New Issue Brief: NYC Boasts Record Private Employment, but Too Reliant on Publicly Funded Care Sector
An analysis of new employment data offers good news about NYC’s economy, but also concerns
NEW YORK, NY – Last year, New York City experienced record private-employment growth, rebounding fully from the pandemic’s economic downturn. Key sectors like information, finance, and professional- and business-services thrived, driving the city's office-based economy. But while these are encouraging indicators, a new Manhattan Institute issue brief from senior fellow Eric Kober analyzes 2023 employment data to provide fuller context. He offers ideas to capitalize on wins alongside solutions to course-correct areas of concern.
Private education and health services emerged as the largest employment gainer, predominantly within the subcategory of health care and social assistance. Yet while such jobs provide valuable services for elderly New Yorkers and homeless migrants, employing many workers without college degrees, their reliance on public funds makes continued growth fiscally unsustainable.
This restructuring of the economy away from private-sector jobs supported by entrepreneurial businesses towards quasi-governmental employment exacerbates New York’s combined state and local tax burden, the nation’s highest. Meanwhile, the data show that other traditional sectors that employ non-college graduates—such as construction, retail, restaurants and hotels—remained below pre-pandemic levels.
Kober’s brief paints a picture of high taxes, regulatory hostility, and outdated policies, particularly in housing and zoning, hindering economic growth in what should otherwise be the nation’s most vibrant and affluent city. He notes that recent actions at the state and local level are promising, but much more needs to be done. Repealing restrictive zoning regulations and expanding hotel development, for example, could create opportunities for blue-collar workers and bolster tourism. Overall, Kober writes, to sustain employment growth, New York City must address barriers to investment and private business development.
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