There’s a rather lugubrious post at City Journal by Nicole Gelinas that reviews the state of New York City’s economy. It has a number of eye-catching infographics which I won’t sample here. Here’s a snippet:
efore mid-March, New York City’s economy boasted nearly 4.1 million private-sector jobs—a record. No one industry dominated, meaning that the collapse of one would not mean disaster for the city. More than 800,000 people worked in “professional and business†sectors, which include corporate law and software design; another 800,000 worked in health care. Nearly half a million people labored in finance and real estate, and another half-million in leisure and hospitality. Retailers provided nearly 350,000 jobs; manufacturing, about 70,000; building construction, 50,000. There was basically a job for everyone, whether the investment-bank CEO or the dishwasher newly arrived in New York from Central America. Two earlier crisis periods—the tech bubble bursting, soon followed by 9/11, and then the 2008 financial meltdown—showed resiliency in this employment variety, as Gotham’s economy recovered far faster than the rest of the nation’s.
What was hard to imagine in early March is an awful fact now. Shutting down entire industries for months, even for a justified reason, brings mass-scale job destruction. As of late July (the last month for which data are available), New York City was missing 16 percent of its jobs, or 646,100 positions, relative to last July. After the financial crisis, by contrast, New York lost 206,300 jobs.
And in this crisis, New York is faring far worse than the rest of America. By late July, the nation had lost 8.1 percent of its jobs. But locally, industry after industry isn’t just in recession; it’s virtually nonexistent. New York is missing 53 percent of its 471,800 pre-Covid leisure and hospitality workers. The arts and entertainment field has lost 65,200 jobs, or more than two-thirds, and the restaurant and hotel field has hemorrhaged 184,500 jobs, or 49.2 percent. Retail outlets have laid off 45,300 people, or 13.2 percent. All these declines outpace national losses.
It seems to me that many of Ms. Gelinas’s prescriptions are wishful thinking. The city can’t give a property tax holiday or a sales tax holiday. At least if it’s like Chicago it didn’t lay off any city workers while everything else in the city shut down. They were deemed “essential workers”. It had to pay them then and now. It needs the money.
What I see when I look at her statistics and graphs will not make Ms. Gelinas happy. I grew up in St. Louis, second only to Detroit in having lost population since 1950 both in numbers and in percentage. When I use Google’s Street View to look at the house in which I spent my first ten years, I see many empty lots around it and most of the businesses that were nearby are gone. The house in North St. Louis that was owned by my great-grandfather and then my great-uncle and, finally, by his widow, having been occupied by members of my family for nearly a century, has been torn down as have many of the houses nearby. Whole city blocks are derelict.
Maybe many of the jobs lost in the restaurant and hospitality sectors were filled by (mostly illegal) immigrants and they can return to wherever it was they came from. But probably not.
New York City must shrink. If it can’t save itself, we can’t save it.
A better description of NYC pre-March was it was driven by office work (finance, tech, government, HQ), and from the support industries for office work (public transport, arts & culture, restaurants, retail).
The pandemic maimed the driver (office work) in a way the tech burst and financial crisis did not. Without the driver the support industries are in free-fall.
Will office work revive when the pandemic ends, we will find out…
I feel rather confident in suggesting that taxing what remains of the private sector to promote the continuation and growth of the government sector is probably not a winning formula for anywhere, maybe not even Washington, DC.
I’ve mentioned here before I have a close relative who works (worked) in the fashion industry for a major label and, until recently, lived in New York. The fashion sector was decimated and my relative was let go. She’s decided to rent her apartment and try to find work elsewhere since a rebound isn’t coming anytime soon. From talking to her, she’s not alone and many mid-level professionals – at least in fashion, are leaving New York.
To tag onto what Curious said, a lot of office work may turn into work-from-home work. Companies could stand to save a lot in terms of reducing expensive office space. So even if the jobs come back, they might not come back to the city.
That’s already happening. The company for which I work is cutting its office space in half. Not a surprise to me—I’ve been complaining about the excess space for years.
Note, too, that corroborates something I pointed out during the 2007-2008 financial crisis. It’s not unusual for companies to respond to crises by doing things they should have done years before. I don’t quite know why that is but I do know that it is.
Before I was on the government dole, I worked out of my house for almost 20 years, and it is not all it is made out to be. You are isolated, socially and professionally. I am inclined to being a loner, but it still affected me. In the first 10 years, I travelled a lot, and it was not so bad.
About half the company was virtual, but a lot of the work would be on-site at the client’s location. At first, we would have a short meeting every morning, a longer weekly meeting, and on-demand meetings as-needed.
We starting using GoToMeeting right after it was created, and since my department was software development, we used it for customer interactions as well. We tried using Trello, but if it is not kept up, it becomes useless, quickly.
We started with 3, went to 5, then to 7, and the meetings went from daily, to weekly, and finally biweekly. Per worker productivity decreased with each added member, and to compensate, the number of meetings was decreased. Because we were still a small company, we could make it work, but we were informal with few formal procedures.
We never used video, but I doubt it can replace the feedback you get from an actual human. Facial expressions, vocal tone, hand gestures, etc. are powerful communication tools, and without them, many people will interpret a joke as an attack.
To effectively work out of your house for years, you need the infrastructure as well. The kitchen table, wi-fi, a laptop, and a cell phone ain’t gonna cut it.
Of course, I could be wrong.
Regarding the wreckage of the shutdowns, I have some experience, as well. Fifteen years after Katrina, New Orleans and the adjacent parrish (county) have never returned to ‘normal’. The political leaders used it as an opportunity to reshape them.
Many poor (especially black) New Orleanians are now poor (especially black) Houstonians. Apparently, somebody forgot to send the buses to bring them home, but it is probably best. New Orleans is not the place they left. (The f-ing traffic lights are SIDEWAYS.)
‘Before I was on the government dole, I worked out of my house for almost 20 years, and it is not all it is made out to be. You are isolated, socially and professionally.’
Many of the Millennials live life like that, so it’s not so much of a strain on their already socially warped psyches.
‘New York City must shrink. If it can’t save itself, we can’t save it.’
That not what Cuomo and DiBlasio expect. They are banking on a Biden win. So is Pritzker and several other governors and mayors.
I don’t know what they’re thinking but if they’re thinking that, they’re fantasizing. Once again, perpetual motion doesn’t work. Thinking that everybody can be supported by extending credit is believing in a form of perpetual motion. So is believing that you can have everything you want just by extending credit.
Maybe they’re thinking IBGYBG (I’ll be gone; you’ll be gone). A lot of that going around these days.
Maybe they’re thinking that a little subsidy for a little while will enable them to recover. Maybe. Although it’s also possible that the subsidy will just be sapped away by those with the connections, knowledge, and will to do it and won’t do much to help recover. New York has demanded a bailout three times in my lifetime and in between bailouts New Yorkers make extravagant claims about what a great city it is. I think there’s a lesson there.
“Before I was on the government dole, I worked out of my house for almost 20 years, and it is not all it is made out to be. You are isolated, socially and professionally. I am inclined to being a loner, but it still affected me.”
I’ve been working from “home” for about three years now. I agree it can be isolating, but modern technology makes it not as bad as it used to be. Plus I’m middle-aged with a family and an established network of friends and associates, so I don’t really need the interaction. If I was in my 20’s and single, things would be a lot different.
The thing I like best about remote work is no commute. If there’s one thing I hate about regular work, it’s commuting.
I think most people will function worse if all of their work is from at home. Will the savings from reduced work spaces offset that? I think that is going to be highly individualized for each business entity and hard to predict. I think it will take a very different management style. I am guessing most companies ago back on site but a sizable minority wont or will at least have some staff work at home at least some of the time. It will accelerate telemedicine.
Steve
@TarsTarlas
… socially warped psyches.
They are probably not a good choice for an employee, at-home or on site.
It takes discipline to work unsupervised, and a person needs to understand that masturbating should not be done during working hours and definitely not on a Zoom call.