New York City Job Losses Creep Beyond Wall Street
Well-paid professionals like lawyers, accountants and architects are joining the rapidly expanding unemployment rolls in New York City, as the effects of the financial crisis have spread beyond Wall Street not only to other white-collar industries but also to the construction and retail trades, a new report shows.
The number of white-collar workers outside the financial industry receiving unemployment checks was up by more than 40 percent in October from the same month last year, and the
number of college graduates collecting benefits was up by 50 percent, according to the report by the Fiscal Policy Institute, a nonprofit research group.
“Unemployment is starting to shoot up in New York City, and it’s affecting a spectrum of workers, both professionals and blue-collar,” said James Parrott, the institute’s chief economist and author of the report. “It’s hitting young workers and older workers, and it’s poised to rise dramatically in the weeks and months ahead.”
The report comes amid continued bad news in the financial industry. On Thursday, Bank of America said it planned to cut 30,000 to 35,000 positions over the next three years as it digests its acquisition of Merrill Lynch.
The report, based on state and federal unemployment statistics, provides hard data confirming a trend that was until now best understood anecdotally. It also showed that New York entered the recession much later than the rest of the country, largely because hiring by law and accounting firms, media companies and tourism-related industries remained strong through the first half of the year.
As recently as July, the number of new claims for unemployment benefits in the city was only
about 10 percent higher than it had been a year earlier. But since employment peaked in August, the city has lost about 10,000 jobs. And in the 12 weeks between late August and late November, first-time unemployment claims increased by more than 40 percent over the same period the year before, the sharpest year-over-year increase since February 2002.
Mr. Parrott said that the figures understate the severity of unemployment because many laid-off workers have not started collecting checks and many others do not qualify for benefits. In October, fewer than one-third of the 225,000 unemployed residents of New York City were collecting benefits, he said.
That portends an upsurge in the city’s unemployment rate for months to come, Mr. Parrott said. Most forecasts project that the city will lose more than 150,000 jobs during this recession. The Fiscal Policy Institute report estimates that job losses will average about 10,000 a month from November 2008 through the end of 2009.
The city’s unemployment rate was 5.7 percent in October, up from 5.2 percent in October 2007. The national unemployment rate was 6.5 percent, up from 4.8 percent the year before.
The growth in New York’s ranks of the well-educated unemployed seems to parallel a national trend, said Lawrence Mishel, the president of the Economic Policy Institute in Washington. Since March 2007, the number of college graduates who are unemployed has risen at a faster rate, 75 percent, than has the number of all unemployed Americans who are 25 and older, 62 percent, Mr. Mishel said.
“This is very strong evidence that this recession is very hard on college grads, more than usual,” Mr. Mishel said.
Mr. Mishel’s organization works with Mr. Parrott’s to promote the concerns of organized labor and low-wage workers.
Kenly Lambie, an architect who lives in Brooklyn, joined the ranks of the unemployed this summer after she was laid off by a firm where she had worked for a year. The dismissal caught her by surprise, but she said other firms have also cut back as construction loans have dried up.
“It’s really grim, and almost everyone I know who was at my level is unemployed,” Ms. Lambie, 29, said. She said she hopes to land at another firm in the city, but added, “If a really interesting opportunity came along in, say, Argentina, I’d jump on it.”
In the meantime, Ms. Lambie is trying to get by on a weekly unemployment check of $405, which she said is “definitely not enough.”
(Video: Possible layoffs at Yahoo)
A separate report released on Thursday by the city comptroller’s office echoed the central findings of Mr. Parrott’s study, doubling the city’s projection of the number of people who will lose their jobs by August 2010, to 170,000.
The comptroller’s report also estimated that total Wall Street bonuses this year will be less than half what was paid last year, making it the smallest amount since 2002. Largely as a result, city tax revenue will fall by 4.3 percent in the next half year, the comptroller concluded.