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Report: Low-wage Jobs Dominate NYC Job Growth
Drum Major Institute for Public Policy
John Petro

May 17, 2011
View the Original Article


More than Half of All New Jobs Are In the City’s Two-Lowest Paid Industries: Retail and Hospitality

Introduction

This report reveals the startling extent to which recent job growth in New York City has been dominated by the city’s lowest-paid industries. Our findings—based on the latest data from the New York State Department of Labor—illustrate the critical need for city policymakers to take direct action and boost wages for New York’s working families.

New York City lost 173,000 jobs during the Great Recession, with employment levels hitting their lowest point during the 3rd Quarter of 2009. The one-year period following this low is of particular significance for policymakers since it represents a broad restructuring of New York’s economy. We examine job growth during this period to determine what this restructuring will look like and to discuss the policy implications of the dominance of low-wage work during New York’s economic recovery.

The two fastest-growing industries in New York are also the lowest paid. More than half of the city’s employment growth over the past year has been in retail or hospitality, both of which pay their workers less than half of the city’s average wage. This report discusses how this trend will negatively impact New York City’s families, schools, and workforce.

Retail and hospitality will continue to be among New York City’s leading industries for job growth, and in future years an increasingly larger proportion of the city’s working families will be employed in the city’s lowest-paid industries. We conclude that city policymakers must take action to boost wages in these low-wage service industries, either by expanding the city’s current living wage laws—through the Fair Wages for New Yorkers Act—or to consider whether the city’s current minimum wage is sufficient for New York’s working families.

Findings

  • In the year since New York reached its lowest post-recession employment levels, new job growth has been dominated by the city’s lowest-paid industries. The two leading industries for job growth, accommodation and food services and retail trade, are also the city’s lowest-paid industries and accounted for 52 percent of the city’s net job gains over the past year.
  • The city’s five lowest-paid industries made up 82 percent of all job growth over the past year.
  • Hospitality[1] added the most jobs over the past year accounting for 27 percent of New York’s employment growth. It is also the city’s lowest-paid industry, with an average wage that is 59 percent lower than the citywide average. * Retail trade had the second-highest job growth and accounted for 25 percent of the city’s job growth. It is New York City’s second lowest-paid industry with average wages that are 52 percent lower than the citywide average.
  • Administrative and waste services was the city’s third-highest industry for job growth and is the fourth lowest-paid industry. Average wages in this industry are 34 percent lower than the citywide average.
  • Health care and social assistance had the fourth-highest job gains and is the city’s fifth lowest-paid industry with wages 31 percent lower than the citywide average.

To read the full report [PDF], click here.