Nearly four full years since the COVID-19 lockdown of March 2020, statewide private employment in New York has finally (barely) returned to pre-pandemic levels—but it’s hardly the “full economic recovery” touted by Governor Hochul in a self-congratulatory “New York is Back” press release.

On a seasonally adjusted basis, the latest state Labor Department data pegged New York’s total private employment at 8.34 million jobs in January—slightly above the 8.33 million level of February 2020.

However, job gains over early 2020 levels have been far from evenly distributed around the state.

All of the state’s net recovery—and then some—has been concentrated in New York City and the downstate suburbs of the lower Hudson Valley and Long Island, where total employment as of January was up 51,000 jobs (about 1 percent) from the same month in 2020, on a non-seasonally adjusted basis.

In the 50 upstate counties, total private employment as of January was still 49,300 jobs below the January 2020 level—continuing a long-term trend in which the metro and rural areas north of the mid-Hudson Valley have fallen further and further behind statewide and national growth trends.

On a year-to-year basis, the January private employment totals were up 94,100 (1.6 percent) downstate and 25,400 (1.2 percent) upstate over 2023 levels. At this rate, based on private job totals alone, upstate won’t have a “full” recovery until late 2026.

New York’s job gains haven’t occurred in all sectors, either.

  • Manufacturing employment as of January remained 16,600 jobs below the January 2020 level, a decrease of 3.8 percent during a period when the nation as a whole was adding 177,000 manufacturing jobs (up 1.4 percent).
  • Construction employment across New York was still down 22,000 jobs from the January 2020 level, a 5.7 percent drop in a period when the nation was gaining 559,000 construction jobs, an increase of 7.7 percent.
  • In the highly compensated securities and commodities sector—which generated a disproportionate 27 percent share of state tax revenues in fiscal 2023—employment in New York State was down 400 jobs (0.3 percent) from the 2020 level. National employment in the same sector was up 134,500 jobs, or 15.6 percent. In the past year, New York lost 1,600 securities industry jobs, even as the nation as a whole was gaining 26,900.

New York’s biggest employment gains since January 2020 were concentrated in health care and social assistance—including hospitals, nursing homes, and home care agencies heavily subsidized by the state’s exceptionally high-spending Medicaid program—which gained 127,000 jobs since January 2020, a growth rate of 7.7 percent. National employment in this sector grew by 1.33 million during the same period, a lesser increase of 6.4 percent.

From January 2020 to 2024, the Empire State also gained 42,900 professional and business services jobs—but New York’s growth rate of 3.2 percent was less than half the sector’s national increase of 6.9 percent.

The outbreak and the aftermath

On March 20, 2020, after weeks of downplaying a mysterious coronavirus emerging from Wuhan, China, Governor Cuomo issued an emergency order severely restricting normal business and social activity across the state. Within six weeks of the start of the lockdown, the state had lost nearly 2 million jobs.

The U.S. economy as a whole also was hard hit in that pandemic-rattled spring—but only the tourism-intensive states of Nevada and Hawaii sustained greater losses than New York in the early going of the public health crisis.

The Empire State’s post-pandemic recovery has been a long, slow slog. After keeping pace with the national rate of job creation in the decade following the recovery from the Great Recession, New York fell far below the U.S. trend line in the early weeks of the pandemic—and remains there.

As illustrated in the chart below, the Empire State has about 20 percent more private jobs than in 2010. The national total, by comparison, is 25 percent above the 2010 employment level. The U.S. as a whole recovered to pre-pandemic employment levels by early 2022.  If the state had caught up with the nation by now, it would have 400,000 more private-sector jobs.

 

Split regional personalities

As noted, upstate counties have yet to recover to their January 2024 level, while the downstate region was almost back to its pre-pandemic level a year ago. But this regional divide is not a new phenomenon.

From 2010 to 2020, the downstate region added nearly 1.2 million jobs, a growth rate of roughly 25 percent that roughly matched the national growth pace. Meanwhile, upstate’s employment base expanded by just 7 percent, less than one-third of the state or national growth rates, adding just 115,000 jobs over 10 years.

 

In the first three years after the pandemic outbreak, the usual regional roles reversed, with downstate further from recovery than upstate. But downstate’s recovery rate was much faster, and by fall 2023 New York City was back to pre-2020 employment levels. In a nearly word-for-word precursor of Hochul’s statement yesterday, Mayor Eric Adams announced last October that the city’s job total had risen back to all-time highs.

Here is how the “full recovery” has played out in major labor markets of New York:

And as shown in a map accompanying the Labor Department’s latest release, much of the upstate region continued to underperform the statewide average employment growth in the past 12 months as well.

 

About the Author

E.J. McMahon

Edmund J. McMahon is Empire Center's founder and a senior fellow.

Read more by E.J. McMahon

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