Private Employment By State and Metro Area:  NYC Is Still in the Cellar, and It May Be About to Rain

The Bureau of Labor Statistics released re-benchmarked Current Employment Survey data last week, and the data shows that New York City is still trailing the rest of the country in recovering jobs lost during the COVID-19 shutdowns.  Only Hawaii is hurting as much, not surprising given that state’s dependence on the tourism industry.  The annual rebenchmarking process corrects the past employment data that was reported each month, based on the actual unemployment tax records of businesses.  Large-scale revisions are released each March.  Last year I found that New York City had lost more private jobs during 2020, the year of the COVID-19 shutdowns, than any other metro of significant size and (for those states without them) any state other than Hawaii.

And this year I find that NYC lags in recovering those lost jobs, with only Hawaii faring worse.  But NYC still has more private sector jobs than it had in any year prior to 2015, and there is a new positive trend in the Downstate Suburbs.

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I downloaded the data from the Bureau of Labor Statistics, here.

https://www.bls.gov/sae/

Using the “Series Report” data tool.  You can see the series, the data downloaded, and several of the charts in this post here.

Annual average data is the level of employment for each month of a year added together and divided by 12.  It is the best measure of employment, because employment varies seasonally, rising through June, falling in July, rising through December, and plunging in January.  The annual average is the data for a year.

Annual average private sector employment plunged from 2019 to 2020, as COVID-19-related shutdowns and supply chain problems exacerbated a debt-driven recession that was already starting in late 2019.   With re-opening and vaccination, there was snap back employment growth from 2020 to 2021.  But how have large metro areas and, for states that don’t have them, states fared for the entire period from 2019 to 2021?

The chart shows the biggest losers.  The biggest loser is Hawaii, with annual average 2021 private sector employment that is 13.0% lower than 2019.  New York City is next with a 9.8% decrease.  The entire tri-state area fared poorly, with the Downstate Suburbs (in this case including Orange and Duchess counties) down 6.7%, Connecticut down 4.9%, and New Jersey down 4.0%.  For metro New York as a whole, including portions of New Jersey and Connecticut, the decrease was 7.5%.  Meanwhile Upstate New York’s 2021 private employment was 6.8% lower than in 2019.  U.S. total private employment, meanwhile, was 3.3% lower in 2021 than it had been in 2019.

The Northeast in general fared poorly, with metro Pittsburgh’s 2021 annual average private employment down 6.9% from 2019, metro Philadelphia down 4.2%, metro Boston down 5.6%, metro Washington down 5.1%, and metro Baltimore also down 5.1%.  So did the Midwest, with metro Detroit down 5.7%, Chicago down 5.1%, Minneapolis-St. Paul down 4.9%, Milwaukee down 4.9%. and Cleveland down 4.7%.  And the West Coast, with metro San Francisco-Oakland down 6.8%, Los Angeles down 5.9%, Metro Portland down 4.7%, Seattle down 4.2%, San Diego down 4.1%, and San Jose/Silicon Valley down 4.1%.  

Hawaii wasn’t the only tourist-driven economy to be hurt, with Las Vegas annual average private sector employment 5.7% lower in 2021 than it had been in 2019, and Orlando down 4.2%.  But metro Nashville’s private employment was actually 0.8% higher in 2021 than it had been in 2019, and metro Tampa-St. Pete 1.4% higher. Oil and gas driven economies were clobbered in 2020, when the oil price actually fell below zero, and had not fully recovered in 2021, with private employment still 6.3% lower in Louisiana, 4.0% lower in Oklahoma, and 3.6% lower in metro Houston.  These areas will presumably fare much better in 2022, based on soaring oil and gas prices.  The biggest winner was metro Austin, with a 5.3% increase in private jobs from 2019 to 2021.

Looking at it a different way, U.S. private employment was 8.1 million lower in 2020 than it had been in 2019, but in 2021 the U.S. got 48.4% of those jobs back.  New York City, however, only regained 19.7% of the jobs it lost.  Even looking at all the MSAs and states, all of which are in the spreadsheet, it’s hard to find a place that fared worse.  

The San Francisco-Redwood City-South San Francisco metropolitan division, part of the San Francisco/Oakland MSA, only regained 10.9% of the private jobs it had lost.  Private employment in the District of Columbia was lower in 2021 than in 2020, as was the case in Danville and Kankakee IL.  Rockford regained just 6.2% of its losses, with South Bend, Indiana regaining just 5.6%.  But these are much smaller places.  

Along large metros and states, Hawaii regained just 26.1% of lost jobs, Pittsburgh just 21.1%, and Louisiana just 23.4%.

Would things be different just based on the month of December, measuring changes over the years 2020 and 2021 rather than from year-to-year?  Not much.

In December 2021, New York City still had 7.0% fewer private sector jobs than in December 2019, second worst among large metros and states behind Hawaii (10.6%).   Most of the other biggest losers are the same, including Upstate NY (-5.0%), Connecticut (-3.7%) and New Jersey (-2.1%).  Total U.S. private employment was 1.4% lower in December 2021 than it had been in December 2019 — and 1.0% lower in February 2022 than it had been in February 2020, prior to the shutdowns.  

There is a surprise among the winners, however.  In the Downstate NY Suburbs, private employment was 65,700 higher in December 2021 than it had been in December 2019, in contrast with a decrease of 291,800 in New York City.  The 8.1% increase for the Downstate Suburbs was right behind metro Austin at plus 8.4%. 

So the 1970s pattern — a flight from the city to the suburbs and from the Northeast to South and West — appears to have been re-engineered.  Work from home, soaring city rents, major transit improvements such as East Side Access for the LIRR and a new rail tunnel for New Jersey Transit combined with ongoing disinvestment in the subway, should add to the trend.  

So should the additional planned increases in taxes on and service cuts for city residents, to benefit those in the rest of the state and public employees from there who commute in to their city jobs, with the distribution between those two groups depending on who is elected Governor.  The last pension increase passed by the state legislature — for City of New York employees only to protect taxpayers and services elsewhere in the state — was just one of many indicators.

When it comes to recovering lost jobs, however, New York City is more in the middle of the pack when measured from December 2019 to 2020 and December 2020 to December 2021 — in part because it lost so many jobs to start with.  After having lost 562,000 jobs from December 2019 to December 2020, it gained back 48.1% of them from December 2020 to December 2021.  Metro Milwaukee only gained back 19.0% of its lost jobs over the latter year, with the states of Kansas, Oklahoma, Nebraska and Iowa also slow to recover their (smaller) losses.

Among the metro areas that gained more private sector jobs from December 2020 to December 2021 than they had lost from December 2019 to December 2020 are Salt Lake City, Austin, Charlotte NC, Dallas-Fort Worth, Nashville, southern California’s “Inland Empire,” Tampa-St. Pete, Phoenix, Indianapolis, and Atlanta. Miami-Fort Lauderdale-West Palm Beach, Orlando, San Antonio, and Denver all recovered at least 90.0% of their prior losses.  With the exception of declines in the oil and gas-driven states, declines that are likely to reverse this year, this is very much like the 1970s.  But by the end of the 1970s the Northeast had relatively affordable housing.

Classification changes limit the pre-1990 data available, but I do have a spreadsheet of total private employment that starts in 1950.

If any New York politician wants to blame COVID-19 — or the next recession — or the federal government — for tax increases on, service cuts for, and un-met needs of New York City residents, consider this.  In 2021 (annual average data), New York City still had more private sector jobs than it had in any other year prior to 2015 — and a high and rising tax burden.  More and more people have paid more and more money in, and been told they deserve less out, for two decades.  

We may be told crime is rising because there aren’t enough cops, judges and corrections officers, and they aren’t paid enough.  That our children can’t deserve to be educated because teachers are cheated out $billions.  That we deserve reduced and unreliable transit service, less in social services, dirtier parks and streets, less street maintenance, etc. etc. etc. because of low taxes and understaffing.  But New York City’s state and local government employment has barely decreased, and the cost per employee continues to rise.

New York City has always regained private sector jobs more slowly than it lost them.  And the shift to remote work and work from home is likely to permanently relocate some people and economic activity to places with better public services and lower taxes.  In fact, I’m willing to bet that the share of New York City public employees who live in the city is going to fall, as it did in the 1970s.  But there was still, even in 2021, enough of a population base, job base, and tax base that the people of New York deserved far better than they got — even if no New York City politician looking to have a career, or media source worried about social issues and federal elections, is willing to say so.  Except, in some cases, about police and corrections — and even that only in the past few years.

I’ll look at trends in total state and local government employment specifically in my next post.

1 thought on “Private Employment By State and Metro Area:  NYC Is Still in the Cellar, and It May Be About to Rain

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