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NYC labor market lagging behind U.S., with people of color seeing biggest losses

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New York City continues to bleed jobs in hospitality and retail as U.S. employment levels surpass those from February 2020, with low-income workers and people of color feeling the worst of COVID-19’s lingering economic effects, according to a new report.

The findings released on Thursday by the New School and two workforce development groups — the New York City Employment and Training Coalition and the Workforce Professionals Training Institute — paint a bleak picture of the city’s path out of the pandemic.

The report notes that the city’s unemployment rate was 6.1% in the third quarter of 2022, well above the 3.5% national unemployment rate.

Though employment levels have improved since the beginning of the pandemic, the city still saw 116,000 fewer payroll jobs last November than in February 2020, based on state and local employment data.

U.S. unemployment rates, meanwhile, have largely recovered. The country’s most densely populated city has been left behind largely due to job losses in industries that require in-person work — including restaurants, hotels and construction, according to the report.

“Hundreds of thousands more workers are experiencing economic hardships and the city does not expect to return to pre-pandemic job levels until late 2024, nearly five years after the pandemic’s onset,” said James Parrott, director of economic and fiscal policies at the New School’s Center for New York City Affairs and co-author of the report, in a statement.

The findings underscore pervasive issues exacerbated by the pandemic — including racial disparities in unemployment rates and the volatility of the job market in service industries compared to white-collar jobs. Employment in face-to-face industries like restaurants was roughly 9% lower in November 2022 than in February 2020.

“A decline of that magnitude is comparable to that in a severe recession, and this was 33 months after the onset of the pandemic,” the report reads. Meanwhile, employment increased in industries with remote work, like finance, insurance and real estate, as well as in the essential workforce, including health care employees.

Unemployment among Black residents surged to nearly 10% in late 2022, representing the largest jump in unemployment among people of color in the city. Unemployment rose to more than 7% for Hispanic and Latino residents, and doubled to roughly 5% for Asian residents.

Workers with a high school education or less were also 25% more likely to lose a job, as were households with incomes 200% below the federal poverty threshold.

“The city’s job losses as of the fall of 2022 — two-and-a-half years after the pandemic’s onset — stem mostly from the employment decline in lower-paid, face-to-face industries most immediately affected by public health business restrictions and subject to the lingering effects of changed commuting and hybrid working patterns,” the report reads. “These dislocations struck hardest at less-educated workers, many of whom are workers of color and young adults.”

Mayor Eric Adams has made the city’s economic recovery central to his administration’s agenda since taking office. Spokespeople for the mayor did not immediately provide comment.

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