Study says NY state needs half-million new jobs
A jobs sign is seen on the front of the US Chamber of Commerce building in this September 2, 2010 file photo in Washington, DC. US companies added a meager 91,000 jobs last month, private payrolls firm ADP said Occtober 5, 2011. Credit: Getty Images
New York needs half a million new jobs to bring its unemployment down to 2007 pre-recession levels, according to a study to be released Tuesday by a think tank.
The loss of job opportunities -- both jobs lost and jobs needed to employ more people entering the workforce -- is the equivalent of $31 billion in earnings, the report by the labor-backed Fiscal Policy Institute said.
"Those are big numbers that dramatize how severe the recession and weak the recovery's been," said the study's lead author James Parrott, deputy director and chief economist for the institute. "We need an additional number of jobs to accommodate that growth in the labor force and growth in the working age population."
The recession began in December 2007, a year when annual average unemployment in the state was 4.5 percent, the lowest average in at least 10 years, according to U.S. Bureau of Labor Statistics data. Unemployment peaked in the past decade at the end of 2009 and beginning of 2010 at 8.9 percent. By last month, it had fallen to 7.9 percent, a rate that, while still high historically, was lower than the 9 percent rate in the nation.
The state has lost more than 250,000 middle and high-income jobs since mid-2008 and the only sectors to see net job growth have been in low-wage service industries such as restaurants and home health care services, according to the study.
"If that's the sort of job growth we're getting, then since it's not going to carry with it much in the way of added consumer spending. It means the recovery will continue to be very weak and subpar," Parrott said.
The state this month revised downward its revenue projections and increased the projected size of next year's budget deficit from $2.38 billion to between $3 billion and $3.5 billion. State personal income tax receipts came in higher than expected at the beginning of the fiscal year in April, but have since trended downward, posting negative growth in October, according to data reported by the state comptroller's office.
The state's reliance on the financial sector means that high unemployment may not be as important to state coffers as Wall Street bonuses, which are projected to be lower this year.
"On the revenue side the biggest bang is what happens on the top income levels," said David Hitchcock, a Standard & Poor's analyst who covers New York. "If you're going to have a very progressive income tax regime, you really want to have the top 1 percent do really well and you're tied to the fortunes of what happens with bonuses."
