Job growth in the state over the past four years has been almost entirely in low-wage jobs, according to a report by the nonpartisan Fiscal Policy Institute (FPI).
A net gain of 21,000 jobs since July 2008 is only because a net gain of 194,000 jobs in low-wage industries offset net losses in middle-wage jobs (144,000 lost) and high-wage jobs (29,000 lost).
Low-wage is interpreted as an annual salary of below $45,000, middle-wage as an annual salary of between $45,000 and $75,000, and high-wage as above $75,000.
Most of the low-wage job growth has been in the restaurant sector, in educational service jobs other than colleges, and in home health care services.
Most of the middle-wage job losses were in the manufacturing, construction, and government sectors.
High-wage job losses were mostly in the finance, insurance, and information sectors.
A relatively strong, compared to the national situation, state and city outlook after the 2008 recession has slowed down in the last year.
An average of 25,000 New York workers lost their jobs and applied for unemployment insurance each week during the first half of 2012.
Weakest Recovery Since Great Depression
Unusual circumstances have led to the weakest recovery on record since the Great Depression, according to James Parrott, FPI deputy director and chief economist.
The circumstances include “weak consumer spending due to high unemployment and high consumer debt, and because government spending is so much weaker in this recovery than in the average of the seven prior post-WWII recoveries,” Parrott said via email.
While the 18 to 44 age group has been hit hard by unemployment, workers 55 and older have seen an employment increase, “likely an indication that older workers are holding onto jobs rather than retiring,” according to the report. The average duration of unemployment is 38 weeks in the state, with some groups in New York City experiencing much longer periods, such as the 45 to 54 age group (about 51 weeks) and black non-Hispanics (about 48 weeks).
The question of the true unemployment rate is broached in the report. Unemployment has risen at the same time as payroll job growth, which could be in part due to job growth coming from “previously discouraged workers” or others who had been out of the labor force, who decided to re-enter the labor force, and previously self-employed workers taking a payroll employment job.
But, after analyzing the rate, the researchers believe the unemployment rate is about 1 percent overstated. Yet, even if that’s true, the rate still is much higher than pre-recession unemployment (8.7 percent versus 5.3 percent).
“Despite the fact that the NYC and NYS unemployment might be overstated, unemployment is still historically high, and of long duration, and is a critical problem,” concluded Parrott.
With the addition over the last four years of about 300,000 people to the state’s working age population – and about 100,000 in between July 2011 and July 2012 – and a decrease in self-employment of about 100,000, “Many more jobs are needed to bring the unemployment rate back to pre-recession levels,” the report states.