Labor Day 2004 finds New York, like 31 other states and the nation as a whole, still struggling to replace the jobs lost during the recent recession.

"Many states, particularly in the Midwest, are doing worse than New York, but the situation facing New York’s working men and women is only improving at a snail’s pace," said Frank Mauro, executive director of the Fiscal Policy Institute. "The national economy has yet to show any strong or sustained growth so it is no surprise that more than half the states still have fewer jobs than when the recession began in March 2001."

Mauro’s comments were based on the new edition of The State of Working America, which is being released today by the Washington-based Economic Policy Institute (EPI), the nation’s foremost independent monitor of the impact of economic trends on American workers.

The State of Working America, which is published biennially by EPI, details what is happening to jobs, unemployment and underemployment rates, family incomes, poverty levels, and living standards in America and why. The State of Working America 2004/2005 was written by EPI's President Lawrence Mishel, senior economist Jared Bernstein, and economist Sylvia Allegretto. As users of previous editions of this comprehensive assessment of the condition of the American economy know, it is an invaluable resource for anyone interested in understanding how working families are faring in today’s economy.

Overall, the new edition of The State of Working America concludes that the U.S. job market is still too weak to broadly distribute the benefits of the growing economy. The slack labor market has led to a situation in which wages have started to fall behind inflation. Between November 2003 and June 2004, the real wages of the 80% of the employed workforce in blue-collar and non-managerial service jobs have declined consistently. By June 2004, hourly wages for these workers, adjusted for inflation, were 1.2% below their year-ago level; and weekly earnings, due to a loss in hours worked per week, fell further over this period, by 1.5%. Overall, according to EPI's announcement of its findings, "Today's picture is a stark contrast to the full employment period before the recession, when the tight labor market ensured that the benefits of growth were broadly shared."

In New York, the median income of four-person families, in constant 2003 dollars, has fallen even more sharply than in the US as a whole. And despite some improvements in recent years in health insurance coverage, the economic fragility of New Yorkers is increasing over the long term with a downturn in both the number of workers covered by health insurance and the number without pension plans. Between 1988 and 2003, the percentage of New Yorkers with employer-sponsored health insurance fell from 63.3% to 59.8%. Over this same period, the number of New Yorkers without any health insurance increased from 10.7% to 15.1%. Between the 1979-1981 period and the 2000-2002 period, the percent of New York workers with pension coverage fell from 52.9% to 45.3%.

New York suffered far greater rate of job loss than the nation as a whole during the recent recession because of the bursting of the stock market and dot.com bubbles, which affected two industries heavily concentrated in New York, and the fact that New York took the brunt of the terrorist attacks of September 11, 2001. The economic impacts of September 11 roughly doubled the number of jobs lost in New York during the downturn.

Nationally, Gross Domestic Product and other economic indicators began to turn the corner almost three years ago, leading the National Bureau of Economic Research to declare the national recession over in November 2001. Yet even in an official recovery, job loss continued - both nationally and in the overwhelming majority of the states. The result has been the longest period of sustained job loss since the Great Depression.

Since the "official" end of the recession, the New York and national economies have endured a number of fits and starts in terms of employment growth. During the first year of the "recovery," New York saw job growth in six months and job losses in the other six. By August, 2003, total nonagricultural employment in New York State, on a seasonally adjusted basis, had fallen to 8,386,700, its lowest point during the current business cycle. The rate of job growth since that point has been relatively weak, and far from sufficient after such a grueling period of layoffs. From March 2001 to August 2003, the total number of jobs in New York fell by nearly 286,000; from August 2003 to July 2004, the total job count has increased by 61,000. (see Figure 1)

In 2003, the median wage earned by New York workers fell for the first time in three years and it is now 2.35% below the median wage for the Northeast as a whole (the six New England states plus New York, New Jersey and Pennsylvania). Until 1996, the median wage in New York State had always been higher than the Northeast median. Inflation-adjusted wages for lower-paid New York workers (as measured by the 20^th percentile wage) are also now lower than ever before relative to the 20^th percentile wage for the Northeast as a whole. (See Figures 4 through 6).

Although New York is less dependent on manufacturing than in the past, the

loss of jobs in the sector have a dampening impact on wages since jobs in the sector tend to pay more than the new jobs being created. (See Figure 16) Between 2000 and 2003, employment in the sector declined by 18.1% compared to a national loss of 15.9%. (See State of Working America 2004-05, Chapter 6)

The weak labor market also contributed to an increase in part-time employment. Between 2000 and 2003, part-time employment in New York increased by 1.6 percentage points to 22.7% of the work force - at the national level it grew by 1.3 percentage points. New Yorkers who say they are working part time for economic reasons increased from 11% of the part-time workforce to 13%. For the nation as a whole, this indicator increased from 10.8% to 14.7%. (See State of Working America 2004-05, Chapter 6)

In 2001-2002, New York’s four-person median family income decreased by 3.1%, substantially more than the national decrease of 2.4%. (See Figure 3) New York's unemployment rate continues to be above the national average, and, New York has the second-highest long-term unemployed rate in the nation. (See Figures 7 and 9) Slow job growth continues to contribute to the lag in income and the high poverty rate in the state.

New York is experiencing growth in the total number of jobs in the state. But the growth is very slow, and it comes on the heels of a long and hard period of job loss.

New York recorded modest employment gains over the past year. Between August, 2003 and July, 2004, New York State gained 61,000 jobs, a 0.7% increase--slightly less than the national increase of 1.1%.

Yet, during the recession (from March 2001 to November 2001), New York State lost 200,000 jobs, a decline of 2.3% or nearly twice the national decline of 1.2%. New York had the fourth-largest job loss among the 50 states and Washington, DC.

Even after the official end of the national recession in November 2001, the nation and New York State continued to lose jobs. From November 2001 to August 2003, New York State lost 86,000 jobs, a decline of 1.0% - slightly higher than the national decline of 0.8%.

From March 2001 to July 2004, New York State lost 225,000 jobs, a 2.6% decline, two-and-a half-times the national decline of 0.9%.

New York State lost nearly 3% of its jobs from the first half of 2001 to the first half of 2004. This decline was more than twice the rate of loss for the nation. Job losses were not distributed evenly across New York State. Although some regions had strong gains, the state average was dragged down by sizeable losses in New York City. In addition, eight of the 11 upstate metropolitan areas lost jobs, most at a higher rate than the national average.

Between 1979 and 1989, New York had much stronger wage growth than the national average. However, the 20th percentile wage level had only anemic gains. By 1989, the gap between high-wage and low-wage earners increased – the 80th percentile wage in New York was 2.73 times greater than the 20th percentile wage, similar to the national picture, where it was 2.77 times greater.

In 1989, wage disparity in New York was virtually the same as the national average – the 80th percentile wage in New York was 2.83 times greater than the 20th percentile wage; nationally, it was 2.8 times greater.

But between 1995 and 2000, wage growth in New York, particularly for lower-wage brackets, lagged well behind the national average. This exacerbated the wage gap in New York, while the national average improved. By 2003, the 80th percentile wage in New York was 2.91 times greater than the 20th percentile wage; nationally it was 2.74 times greater.

Until 1996, the median wage in New York was always higher than in the Northeast as a whole. But since then the median in New York has been lower than the regional average, reaching its greatest differential in 2003.

Median income showed a significant drop in 2001-2002, pushing New York down to 18^th among states in median income for a family of four.

In 1980, New York State’s median income for a four-person family ranked 22^nd among the 50 states and Washington DC. Over the course of the 1980s, the median income of a four-person family in New York had higher annual growth rates than the national average, allowing New York to jump in the rankings to 14^th in 1990. However, this trend saw a drastic reversal in the early 1990s, when the median income of a four-person family in New York grew only 0.1% per year, well below the national growth rate of 1.1%. Median income levels of a four-person family in New York began to grow again in the 1990s, before reaching a peak in 2001. In 2001-2002, median income for a four-person family dropped by 3.1%, compared to a drop of 2.4% nationally, bumping New York State down to 18^th in median income for a four-person family.

Unemployment rates remain high, despite recent job growth, and long-term unemployment is among the worst in the nation.

Since the early 1990s, except for a brief period in 2001, New York State has had unemployment rates higher than the national rate. Poor economic performance in the upstate regions and skewed economic growth in New York City largely account for this trend.

In 2002, 43.8% of New York State’s unemployed workers made unemployment insurance claims. This benefit recipient rate was slightly higher than the nation’s 42% rate, but substantially lower than the rate of neighboring states. New York’s low recipiency rate reflects continued barriers that prevent low-wage, part-time and non-English speaking workers from receiving unemployment benefits. New Yorkers also had a very high unemployment insurance benefit exhaustion rate.

Lack of health insurance continues to be a threat to the stability of families in New York. Yet, there is good news in a recent increase in the coverage of children—an indication, perhaps, of the positive impact of the Family Health Plus program

From 1987 to 2003, the share of New Yorkers without health insurance for the full year increased from 11.6% to 15.1% with a peak of 17.5% in 1997. During the same time period, the share of Americans without health insurance for the full year increased from 12.9% to 15.6% with a peak of 16.3% in 1998.

From 1987 to 2003, the share of New York children without health insurance for the full year fluctuated from 10.1% to 9.4% with a peak of 15.5% in 1997. During the same time period, the share of American children without health insurance for the full year fluctuated from 12.9% to 9.4% after a peak of 15.4% in 1998.

New York has shown a steep decline in pension coverage, going from being the 12^th to 35^th among the states. And over the last two decades only West Virginia declined more than New York in pension coverage.

The proportion of New York workers covered by pension benefits fell from 52.9% in the 1979-81 period to 45.3% in the 200-02 period. In 1981, New York ranked 12^th among states in pension coverage for its workers, but a dramatic decline in pension coverage of New York workers occurred in the 1980s and by 2002 New York ranked 35^th.

New York continues to have a higher poverty rate than the nation or the region, and the highest poverty rate of all the Northern states.

Although the poverty rate in New York has remained stagnant over the last several years, it is significantly higher than the nation’s. On a regional basis, New York (14.3%) had a higher poverty rate than all the other Northern states.

From 1980 to 2003, the share of New Yorkers living in poverty increased from 13.8% to 14.3% with a peak of 17.0% in 1994. From 1984 to 2003, the share of New York children living in poverty fluctuated from 25.2% to 18.9% with a peak of 26.4% in 1998. During the same time period, the share of American children living in poverty fluctuated from 21.5% to 17.6% after a peak of 22.7% in 1993.

In 2003, a family of four was only considered "in poverty" if its annual income was less than $18,810 per year. Although it is difficult for any family to make ends meet on $1567 a month, it is a particular struggle for families in areas where the cost of living is higher than the national average, such as New York State.