New York City's Still-Shaky Economy

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Brian Lehrer: It's The Brian Lehrer Show on WNYC. Good morning, everyone. What do government employees and people who work in television and the movies have in common? Answer: both sectors are gaining jobs in the New York City area right now. But how are those government employees and TV and film workers different from other people around here? They're more likely to be employed at all.

The news organization, THE CITY, notes that while the US as a whole has regained 90% of the jobs lost during the pandemic, New York City has recovered fewer than half the jobs lost here. That's around 470,000 fewer people employed. Or as business and economics reporter Greg David writes; New York City's recovery crashed into a pothole in July, with a decline in jobs for the first time this year amid more displays of the disproportionate impact of the pandemic recession on Black and Latino workers.

One piece of more bullish economic news. Google's $2 billion real estate buy in Lower Manhattan this week is the latest indication that the tech sector still sees New York as a growth market. According to The New York Times, Google plans to add around 2,000 more jobs in the city. Other major tech companies are also projecting job growth.

One more thing to set this up before Greg David joins us. There's a political story about the New York City economy right now, not just a dollars and cents one. The likely next mayor, Eric Adams, took a swipe at the outgoing mayor, Bill de Blasio, at a business conference last Friday, when he told the audience this:

Eric Adams: This is going to be a place where we welcome business and not turn into the dysfunctional city that we have been for so many years.

Brian Lehrer: But are we that dysfunctional and is the difference just talk?

With me now is Greg David, business and economics contributor to the nonprofit news organization THE CITY, and director of the Business & Economics Reporting Program at the CUNY Graduate School of Journalism.

Hi, Greg. Thanks for joining us. Welcome back to WNYC.

Greg David: Good morning. Thanks for having me, and I'm very happy to be back.

Brian Lehrer: We'll get to Eric Adams and hear another clip from that speech where he dings de Blasio, but let's start with the first words in your recent article: New York City's recovery from the pandemic recession came to a screeching halt over the summer. What sectors were most affected?

Greg David: Well, the sectors that are most affected, of course, are leisure and hospitality. That's where we've suffered the most but in fact, virtually all sectors stopped adding jobs over the summer; with the exception of the two you named, government, and movie and TV production. As you gave all the numbers, it's really a bad story because New York was hit harder in the pandemic recession than virtually anywhere else. We have either the worst or the second worst recovery of any major city in the country. Our unemployment rate remains almost double the national average.

The summer was supposed to be when we were laying the groundwork for a major gain in the fall, but as everybody knows, the office workers did not come back after Labor Day in any significant numbers, and it's unclear if they're going to be back in significant numbers before the end of the year.

Brian Lehrer: Why would jobs have been lost, though, rather than just come back more slowly as the Delta variant made people wary? Those office workers, they're working from home so they're still employed, but there are still many more things open than there were six months ago, aren't there? Why would jobs have been lost this summer rather than just be coming back more slowly?

Greg David: Well, I think that there was actually-- It's not a huge number of job losses, but I think there's been some turmoil in the leisure and hospitality sector and restaurants. Restaurants, of course, are complaining bitterly that they have major staffing shortages. It's really a good question as to why we actually saw a decline, but we did. There's a little leakage in finance. There's a little leakage in business services. It's pretty worrisome because we have so far to go.

Brian Lehrer: Your article about the July numbers in particular said, New York City loses jobs-- This is the headline: New York City loses jobs as the pandemic recession takes growing toll on workers of color. Can you talk more specifically about the disparate impact?

Greg David: Well, the disparate impact is that the unemployment rates for Black and Hispanic workers are very high, much higher- I think they're significantly higher than for white workers, and that's just the nature of this downturn. It's so unusual. When you have a recession, it usually cuts across all sectors and all types of people. White-collar workers lose their jobs, executives lose their jobs, lawyers lose their jobs, as well as people who work in retail or work in hotels or work in restaurants.

This recession is so different, so unequal, that office workers have kept their jobs. Wall Street is doing spectacularly. Pay is up on Wall Street. The people who were hurt the most, who tended to be heavily Black and Hispanic workers, worked in restaurants. They worked in hotels. They worked in what James Parrot the economist calls face-to-face jobs, and those are the jobs that disappeared and have not come back.

Brian Lehrer: Some of the numbers there from your article. The unemployment rate for Black New Yorkers is four percentage points higher than for whites, and Latinos have a seven-point-higher unemployment rate compared to whites. That even college degrees don't narrow that gap. Why do you think that part is true?

Greg David: Well, that's a very interesting thing that I didn't know about until a month ago. Do you know that something like 40% of Black college graduates work in low-wage professions? I found that to be a startling fact when I wrote about it a couple months ago. I think that's part of the issue here. Also of course, recent college graduates have had a hard time getting going in this recession.

Brian Lehrer: There's pandemic disparate impact multiplied by underlying structural inequality that proceeded COVID.

Greg David: Absolutely.

Brian Lehrer: Listeners, help us report the story of jobs in and around New York City. Even as most of the talk is about recovery, did you get laid off from a job this summer? 646-435-7280. Curious to know what industry that was in if you got laid off recently. 646-435-7280. Employers, we did a call-in for you recently about job openings you can't fill. Remember that? How about jobs you have recently had to eliminate, or on the upside, recently created? You can talk about that too. We're trying to report the full picture.

Workers and employers, where are you seeing economic growth in our area and where are you seeing layoff? 646-435-7280 or tweet @BrianLehrer. We'll watch our Twitter feed go by with Greg David, business and economics contributor to the nonprofit news organization, THE CITY, and director of the Business & Economics Reporting Program at the Craig Newmark CUNY Graduate School of Journalism. 646-435-7280.

Greg, you also compare New York City to the nation. For example, in July New York City lost 14,000 jobs, while the rest of the country saw its strongest employment growth in a year. Can you compare and contrast?

Greg David: Yes. Well, the country is adding jobs in lots of different ways. Restaurants are back in many parts of the country. Tourists are traveling to places like Florida and therefore, those states are recovering. The whole point, the whole problem in New York is that our economy became very dependent on tourism.

It was the great success story actually of the last decade. We built this tourist industry that employed about 300,000 people, offered many good jobs and other pretty good jobs mostly to people without college degrees. Our tourism industry was, of course, decimated by the pandemic and because we get a significant number of our tourists from abroad, it hasn't bounced back. That's why we are lagging the rest of the country.

Then there's the great office worker problem. This economy is built on having 400 million square feet of office space occupied, driving the economies of the central business districts, especially in Manhattan. At the moment, we think somewhere in the neighborhood of 30%, maybe at the most 40% of those workers are back. The restaurants may be open, but they don't have the lunch business that they would. All the people who are based- whether they're in the Dunkin' Donuts that I like to go to in the morning or the places I want to go get lunch, just don't have the business that they used to have.

Brian Lehrer: With that Dunkin' Donuts product placement in the rear view mirror-- Just kidding. Vicky in Tudor City, you're on WNYC with Greg David. Hi, Vicky.

Vicky: Oh, good morning. I just want to make the comment that there's loss from the top of the economic sector too. Because there was a major exodus, at least from Manhattan and probably from other boroughs, for people who have second homes. From my limited knowledge of the Hamptons, they're staying there. They have ancillary workers working for them. Dog walkers, housekeepers, child care, drivers, things like that. Then also a certain sector within that sector are people who work in offices and employ other people, and they're not showing up back either.

Brian Lehrer: Vicky, good point. Greg, I'm sure you would agree.

Greg David: Yes, there was a significant exodus. We actually do think many of those people have come back. Especially as schools reopened especially this year, they've come back because their kids are in school. You can see that in other numbers too. Apartment rents have started to rise again. Leasing activity is very strong. Condo sales have picked up again.

Yes, it was a very significant problem. Some of them are staying, but a lot of them have come back.

Brian Lehrer: Is it an indicator of how many are staying away? That also from your article; within New York State, you note that the rest of the state is outperforming the city in jobs - I guess that's in new jobs - the opposite of before the pandemic. How would you compare and contrast there?

Greg David: Well, it's just that tourism and office workers aren't such a major factor outside the city. One number I used is sales tax increases. Sales tax has increased outside the city by at least double digits everywhere in the state, but only by about 7% in the city; just another sign of how our economy is not recovering. The suburbs are doing much better, of course.

We've discussed this on the show in the past. Some people say, "Well, it'll be fine because everybody is working at home and we're just transferring the economic activity from the business districts to the neighborhoods," but 30% of the New York City workforce is commuters, and those people are spending the money outside the city. That's where we're really having, I think, the significant loss.

Brian Lehrer: We recently had the mayor of- I'm trying to remember which town it was exactly, I think Middletown, New Jersey, who noted that local businesses there in many cases are doing better than before the pandemic for exactly that reason. It's a commuter town and people are staying home who are employed.

Robert in Newark, you're on WNYC. Hi, Robert.

Robert: Hi, thank you for having me on. One of the consequences that we've seen - I work for an office services company - with offices being closed and no office workers in there, all the equipment that is used, copiers, postage machines, coffee makers, and so forth; all of these pieces of equipment have gone idle. The people who depend on them for a living, say a copier company charges per copy for supplies and so forth, the revenue is not realized from that anymore, and the people who service this equipment no longer have something to service because everybody is working from home and they're not in the offices. It's another layer of this that affects us.

Brian Lehrer: Thank you very much. Yes, an interesting corner of the economy that we don't talk about very much; machine service industry.

Greg David: It's just that the lack of office workers is just rippling throughout the business districts and the economy, and the question is where we're going to go from here. How many people are going to come back? Is remote work permanent? Et cetera. Cushman & Wakefield has estimated that the demand for New York City office space will permanently decline by 9%. Now, they told me that that won't be so bad, but when I talk to landlords of major office buildings, they say 9% is a really big deal. It's going to affect tax revenue. It's going to affect the value of the buildings.

I don't have any answers here because I don't know where we are going to be about remote work a year from now or when, or maybe I should say if the COVID pandemic is over, but I do know that if we don't get the office space filled, we will not be in good shape in New York.

Brian Lehrer: Well, maybe this is where we should bring in the Google real estate buy story. Then also we'll get, in a few minutes, to the political connection to the economy with another clip of Eric Adams seeming to rap de Blasio without saying his name.

Google and its big real estate move along the Hudson River near Hudson Street. The New York Times frames its story as: while Manhattan has record office space vacancy levels during the pandemic, the four firms that make up so-called Big Tech - Amazon, Apple, Google, and Facebook - have staked a bullish position on the future of New York, even while most of them are planning for a more work-from-home future.

How would you frame it?

Greg David: Well, that's absolutely true, but the Google story is the most over-hyped story of recent months. That's because Google had already leased all the space in the building. The only difference here is instead of paying rent, Google decided to buy the building. They were always going to increase their heads count. They were always going to go to 12,000 people. There's no addition here. [crosstalk]--

Brian Lehrer: Though, there is a long-term commitment implied, right?

Greg David: Yes, but the lease was probably for 10 years too. I don't know. Look, the point is right. Tech is an enormous part of New York City's future. The Big Tech companies are staying. We have an enormous number of startups. Billions of dollars in venture capital is flowing into the city. Tech is really important to us and it's a good sign. What would really have been a disaster is if Google had walked away from it.

The things I'm watching are JPMorgan Chase's decision to go ahead and build its new headquarters on Park Avenue. If they were to change course, it would be a devastating blow to the economy. I say they are continuing, actually Jamie Dimon says different things at different times, but I think he wants everyone back in the office.

Then there are two major office towers going up. SL Green is spending almost $3 billion to put a new office tower in Flatiron called One Madison. A group, RXR and TF Cornerstone and Hyatt, are tearing down Donald Trump's once-famous Grand Hyatt to build a mixed-use facility that will have a hotel but will mostly be office space. Both projects, as far as I know, are committed to going ahead.

That's really what we need to watch. That shows that those people are willing to put billions of dollars on the line with speculative building; that they have confidence in the New York City economy.

Brian Lehrer: Yusuf in Newark, you're on WNYC. Hi, Yusuf. Thanks for calling in.

Yusuf: Hi, Brian. Thank you so much for taking my call. I just want to share- actually, I just want to weigh in in the disproportion between Black and white in terms of the job loss. I just want to add one more component, which is probably the age. I'm a civil engineer. I was working in the minority-owned company. In my civil department, we were seven of us. I was the only Black.

When it comes to laying off, because most of my projects were New York City projects, so New York City shut down, there was no work, so they have to layoff. In my department, I was the, let's say, number four guy in terms of the hierarchy, but when it comes to laying off, I got laid off. The other person that was laid off was Indian but he was an older guy. Even though he was with the company for a very long time, he got laid off.

I just want to add in the age component in this one here. Even though there's race there, the age component adds to the loss of jobs during the pandemic.

Brian Lehrer: Greg, what are you thinking, listening to Yusuf? I think this probably- despite age discrimination laws, probably goes on across economic sectors. When a company needs to downsize, if they can lay-off their older, therefore presumably, higher-paid workers, they're going to take that opportunity.

Greg David: That's true and that does happen, but the statistics say exactly the opposite. The most damage has been done to young people. Young people have the highest unemployment rates, young people are not finding jobs, young people are dropping out of the labor force. This recession is working very differently. I think a lot of that would happen in white-collar jobs, in professional jobs; and of course, there have been so few cutbacks there.

Brian Lehrer: Yusuf, thank you very much. Another one about age, though, I think. Betty in Nassau County, you're on WNYC. Hi, Betty.

Betty: Hi, good morning. Thank you for taking my call. I'm calling because I-- Actually, it just seems to be that it's the same issue that the gentleman before me mentioned. My husband, after working at the same job for 27 years, being their superstar, them saying you'll never get laid off; the pandemic happened and he was one of the first to be laid off. He's 62 years old, and several people were called back - younger people without his seniority. He's one of the most senior people working at his job. He's working as a skilled modelmaker, which is someone that does prototype engineering designs for a prestigious company.

Brian Lehrer: Betty, thank you very much. We're going to go right on to another caller. Nikki in Manhattan, you're on WNYC. Hi, Nikki.

Nikki: Hey, Brian. Great to be on this show again. I'm in healthcare. I'm an X-ray and mammography tech. What I'm seeing is that we've lost a lot of people, whether it's either they died from COVID, they left the city or they retired, so there are a lot of openings in healthcare. What's been going on with my situation is that I've been getting a lot of calls from headhunters who see my résumé on Indeed, and I've been fielding these calls. It's been really exhilarating because now we're in the driver's seat when it comes to which jobs we accept and which jobs we turn down.

Brian Lehrer: Are the wage offers going up with the shortage?

Nikki: Oh, yes. Absolutely.

Brian Lehrer: Nikki, thank you very much. Interesting call, Greg, from an X-ray technician.

Greg David: Yes, and we definitely know that many people are in the driver's seat, that many jobs are hard to fill. She mentioned something that's very important; a lot of people have decided to retire. There's a tremendous movement of people in their late 60s, mid-60s or even a little younger than that, to say, "You know, working isn't what it's cracked up to be. I do have enough money. I'm going to retire early." We have seen a significant decline in those workers remaining on the job.

Brian Lehrer: We're going to take a brief pause here. When we come back, we're going to play another clip of Eric Adams speaking at a business conference last week, saying things are going to be better for businesses, assuming he's elected mayor; kind of a backhand, back of the hand to Bill de Blasio. I'm going to ask our guest, business and economics journalist Greg David, whether he's really saying anything that's so different from what de Blasio does.

Listeners, we can add phone calls on this too. In particular, anybody, let's say, business owner looking for the next mayor, presumably Eric Adams, to change things in a particular way. 646-435-7280. We'll continue after this.

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Brian Lehrer: Brian Lehrer on WNYC with Greg David, business and economics contributor to the nonprofit news organization, THE CITY, and director of the Business & Economics Reporting Program at the Craig Newmark CUNY Graduate School of Journalism. We're talking primarily about Greg's recent article on New York City losing jobs this summer, even as the rest of the country gained jobs.

Before we get to that, Eric Adam's clip and the politics of some of this. We were asking for people to call in and talk about what sectors of the economy you may have just gotten laid off from. Let me take a few more of those that just came in just to help us report this story. Mary Ellen in Washington Township, you're on WNYC. Hi, Mary Ellen.

Mary Ellen: Hi. How are you? Hi, Brian.

Brian Lehrer: Good.

Mary Ellen: I'm in the trade show industry and back in March 20th, they pretty much shut down our company. It's approximately 50 people, so it's anywhere from designers who design graphics or booths, to trade show coordinators, to people in the warehouse who do shipping, receiving and pack up the booths for trade shows. Our industry, I felt, really got hit hard and also affects so many other industries, like the hospitality industry and whatnot.

I was just trying to see-- We haven't been called back. We actually got officially laid- our jobs ended in September of 2020, but I'm hearing a few of my coworkers are picking up, the sales guys who were working from home; but I just was wondering, anybody seeing any movement on that industry? [chuckles]

Brian Lehrer: Yes, it's a good one to point up. I know we reported the story when-- I think it was the Auto Show. Greg, do you know if I'm remembering the right thing? The Auto show in New York that was supposed to take place around now, but because of the Delta variant- and it was going to be the big return of the Auto Show, but with the Delta variant, they canceled it. I have a friend who was supposed to fly in from San Francisco for a round-number high school reunion. That got canceled. It's not a trade show, but it's another thing that affects event spaces like trade shows would be in. That's an interesting indicator too.

Greg David: Yes, the Delta variant and the rise in cases clearly has been this huge roadblock. We thought we were going to be starting to do in-person events, we thought business travel was going to pick up some, and that didn't happen. It's the story that we're all facing. We need to get everyone vaccinated to see these cases decline.

I will say that I did look at the numbers and both nationally and in New York, there is some signs that this wave is ebbing. They're early signs, but let us hope that it does ebb because you're right. Trade shows, business travel, and a pick-up in tourism are the things we need.

Brian Lehrer: Fannie in Brooklyn, you're on WNYC. Hi, Fannie. Thanks for calling in.

Fannie: Hi. Thank you for taking my call, Brian. I'm a restaurant worker, and I've been laid off since March 2020. I work in a private club in Manhattan, and a lot of our members are from all over the world. A lot of them either cannot come into New York or they've moved to their second home, so our business has declined considerably, and I really don't know when I will be going back to work. They have opened up, but they really aren't busy enough to have me come back yet. Although, I do have almost 20 years of working there.

I recently went for a couple of job interviews and I would have taken them, but the contribution to healthcare was so expensive that I had to decline. Had we had universal healthcare, I probably would have taken a position, but right now, I'm still unemployed.

Brian Lehrer: Fannie, thank you for your call and good luck to you. I guess that's a wrinkle of the hospitality industry, Greg, private clubs.

Greg David: Yes, but I would say that all the restaurateurs who are listening to this are going ballistic at the moment because there are so many restaurant jobs that are going begging. Restaurants say that their biggest problem is they can't get enough staff to increase their business. I think the story is a little more complicated than that, but there is no doubt that there are an enormous number of restaurant jobs available.

Brian Lehrer: If you take Fannie's story at face value; the restaurant jobs are available to her, but the wages aren't enough to make up for the high dollar amount that she would have to pay contributing to her health insurance. So, the wages would have to go up with this shortage of workers in the hospitality industry, and yet maybe the margins are too small.

Greg David: They are raising wages, though. Every restaurateur I've talked to has raised wages. Now for the people who work on tips, it's a little more complicated because maybe there aren't as many patrons there every day that there used to be, et cetera. I would wonder whether she works in one of the few places that is unionized, and that makes a very big difference for her.

The hotel workers who are for the most part unionized by one of the city's most- and belong to one of the city's most powerful unions haven't gone out to find other jobs because they believe that they will get their jobs back. When hotels do reopen, all their workers come back, they have no trouble hiring. That's a little sidelight on this [crosstalk]--

Brian Lehrer: That's really interesting, the difference between hotel workers and restaurant workers, even though we think of them as being related in the hospitality industry. This has to do with unionization, you're saying?

Greg David: Absolutely. The Hotel Trades Council has unionized the vast majority of hotels, and when the de Blasio administration finishes work on their promise, we won't build another hotel in New York that's not unionized because every hotel is going to need City Council approval. If you look at the wages, there's a good-- James Parrot at The New School just put out a really good report on the hospitality industry. The average wage in a hotel in Manhattan is something north of $55,000 a year. Those are pretty good salaries. They're a little bit above the median for the city. That's what's going on there.

Brian Lehrer: You also noted in one of your articles that while the pandemic recession has been harder on women than men overall, public sector unions largely prevented that gender gap from taking root there. What are some specifics about that?

Greg David: Well, New York has the most unionized public sector in the country. The unions are very strong. Only 3% of unionized women in the public sector in New York City lost their jobs in the pandemic. The majority of those people work in education. The UFT did a lot to make sure their members stayed employed. Of course, they were a major partner in getting the schools open last spring, keeping them open today. Very important little sidelight on what's happened.

Brian Lehrer: Here's Roz, a chef in the East Village, who wants to back up our last caller, Fannie, he says. Hi, Roz. You're on WNYC.

Roz: Hi, Brian. Thanks for taking my call. This is the second time in a couple of weeks and it's the same issue. Yes, I work at a club in Midtown, and they're really dragging their feet reopening. Maybe one day a week we get to work as union employees, or maybe three days a week if we're lucky. I think this is a call-out to Governor Hochul that not everyone should be available for unemployment again, but a few people in our industry in particular.

Brian Lehrer: Thank you, Roz. I hear you. All right. Politics, as he brings up Governor Hochul, in our last few minutes. Eric Adams said in his speech to a business group last week that if elected mayor, he will welcome business in contrast to the dysfunctional city it has been for many years - it's the way he described it. Then he said this:

Eric Adams: Government must do its job to create an environment for growth that includes lower crime. We have to curb COVID, fewer homeless as you see on our streets, greater affordability and partnership with the business community.

Brian Lehrer: Greg, is that just rhetoric from a candidate, or is he proposing specific different policies from Bill de Blasio that the business community is waiting for?

Greg David: Well, I can't answer that question because I've been asking for an interview with him for weeks so that I could put those questions to him, and they don't seem interested in having me talk to him. I guess I will say I don't know, but this is what I do know. The business community in large measure saw Bill de Blasio as hostile; that he didn't care about them, that he wouldn't listen and that he shoved their concerns to the side. When after Adams gave that speech and I talked to people in the business community whose views I track, all of them said that this was good news, they were really looking forward to Adams, and they believe him on this.

He does have a track record. He has been a reasonably, fairly pro-development borough president and like the things he said, business leaders say the same things to me. Their workers are afraid of the rise of crime. Their workers are afraid of the subway. Their workers are unhappy coming to work and navigating their way to the offices through the increase in the number of homeless.

He has struck a nerve. There are a lot of people waiting with bated breath for him to win in November and become the next mayor. Whether he has substantive policies, I can't answer that.

Brian Lehrer: De Blasio has a reputation among many Progressives of talking like a Socialist, but then giving real estate developers so much leeway to build market-rate housing and forcing city employees back to their office jobs at the request of the office building landlords and other things like that. Same thing on crime, which Adams referenced in that clip. Progressives say de Blasio came in as a reformer, but is basically doing the things that Adams suggested in his campaign or suggests in his campaign that he would do to the activists' chagrin. TBD if there's a there, there, or a difference there.

Greg David: That's a good point, but people are forgetting the first term of Bill de Blasio where lots of things did take place. He was a key player in getting the minimum wage to $15, paid sick leave, universal Pre-K for four year olds. He did a lot of progressive things in his first term. As for the rest, his affordable housing program has been very ambitious.

I'm in the camp of many people who believe you can't have a strong economy without growth. It's very expensive to build in New York. I just wrote about the rezoning that's coming in Gowanus. If we don't build in Gowanus, there won't be enough money to clean up the superfund toxic site in the neighborhood. If we want to diversify our economy and have less residential segregation in New York, we're going to have to build in places like Gowanus, which is becoming increasingly white and wealthy.

Brian Lehrer: Greg David, business and economics contributor to the nonprofit news organization, THE CITY, and director of the Business & Economics Reporting Program at the Craig Newmark CUNY Graduate School of Journalism. Greg, thanks so much.

Greg David: Thank you, Brian.

 

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