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Long Island unemployment rate drops slightly to 5.1%, state data show

Labor participation will likely improve as reduced benefits

Labor participation will likely improve as reduced benefits push people to take jobs this fall, an economist said.  Credit: Newsday/Steve Pfost

Long Island's unemployment rate fell slightly in August and the labor force continued to contract, state data shows.

The Island's jobless rate dipped to 5.1%, down from 5.2% in July, the state Labor Department reported Tuesday. The rate in the region is lower than across the state, where it's 7.1%, and nation, where it's 5.3%.

The labor force, which includes employed Long Islanders and those actively looking for jobs, decreased by 12,700 from July to August — a decline the Labor Department's regional labor market analyst, Shital Patel, described as in-line with seasonal trends. Still, the Island's labor force has consistently shrunk over the past year, losing a total of 57,000 since last August and dropping 3.6% compared to August 2019.

"While we don’t have details on who has been exiting the labor force, there are many issues at play," Patel said. "Child care and elder care issues as well as lingering fears of the virus and the Delta variant continue to keep many on the sidelines. The region’s older workers may also be retiring in larger numbers."

The August data is based on a survey conducted early in the month and wouldn't capture any shift spurred by Long Islanders slated to lose some of their unemployment benefits in September, Patel said.

Labor participation will likely improve as reduced benefits push people to take jobs this fall, said John Rizzo, chief economist for the Long Island Association, a regional business group.

"People can be choosier now because there's a shortage of labor," Rizzo said, noting that some people are reluctant to return to jobs where they must commute to the office five days a week. "The unemployment benefits and the changing nature of how people want to work is keeping people out of the labor force."

The Island's unemployment rate fell nearly 50% from last August, when it was 9.7%. The jobless rate on Long Island improved more than nearly every region in the state during that period, Rizzo said. Still, unemployment remains high when compared to pre-pandemic times; it was 3.9% in August 2019.

"We're making progress on the unemployment front, but we still have a ways to go," Rizzo said.

On Long Island, the municipality with the lowest unemployment rate was the Town of Southampton, at 4.1%. The Village of Freeport had the highest jobless rate, at 7.1%, the data show.

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