Job Growth Soars in NYC, But for Whom?

| May 11, 2012 4:00 AM

Artist Bernard Safran shot this photo, "Subway Riders," in the late '60s, which shows a group of New Yorkers headed to work. Looking at a diverse array of data, MetroFocus looked at the kinds of jobs New York City is really creating. Photo by Bernard Safran.

The past week looks like a milestone for Mayor Michael Bloomberg’s legacy on job creation. New York City added more jobs in January than any month in the past 23 years, according to the Wall Street Journal‘s analysis of new Labor Department data, and 2011 job creation estimates turned out to be more than twice as high as originally stated. The mayor visited the set of SNL to announce the city’s $7.1 million, 130,000 employee film and television industry. And a new report says the city’s tech industry is indeed booming — something Bloomberg has been nurturing since his first term in office.

But while growth in certain industries and optimistic reports make for good news in a beleaguered economy, there are other factors that complicate the picture of job growth in New York City. Since the recession hit, many jobs that have been created pay fairly low wages and are held overwhelmingly by women and people of color. And many jobs within the largest private employment sector in the city — nonprofit healthcare and social services — are on the chopping block in the fiscal year 2013 executive budget.

And then there’s the city’s unemployment rate, which steadily inched from 9.1 percent in December to 9.7 percent in March, making it now 1.6 percent higher than the national average.

MetroFocus compared a slew of recent data on job creation to see what kinds of jobs we’re really creating and who’s getting them.

Surf’s up in the tech wave…especially if you’re a white guy

Since he took office, the mayor has promoted growth in the tech industry as a way to wean the city off of its dependence on the financial industry. His foresight paid off, particularly since the recession. James P. Brown, principal economist for the State Department of Labor, told the New York Times that ongoing Wall Street layoffs (300 in February) have been a major factor in the city’s unemployment numbers of late.

This graph, created by the Center for an Urban Future, shows that venture capital deals grew 32 percent in New York City between 2007 and 2011. In Silicon Valley, deals dropped 10 percent over the same period. Image courtesy of Center for an Urban Future.

After years of struggling to create the right “ecosystem” of interconnected academic researchers, venture capitalists and entrepreneurs, the mayor’s dream of a thriving “Silicon Alley” is coming to fruition. Bloomberg announced the creation of two new tech campuses, on Roosevelt Island and in Brooklyn, within the past year.

A new, highly detailed report by the think tank Center for an Urban Future serves as further validation. The report claims:

  • 486 digital start-ups have been created in New York City in the past five years, and New York has passed Boston as the second-largest growth city for tech jobs.
  • Venture capital deals rose 32 percent in New York between 2007 and 2011, compared to a 10 percent drop in Silicon Valley over the same period.
  • In the past five years, information technology jobs in the city have increased from 41,000 to 52,900.
  • Many start-ups report that they can’t hire engineers and programmers fast enough.

However, some critics have long derided the tech industry as a province of highly educated white males. To combat the stereotype, a number of organizations designed to promote tech entrepreneurship among women and minorities, like DreamIt Access, New York Tech Women and Girls Who Code, have sprung up. And in March, the research project Startup Genome found that women are twice as likely to start new companies in New York City (20 percent of new companies are started by women) as they are in Silicon Valley (10 percent). Even so, an assessment of the national technology workforce reveals figures that support the “boy’s club” critique.

Using research from the University of North Carolina, Mashable reported that only 5 percent of start-ups in the U.S. are owned woman-owned. Inc. reported that 25 percent of jobs in the technology industry are occupied by women. And according to research from CB Insights, African-Americans made up only 1 percent of internet company founders in the U.S. as of 2011. Asians made up 12 percent, and 87 percent of start-up founders were white.

These are, of course, national statistics. Neither the U.S. Bureau of Labor nor the State Department of Labor breaks down the  industry demographics enough to determine the specificities for New York City’s tech community — tech jobs can fall under the fields “professional and business services” or “information.” However, data from several other sources offers a clearer picture of what kinds of jobs have been created and are expected to be created in the city, who works them and how much those employees earn.

Job gain and losses in a post-recession New York

Between 2000 and 2010, the largest growth sectors in New York City were educational and health services, which grew by 21.9 percent and includes the tech industry among many other sub-industries, and the leisure and hospitality industry, which grew 23. 7 percent, according to data from the State Department of Labor.

A store employee arranges merchandise at opening of the Superdry store in Times Square. In 2011, the average retail salary was $34,673. AP/Richard Drew

However, a 2011 study by the Fiscal Policy Institute found that only jobs paying under $45,000 had experienced a net gain (69,000 jobs) between the start of the recession in 2008 and 2011. And in January, an Independent Budget Office (IBO) projection estimated the city would create 39,000 jobs in 2012, and another 50,000 in 2013, but warned, ““the jobs we’re regaining don’t pay nearly as well as many of the ones we lost [to the recession].”

While the point about low-wage jobs significantly outpacing mid- and high-wage job creation still holds water, some startling new data suggests job creation might actually be much higher in 2012 and 2013 than originally predicted, and that higher wage jobs are making a come back.

The latest economic snapshot by the New York City Economic Development Corporation says that private employment in New York City rose by 11,100 in February, after an increase of 25,300 jobs in January. That’s huge. Based on the Wall Street Journal‘s analysis of those numbers, which includes seasonal adjustment, about 31,200 jobs were actually created, though the adjustment includes a lot of part-time holiday work. Crain’s pointed out that many of those jobs probably went to commuters.

Sectors with the highest job gains in 2011

Most surprisingly, new Labor Department data estimates the city added 85,300 private sector jobs in 2011, far higher than the 36,500 jobs originally estimated by the real estate investment firm, Eastern Consolidated. The new Labor Department numbers are preliminary, and in many cases only includes the broadest industrial categories, like “leisure and hospitality,” as opposed to sub-sectors like “retail.” That said, growth estimates from previous years, as well as information from other studies, suggest where the growth might be within a given industry.  Men usually earned more than women in the following New York City job growth areas.

    • 22,000 new jobs in professional and business services. This includes a wide range of jobs in addition to the tech industry. The Independent Budget Office projected large increases in the sub-sector of professional and technical services, an area where the average annual salary was $109,500 in 2010. It’s likely that a significant, but smaller number were in administrative and support services, where the average salary was $50,400 in 2010. According to 2011 Census data for Greater New York (the data includes New York City, northern New Jersey, Westchester and Long Island), 65.8 percent of professional, scientific and technical service employees were white, 8.87 percent were Latino, 9.2 percent were black and 12.5 percent were Asian. And according to U.S. Census data from 2010, on average, men in the professional services industry made $1.20 on average for every dollar made by women.
    • 19,600 new jobs in the leisure and hospitality industry. This includes jobs in hotels and the tourism trade, where the average salary was $28,585 in 2010. Given growth patterns between 2008 and 2010, it’s likely that most of these jobs were in the food and drink industry, where the average salary was $24,500 in 2010, and retail and wholesale, where the average salary was $34,673 in 2010. According to a 2012 report by CUNY and the Retail Action Project, over half of New York City retail workers earned under $10 per hour, and 29 percent receive healthcare benefits. Of these workers, 37 percent were Latino, 32 percent were black, 16 percent were white, 5 percent were Asian, 10 percent were mixed race and 1 percent defined themselves as “other.” According to U.S. Census data from 2010, women’s median earnings in the food and accommodation sector — which does not include retail — slightly exceeded men’s in New York City. According to 2011 Census data for Greater New York, food service and accommodation employees were 43.9 percent white, 21 percent Latino, 12.7 percent black and 15.6 percent Asian.
    • 12,000 new jobs in the finance industry. Of this surprising growth, the Labor Department estimates that 6,6600 of those jobs were in securities and commodities brokerage, and 3,000 were in banking. In New York City, the average finance worker’s salary was $260,986 in 2010, but real salaries vary widely depending on sector and position. According to 2011 Census data for Greater New York, 63.1 percent of finance employees were white, 9.1 percent were Latino, 10 percent were black and 14 percent were Asian. According to U.S. Census data from 2010, on average, men in finance and insurance made $1.57 for every dollar made by women.
    • 11,700 new jobs  in educational and health services. This is the largest sector of private employment in the city. Private healthcare jobs, which had an average annual salary of $54,000 in 2010, grew 1.7 percent, with the largest growth among home healthcare workers (8.4 percent). The largest job increases in private education in 2011 were in elementary and secondary schools (5.5 percent), which had an average annual salary of $52,600 in 2010, and child day care services (4.5 percent), where the average salary was $27,788 in 2010. According to 2011 Census data for Greater New York, 39 percent of healthcare and social assistance employees were white, 14.9 percent were Latino, 29 percent were black and 10.61 percent were Asian. According to the same data, 64.6 percent of education service employees were white, 10.25 percent were Latino, 12.6 percent were black and 8.1 percent were Asian. According to U.S. Census data from 2010, on average, men made $1.10 for ever dollar earned by women in the education services industry. While the wage gap was 130 percent in healthcare and social assistance.
    • 4,600 new jobs  in the information sector. This includes film, radio and television, many parts of the social media industry, and publishing. The average salary in 2010 was $107,815, but as with finance, the salary range for these jobs is particularly wide, and includes everything from publishing assistants to television CEOs. According to 2011 Census data for Greater New York, 68.2 percent of information employees were white, 7.9 percent were Latino, 12.6 percent were black and 7.7. percent were Asian. According to U.S. Census data from 2010, on average, men earned $1.22 for ever dollar earned by women in the information sector.

      Cuts threaten the city’s largest private labor sector, which employs mostly women and minorities

      New Yorkers protest budget cuts to health care and human services in the Bronx on May 9. According to the Fiscal Policy Institute, the nonprofit healthcare and social assistance sector is the largest private employer in the city. Flickr/WeNews

        On May 7, the Fiscal Policy Institute released a report that says the nonprofit healthcare and social assistance sector is the largest private employer in New York City, which includes workers in home healthcare, community food and housing services, nursing care facilities, vocational rehabilitation services and child day facilities — everything but for-profit hospital and doctor’s office employees, essentially. Between 2000 and 2011, the sector grew by 20 percent, adding 79,000 jobs. In 2010, there were 492,300 employees in this sector, 80 percent of whom were women, and 80 percent of whom were African-American, Latino or Asian. The highest number of jobs in this sector, 39 percent, were located in the Bronx.

            Bloomberg’s $68.7 executive budget for the fiscal year 2013 calls for$175 million in cuts to child-care and after-school services. This will mean cuts to thousands of nonprofit healthcare and social assistance jobs, and a loss of services for 47,000 mostly low-income children.

            • Buck Biro

              I think one of the most important statistics in this article pertain to NYC’s lack of mid-high paying jobs and overwhelming growth in low wage work.  The author cites contradictory data from the NYCEDC, but it’s obvious to at least a knowledgeable few that the NYCEDC is essentially a marketing firm for the City, which makes their data consistently flowery (can’t make the client look bad after all).  In other words, I’m not buying that there are a whole lot of additional decent paying jobs coming to the City.  If I’m NYC, I’m worried that the existing struture of serfs and lords is going to get worse for the serfs via less job opportunities and lower pay.  Soon, the City will be the well off, and the two groups that will work to serve the high-income earner; the working poor (foreign or domestic) and the post-college transient living in the City for a few years.  This means no middle class in 10-15 years.  Big problem. 

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