New York Job Growth is Back — and Not Just on Wall Street
The economic outlook for job seekers in New York has been lackluster at best for the past few years. Recovery from the ’08 financial crisis has seemingly taken the path of most resistance, as evidenced in the fact that our nation’s recent attempt at economic recuperation has been one of the slowest in recorded history. However, a recent series of economic forecasts has economists and New York job seekers alike more optimistic now than during any other period in the past seven years.
Recent economic gains across a variety of industries has the entire state booming with employment growth. In 2014, employment among New York State residents grew by 1.6% — the strongest employment growth New York has seen since 2000. In total, New York State has added more than 700,000 jobs to the economy since mid-2009, at the height of the Great Recession.
Furthermore, one of the most consistent criticisms of what some have coined the “Great Recovery” has been the overall average wage growth, which is finally increasing. New Yorkers have enjoyed wage growth of over 14% between 2009 and 2014, which is well ahead of the overall U.S. inflation rate. The New York State Office of the Comptroller also reports that the 5.1% increase in total wages in 2014 is the highest since 2007 and significantly higher than the rest of the country’s average wage gain of just 4.5%.
Recovery is Not Just for Wall Street
So where has all of this economic and job growth come from? One of the most promising, and most surprising, aspects of New York’s job growth is the diversity of industries from which the growth has sprouted Traditionally, large New York City investment banks and brokerage firms have been the major drivers of recovery for the Empire State. In fact, during the economic recovery following the 1990 – 1991 economic slump, over 10% of jobs added to New York City’s private sector were in the financial industry. In the past, post-recession wage growth has also normally been driven by increasing salaries in the financial industry.
This time around, however, things are significantly different. Jobs in the healthcare and service industries (including nursing, physician, and hospital jobs) are driving more significant job growth than ever before, while the tech boom has also contributed to a booming New York economy. Jobs in the professional services and real estate industries have actually seen more job growth than those in the securities industry, while construction, trade, and leisure/hospitality industries are also enjoying a bigger share of the overall job pie than they did before 2008.
Job growth for eight of the eleven non-governmental industries, which includes leisure/hospitality, professional services, financial activities among other industries, was higher in New York than the national average in the United States, demonstrating further that New York’s economic recovery hasn’t just been fueled by big wigs on Wall Street.
Economists and New York State residents alike agree that this is a good thing. “We all saw what happened in 2008 when New York’s economy leaned on Wall Street,” says Jillian, a recent college graduate and copywriter at a mid-sized New York marketing agency. “We don’t want to be in a situation where if Wall Street falls we all fall. I think that is a primary factor driving a ton of people to take jobs in other industries, not to mention that many young workers just joining the job market simply don’t want to be stuck in the financial industry. Many of us are drawn to more creative fields.”
The New York tech boom, fueled by an impressive venture capitalist climate outside of Silicon Valley, has created its fair share of tech giants who are adding well paying jobs to the New York economy at a furious pace.
This affinity for creative positions amongst younger workers that Jillian posits may very well be the cause of individuals shying away from more traditional financial jobs like investment banking and consulting, and seeking out opportunities within companies like Apple, Google, Facebook, and Buzzfeed. The New York tech boom, fueled by an impressive venture capitalist climate outside of Silicon Valley, has created its fair share of tech giants who are adding well paying jobs to the New York economy at a furious pace.
An unlikely recipient of one of these jobs is Max Yagger, a 32-year-old accountant-turned-developer. “We live in a city with great opportunities to educate yourself in whatever field you’d like and connect with people that think differently than you do,” says Max, who graduated from a New York-based coding boot camp less than one year ago and had a job offer within weeks of graduation. He, like many in his generation, grew tired of his traditional corporate job and wanted a career that would challenge him creatively. “Demand for great developers in New York is sky high right now, which definitely helped me while making the decision to jump into the semi-risky career path that I loved, instead of being stuck with the safe job that I didn’t.”
The tech field is certainly creating its fair share of growth in New York City, but if you look outside of the big apple, industries like education, healthcare, and hospitality (including restaurant/food service and hotel jobs) are creating more jobs than any other industry, including tech.
Education and health services now accounts for more than 20% of New York State’s jobs and added more than 40,000 net jobs to the economy in 2014, above and beyond what any other sector was able to accomplish in that time period. Job growth outside of the big apple is still sluggish, but the growth seen in the education and health services industry has certainly helped.
Particular regions, such as Mohawk Valley, have actually experienced employment declines between 2009 and 2014 with wage growth that has been significantly lower than the average rate of inflation across the United States. In Long Island, most of the jobs that were added were in the hospitality or health sectors, which replaced jobs in the information and government sectors. Traditionally, the information and government industries have the highest increase in wages year-over-year, while the hospitality and health sectors remain comparatively low. Thus, the exchange of workers from high-wage to low-wage sectors has caused wage growth to become stagnant.
The job market in New York State, outside of New York City, does have a silver lining. In the western and central regions of the United States, where information and governmental jobs have been declining, every other industry has been booming. This actually includes manufacturing employment, which increased by more than 900 jobs in 2014, a rarity in this sector.
A Sunny Outlook on the Job Market
The economic future for New York State, according to many economists, is extremely bright. State-wide projections indicate that the entire state will have added more than 590,000 jobs between 2008 and 2018, with New York City alone expected to add another 250,000 jobs by the end of 2018. The next five years for New York has been described as a “historically strong employment expansion” by the New York Budget Office, and the diversified nature of the job boom means that the job market won’t be completely derailed by a bubble in one sector of the economy (we’re looking at you Wall Street).
“I think we’re past the doom and gloom.”
Economists aren’t the only ones that believe the job market in New York is looking better than ever. Residents and business owners in New York are also feeling more confident that the economic growth and hiring increase will continue.
“I think we’re past the doom and gloom,” says David Reins, a recent New York University graduate working in the tech field. “I think people are starting to look at the economy and feel extremely optimistic about things to come.”
While industries like information and financial services will likely continue to have the largest wage increases, New York State residents should feel confident that they will continue to have a diversified labor force. Job growth in the education and healthcare industries is expected to remain the highest in the state according to the New York State Office of the Comptroller, and the desire amongst recent college graduates for careers in startups and creative fields instead of careers in finance doesn’t seem to be slowing any time soon.
In light of some of the most positive projections that New Yorkers have seen in years, residents should be feeling confident. Indeed, paychecks are steadily increasing while jobs are being added throughout New York State and economic projections remain optimistic. Only time will tell where the New York job market goes from here, but as for now, New York State is looking like a pretty impressive destination for job seekers.
Wall Street Photo CC Sam Valadi