Five Borough Report June 2003
Unemployment and
Joblessness in New York City
Mark Levitan
It has been over two years since the demise of
the dot com boom and Wall Street’s tumble from exuberance to funk. Although
the local recession first took hold at the high end of the city’s economy,
much of the subsequent burden has been shouldered by New Yorkers farther
down the income ladder.
New York City’s
Unemployed
It is the young, the less educated, Blacks,
Hispanics, and men who have suffered a disproportionate share of the
decline in employment. Workers aged 16-19 and 20-24 make up 3.2% and 10.2%,
respectively, of the City’s labor force, but 8.9% and 20.1% of the
unemployed. Workers with the least schooling are overrepresented among the
unemployed. Those with less than a high school diploma are 16.9% of the
labor force but account for 27.4% of the unemployed. By contrast, workers
with a Bachelors degree or higher are 34.9% of the labor force but only 21%
of the unemployed.
Black residents make up 31.9% of the unemployed
but only 23.7% of the labor force. Hispanics comprise 28.2% of the unemployed
and 24.0% of the labor force.
Blue collar workers hit
hardest
This is not a “white
collar recession.” White collar workers -- executives, managers, professionals and
technicians -- are under-represented among the unemployed, while blue
collar workers -- craft, machine operatives, laborers -- are
over-represented. Executives and managers make up 14.5% of the labor force
but only 9.1% of the unemployed. Blue collar workers, by contrast, are
20.2% of the labor force, but are 30.0% of the unemployed.
Impact of the Recession: Declining Rates of Jobholding
Even before 9/11, New York City’s economy was
contracting. Employment in September, 2001, was 48,000 below its December,
2000, peak. Then came 9/11, and by December the City had lost 141,000 more
jobs. Overall, the unemployment rate jumped from 5.7% in 2000 to an average
of 8.3% in April,2003.
However, the unemployment rate does not capture
the full extent of the recession’s impact. Workers are considered to be unemployed
only if they are actively seeking work, and looking for a job in a
recession is a discouraging experience. To the extent that some groups
rates are more likely to become discouraged and stop actively seeking work
than others, unemployment rates will understate the disparate impact of the
recession across demographic groups. The employment-population ratio -- the
proportion of the working age population with paid employment -- provides a
better measure of joblessness and of this “discouraged worker” effect.
The
employment-population ratio for men dropped 5.0 percentage points between
2000 and 2002, while the ratio for women dropped a more modest 1.6
percentage points in the same period. Young men have been hit especially
hard. The employment-population ratio for young men 16-24 plunged 9.7
percentage points to 36.4%, compared to a 1.2 percentage point dip for
young women to 40.4%. The dramatic collapse in
jobholding by young men puts their employment-population ratio four
percentage points below that of their female counterparts.
Among men, the most
disadvantaged groups have suffered the steepest declines in jobholding. The employment-population
ratio for Black men fell by 6.1 percentage points to 58.1%, while the drop
for Hispanic men was even more dramatic, a 7.0 percentage point plunge to
65.5%. The decline for White men was a more modest 4.2 percentage points,
to 73.6%.
What must be done?
The City labor market is in what may become an
extended slump. Continued weakness on Wall Street and the city and state
fiscal crises will retard growth for some time to come. Without effective action
in Washington to provide economic stimulus, job opportunities for
out-of-work New Yorkers may be few and far between. Programs that will
bolster spending and spur economic growth should be at the top of the
federal agenda. Among the needed policies are three essential initiatives.
Extend Unemployment
Insurance A
further extension of unemployment insurance would not only alleviate
hardship among the unemployed but would bolster consumer spending and
stimulate economic growth. Benefits flow toward areas with the greatest
unemployment, and unemployed workers quickly spend their benefit checks on
life’s necessities.
Provide Revenue for
the States
When State tax revenues fall, they must raise tax rates or cut
expenditures. Both reduce spending and deepen or prolong recessions.
Create a Transitional
Jobs Program Money is available to put New Yorkers back to work. The Lower
Manhattan Development Corporation should establish an emergency
transitional jobs program, such as that proposed by the Labor Community
Advocacy Network (www.lcan.org). This
would make use of wage subsidy funds, giving cash-strapped employers the
ability to put thousands of people back to work in a relatively short period
of time. Moreover, these subsidies could be utilized in conjunction with
funds from the federal Workforce Investment Act to provide participants
with new skills along with new jobs.
-- Excerpted from “A Portrait of Inequality:
Unemployment and Joblessness in New York City 2002”, CCS Data Brief #8,
Community Service Society, Feb. 2003, www.cssny.org
June 2003
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