New York City’s economic outlook for 2024 is as follows: prediction Economic growth is slow, there is no recession, and it is a typical “soft landing” situation.
But the less good news for the five boroughs is that slowing growth means a “rapid take-off” of the economy is not possible, still leaving many people behind. A prominent research group also found that some indicators of a city’s economic health have become more concerning since the pandemic, including median income, poverty, income inequality, and race-adjusted unemployment rates. That’s what it means.
James Parrott is director of economic and fiscal policy at The New School University. New York City Issues Centeris known for its deep dive into a city’s economic situation, focusing on the people who make up the bulk of the numbers. He and his colleagues say that while the city is barely recovering from large-scale job losses, era of pandemicits recovery has been uneven and there is little to suggest that the score will change in 2024.
“It’s not a very bright outlook, but it’s not a completely bleak outlook either,” said Parrott, who has spent more than 30 years analyzing the city’s economy and making recommendations. “What we are missing: We do not have the mechanisms to ensure that prosperity is shared equitably.”
“As a result, the prosperity we are experiencing is highly uneven,” he added.
Gothamist recently spoke with Parrott about the city’s economy and what’s in store for 2024. He has some weight in the public policy arena, having held positions as chief economist for state comptrollers, local governments, and government agencies. the Fiscal Policy Institute, a local think tank;
Here are his outlooks in some key areas:
Increased employment – but in low-paying jobs
New York City recently Best ever According to City Hall data, 4.7 million public and private jobs have been created, including 946,000 jobs lost to the pandemic.
But Parrott says most of the job growth is his own. low wage sector We contribute to economic development through home medical care and social services. He said in the first 11 months of 2023, the city added 38,000 jobs in home health care and another 18,000 jobs in social assistance. Meanwhile, the media and information technology industry lost 28,000 jobs, and the finance and insurance industry lost a further 6,000 jobs.
Parrott said job growth next year is not expected to be as strong as in 2023, and the trend toward lower-wage jobs will continue. “The mix of jobs based on pay is getting worse,” he says.
Increase in long-distance commuters and remote work
urban unemployment rate, It’s currently above pre-pandemic levels and the national average, but it’s unlikely to drop significantly, Parrott said. The local unemployment rate in October was 5.4%, compared to 3.9% nationally.
Parrott highlights some worrying details behind the employment numbers. This is due to an increase in the number of commuters from outside the five wards and an increase in remote work. In New York City, commuters have 100,000 more jobs than they did three years ago, while New York City residents have 100,000 fewer jobs than they did three years ago.
Parrott said some of the commuters may be former New Yorkers who moved out of the city, which could be a boon for local employers who are able to retain workers.
“But it’s not good for New York City’s economy in the sense that that revenue is not being spent in New York City to the same extent as before,” he says.
Poverty grows and inequality grows
Further signs of trouble appear in wage data.
“People in the bottom half are losing ground,” Parrott said. “And at the same time, the top half of the population, especially the top 10% and top 1%, are thriving like never before.”
The city now has the highest income inequality of any major city in the nation, as many workers lose their economic footing and few can afford a home. Parrot analysis is shown.
The new coronavirus infection is a factor. The center’s research found that poverty rose at the height of the pandemic as median incomes fell and the city’s highest-paid workers saw their wages rise the most. the study.
From 2019 to 2022, New York City’s poverty rate increased by 2.3%, the highest increase of any major city, Parrott said. Almost one in five New Yorkers (18.3%) had an income below the federal poverty line in 2022: $13,590 for an individual and $27,750 for a family of four.
At the same time, 2021 saw a historic increase in the number of billionaires in New York City. From 2019 to 2022, workers in the city’s higher-income industries saw wage increases more than four times that of workers in lower-income industries, Parrott said. income industry, report According to Lauren Melodia, an analyst at the center.
Parrott doesn’t expect the wage landscape to change significantly in 2024.
Racial disparities in data
The city’s economic outlook worsens when racial disparities are taken into account.
According to Parrot analysis, New York City has the largest unemployment gap between black and white New Yorkers this century, including during the Great Recession. In the third quarter of 2023, 7.6% of Black New Yorkers were unemployed, compared to 3.7% of white residents.
Wages are a further concern. The city’s median household income in 2022 was down nearly 7% from 2019, more than four times the national decline and the largest of any major city.
However, one report found that the decline was even more severe for black and Latino workers. analysis Census data released by Parrot in September.
Overall, the city’s median income was nearly $75,000. For white residents, it was more than $106,000. For black residents, it was $58,000. For Hispanics and Latinos, it was $53,000.
New York City had the highest increase in poverty of any major U.S. city in 2022, according to the analysis. Poverty rates for black and Latino New Yorkers (22.9% and 24.3%, respectively) were also twice as high as for white New Yorkers (11.6%).
Parrott said he doesn’t expect much improvement in 2024.
What can help lift more boats, so to speak?
Parrott said the city and state in particular need to do more to help New Yorkers with housing. But how do we pay for it?
Parrott recommended, at the request of Mayor Eric Adams, that the state release some of its record $22 billion in budget reserves to cities to provide further aid to the migrant crisis. There is. Adams announced sweeping budget cuts in November, citing the cost of the immigration crisis, the end of federal pandemic aid and slowing growth in tax revenues.
Parrott said the city needs to raise revenue in another way, through tax increases mandated by the mayor. signaled He’s open. Parrott recommends a “modest” tax increase for New Yorkers at the top, noting that New York City has gone 30 years without raising personal income taxes.
The economist said universities such as New York University and Columbia University should also start paying annual fees to the city for their growing real estate portfolios. A state bill introduced in December would revoke both universities’ long-standing tax-exempt status. Parrott suggested instead doing what some other jurisdictions do to large tax-exempt property owners, known as “payments in lieu of taxes.”
The payments “help support city services and are key to the economic success of those institutions,” Parrott said.
Parrott also said that given the deep racial and gender disparities that persist, lawmakers are targeting lower-paying jobs primarily held by women to ensure fairer benefits across the income spectrum. He also said that efforts should be made to raise wages in a targeted manner.
