Unemployment Rises As Job Hunters Flood NYC, Study Finds

NEW YORK CITY — New York's unemployment rate saw a significant increase last month as a slew of job seekers flooded the city, a new analysis shows.

The unemployment rate jumped to 6.6 percent in August even as New York City gained roughly 24,000 new payroll jobs, according to the Center for New York City Affairs.

There were 108,000 more unemployed New Yorkers than before the pandemic began, according to the analysis of data from the New York State Labor department.

The analysis also found a rise in labor force participation — the percentage of employed, working-age residents — spurred by an influx of job hunters and reaching 60.9 percent, according to the economic update.

The uptick presents an odd contrast with employers who say they have trouble finding entry-level candidates, noted James Parrott, the center's Economic and Fiscal Policies director.

"The steady rise in labor force participation is challenging to square with anecdotal reports from employers about difficulty filling job openings in many entry-level fields," Parrott wrote.

"The picture is complicated by the fact that the size of the city’s overall labor force remains 272,000 below the pre-pandemic level."

Parrott suggested that, despite growth, the city continues to grapple with a shortage of jobs as opposed to a shortage of applicants.

As evidence, Parrott pointed to a decrease in weekly hours worked and stagnating pay within the private sector. If businesses were understaffed, their employees would be working, and compensated, more, the analyst argued.

Average weekly hours worked in New York City stood above 34 percent in January 2019 but was only slightly above 33 percent in August, the study shows.

And a look at inflation-adjusted salaries showed earnings have dropped about by 4 percent since early 2020, according to the study.

The paradox is further complicated by said inflation, which is likely putting pressure on employers looking for ways to cut costs and employees who need to make rent.

"Most of this decline in real earnings results from the highest inflation in several decades," Parrott notes. "Employers not able or willing to raise wage offers may be the ones experiencing the greatest hiring challenges."

Finally, the Center For New York City Affairs found a growing discrepancy between wage increases on the high and low end of the economy in its analysis of the state's Quarterly Census of Employment and Wages.

A comparison of the first quarters of 2020 and 2022 shows finance sector wages rose by more than 17 percent while the food and services industry wages saw a 1.4 percent drop.

Read the full analysis here.