Although the COVID pandemic caused double-digit unemployment levels in 2020, the nation’s recovery has been rapid. Unemployment decreased quickly in New York and the country, dropping to 4.4% in New York and 3.5% nationwide in July 2022. The recently announced July number for the United States is as low as pre-pandemic unemployment levels in late 2019 and early 2020. New York’s rate is slightly higher than it was in early 2020 – 4.4% compared to 3.9%.
In most New York metropolitan areas, unemployment rates were near the national level of 3.5% in July. Unemployment rates were significantly higher in most of Pennsylvania, Ohio, West Virginia, Maryland, and Delaware. However, the five counties in New York City, which comprise forty percent of the state’s population, had high levels. The highest rate in the state was in Bronx County – 9.1%. Brooklyn had a 6.8% rate, Manhattan had a 5.2% rate, Queens had a 6.1% rate, and Staten Island had a 6.4% rate.
Change in Employment: 2013-2022
New York’s employment grew by 6.8% over the past decade, slightly more than half the national rate. However, because employment growth was concentrated in a few western and southwestern states, jobs grew faster in New York than in 24 other states. Many northeastern, midwestern, and plains states experienced relatively slow growth. Alaska, Connecticut, Vermont, North Dakota, Louisiana, Wyoming, and West Virginia experienced job losses.
New York’s employment growth was near the regional average. Five states—Delaware, Massachusetts, New Hampshire, New Jersey, and Virginia — had greater growth; eight had less. Only Vermont and West Virginia experienced job losses during the period.
Change in Employment: 2020-2022
Since the Pandemic hit in 2020, employment levels have rebounded strongly nationally, reaching pre-pandemic levels in July. But, employment growth was concentrated in parts of the South, Texas, and the Mountain states. In most states, current employment levels are within a few percent of those in March 2020. Nationally, employment was 0.4% higher in July 2022 than in March 2020. New York’s employment level was 2.4% lower, ranking 45th among the states nationally.
Recovery in New York, New England, and the Midwest continues to be slightly slower than the national average, with most state employment levels still below their 2020 levels. New York employment in July 2022 was 9,492,300, 2.4% below the March 2020 level. The differences in employment change between states in the region were minor, less than 4%, between the worst- and best-performing states. Overall, for the Northeast-Mid-Atlantic region shown here, employment was 1.1% lower.
The low unemployment rates in New York and the nation reflect the so-called “Great Resignation”- the decision of some workers to leave the workforce. In many cases, older workers chose to retire rather than continue working during the COVID-19 pandemic. A researcher at the St. Louis Fed, Miguel Faria-E-Castro, found that 2.6 million additional people retired.
Although the labor force has recovered to the point where it is almost as large as before the Pandemic, its growth remains below the pre-COVID trend. Because labor availability is below the pre-COVID trend, unemployment levels are very low, and many employers are struggling to find the necessary staff. Hotels, restaurants, and other leisure services have had particular problems and continue to operate in many cases with limited hours or services.
The New York Metropolitan Area
The job performance of the New York metropolitan area, where nearly two-thirds of the state’s residents reside, is crucial to the state’s overall economy. Approximately 40 percent of the state’s residents reside in New York City. Although New York City’s unemployment levels are the highest in the state, the city’s job growth shows a different picture.
New York City’s job growth between 2013 and 2022 was 14.2%, nearly twice that of all New England and Middle Atlantic metros, which grew by 7.9%. Between 2013 and 2022, employment in the metropolitan area grew by 9.5%.
New York City drove the metropolitan region’s growth between 2013 and 2022. Long Island’s population increased by only 3.2%, while employment grew by 3.6% in Orange, Westchester, and Rockland Counties.
Employment change in the New York Metropolitan area during the post-pandemic recovery markedly weakened from the pace of the past decade. Differences between regional metropolitan regions were minor. The New York Metropolitan area lost 1.7 percent of its employment between March 2020 and June 2022, which is slightly greater than the change in employment across all metropolitan areas.
New York’s northern suburbs had the weakest job performance (-3.5%), while Long Island had the smallest losses (-1.4%). New York City’s was slightly larger (-2.3%). Employment performance in the New Jersey-Pennsylvania portion improved, increasing by 0.2%.
Upstate Metropolitan Areas
Although the New York metropolitan area had significant job growth between 2013 and 2022, upstate’s performance has been much weaker. Albany-Schenectady-Troy (3.2%), Dutchess-Putnam (1.1%), and Kingston (0.2%) were the only metropolitan areas that experienced job growth in upstate New York. Every other upstate metropolitan area saw job losses between 2013 and 2022. Elmira lost more than 10% of its jobs in 2013, while Binghamton lost more than 8%.
Upstate’s economic performance over the past decade has been weaker than the average of all regional metropolitan areas. The median employment change for regional metropolitan areas was 3.7%. Nationally, the median difference was 8.3%. For upstate metros, it was -0.9%.
Since the COVID-19 pandemic began in 2020, employment in the upstate metropolitan area has declined by 3.4%. Although upstate’s recovery since the Pandemic has been weak, in many cases, the differences between the performance of upstate metropolitan areas and the median of regional metropolitan regions (-2%) have been minor.
The Watertown-Fort Drum area has experienced the smallest job losses (-1%) among New York metropolitan areas. Ithaca had the second-most minor loss (-1.9%). The weakest recoveries were seen in Elmira, which lost 6.9% of jobs, Utica-Rome, which lost 5.1%, Kingston, which lost 4.1%, and Binghamton, which lost 4%.
Unemployment Rates and Employment Change Diverge
The New York City area has higher unemployment than the rest of the state. Still, its employment growth over the past decade has been far more robust and is almost twice that of the regional metropolitan area average. Upstate New York counties, in most cases, had lower unemployment rates than the nation, but they also lost jobs. We would generally expect high levels of job growth to be associated with low unemployment rates, but that has not been the case here. The difference reflects the population decline and stagnation seen upstate and the population growth in the New York metro area.
Conclusion
Over the past decade, the New York metropolitan area, which comprises two-thirds of the state’s population, has experienced relatively strong job growth compared to other regional metros. Growth within the New York area has been concentrated in New York City, which saw job growth of more than 14% since 2013. Most upstate metropolitan areas experienced job losses between 2013 and 2022, except for three metros in the Hudson Valley: Albany-Schenectady-Troy, Dutchess-Putnam, and Kingston. However, even the growing upstate metros experienced relatively little growth, at 3.2% or less.
The recovery of New York’s metropolitan areas has differed since the COVID pandemic hit in March 2020. The New York metro area has performed slightly better than typical urban areas in the region, losing 1.7% of employment compared with a 2% loss across all regional metro areas. Even so, New York City’s unemployment rates are the highest in the state. The relatively high level of unemployment shows that the city has significant untapped workforce capacity.
Job changes in most upstate metros in the region lagged slightly, although Elmira, Utica-Rome, and Binghamton experienced significantly larger losses. At the same time, upstate metros have low unemployment rates, suggesting that there is limited opportunity for job growth, given the stagnant population of upstate areas.
Upstate’s lack of population growth is not unique – much of the northeast and middle Atlantic region saw relatively slow population growth. Most growth was concentrated around the northeast corridor between Boston and Washington. Like the rest of the nation, population and employment changes in rural areas and smaller metros have lagged behind those in major metropolitan areas.
Although several factors have contributed to the weak population and employment performance in places like upstate New York, one significant cause is the lack of opportunity they provide for people with relatively high levels of educational attainment.
Because income differentials for college graduates are greater in major metropolitan areas with higher percentages of them, it is difficult for most upstate rural and urban regions to retain them. The income difference between college and high school graduates is twice as significant in the top 10% of counties by the percentage of college graduates compared with the 10% with the lowest rate. Most places with high percentages of college graduates and large income differentials are in the New York metropolitan area. In many upstate regions, the median incomes of college graduates are relatively low.