were mostly in the Bronx, the report found, citing the state Department of Labor.
The borough had 21.6 percent unemployment in May. That compares to 19.9 percent in Queens, 18.2 percent in Brooklyn, 16.5 percent in Staten Island, and 13.7 percent in Manhattan.
The face-to-face industries where most of the lay-offs happened are also largely low-paying.
About 41 percent of face-to-face workers make less than $20,000 a year. More than one-quarter make between $20,000 and $40,000.
"This impact is mainly not affecting high-income people—professionals, managers, tech people, who still have their jobs and their benefits, their businesses are still profitable. Some are more profitable than before, like Amazon," Parrott said.
"Parts of the economy are being hammered out of existence. A lot of restaurants will fold. It's a very uneven economic impact," Parrott said. "I think it's that unevenness, which helps account for the lack of effective response by policymakers."
In the report, the authors recommended additional assistance for small businesses, federal support for jobs programs, and fiscal relief for city and state governments.
They also say Congress should extend the $600 weekly boost under the CARES Act set to expire at the end of July. Undocumented workers—an estimated 200,000 of whom are out of work—who's "fallen through the cracks" also need economic assistance. Those workers do not qualify for unemployment and did not receive federal help under the CARES Act.