Big Apple Loses $31 Billion Bite to Recession
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The Fiscal Times
November 29, 2011

The Great Recession officially ended in mid-2009, but its effects are still being felt in ways both large and small in states across the country. The unemployment rate in California,for example, which had been as high as 12.5 percent late last year, still stands at 11.7 percent today. In Nevada, where unemployment had approached 15 percent, it’s now 13.4 percent, and  average home prices in that state have fallen by 58 percent over the last five years. And for New York State, a report released Tuesday by the left-leaning Fiscal Policy Institute tallies this toll: 504,000 jobs and $31 billion in lost earnings this year alone.

That half-million jobs figure includes both positions that have been lost and those that the institute calculates would have existed if unemployment in the Empire State, now 7.9 percent, was back at the average 2007 level of 4.5 percent. It also includes about 96,000 jobs that don’t exist because of small businesses that haven’t been started, given the economic conditions. “When we add together the lost earnings that these 500,000-plus employment opportunities would be generating year in and year out, New York families are losing $31 billion a year due to the recession and its aftermath,” the report concludes, noting that the figure doesn’t factor in lower earnings of those residents working part-time because they can’t find full-time jobs.

The employment opportunities that have been created since mid-2008 have mostly been in lower-wage industries like restaurants, educational consulting and home health care, where average annual wages are under $45,000. Those low-paying industries have added 82,000 jobs, while at the same time the state has lost more than 250,000 positions in higher-paying sectors like manufacturing, construction, government and finance, the Fiscal Policy Institute said. (The institute is funded in part by labor unions.)

As the issue of the growing income disparity between the country’s top earners and those lower on the wage scale has drawn increasing attention, and has been a focus of the Occupy Wall Street protests, the Fiscal Policy Institute report calls New York “the capital of income polarization.” While the state’s gross domestic product for 2010 was higher than it had been in 2007, the report finds that wages have not kept pace with the increases in productivity. Real median incomes in the state have fallen by 3.2 percent, with New York City experiencing a slightly lower drop of 2.2 percent. “New York workers are not sharing in the prosperity they help create,” the authors write. “Since 2000, GDP per worker has grown more than twice as fast as annual average wages (even counting CEO salaries).”

Those at the lower end of the economic spectrum have been hurt in other ways, too. With many state residents out of work and no longer receiving employer-provided health insurance, the number of uninsured New Yorkers has jumped by 550,000 to 2.9 million, a faster rate of increase than in the country overall, according to the report. And 1.2 million more people are on food stamps, an increase of 63 percent in New York City and 68 percent in the rest of the state.

Executive Editor Yuval Rosenberg oversees coverage of business, the economy, technology and Wall Street. A former web editor at WNYC, Fortune and Newsweek, he also writes on a wide range of subjects.