Gov. Andrew Cuomo’s $192.9 billion budget plan paints a sober picture of New York’s current and post-pandemic economy, as it forecasts a bleak job market for much of this decade.
“New York State employment is not expected to reach its pre-pandemic peak until 2025,” the analysis from the governor’s budget division said.
Cuomo’s 206-page “Economic Revenue and Outlook” describes a long winter of discontent with job growth stalling amid a second surge of the pandemic.
“With the onset of colder autumn weather, and virus-safe practices such as outdoor dining no longer feasible in many areas of the State, the labor market recovery has since slowed to a trickle, as the State added only 29,500 total jobs and 36,300 private sector jobs in November,” the report said.
“With COVID-19 transmission intensifying across both the State and the nation, job growth is expected to slow even further over the winter months until vaccines become widely available.”
Recovery is particularly slow in New York City, the state’s economic engine.
Employment in the Big Apple remains 12.2 percent below pre-pandemic February. The job losses fell most heavily on residents earning under $40,000 who were employed in the retail, restaurant and the hotel-tourism sectors.
The city recovered just 39.4 percent of jobs lost during the COVID-19 outbreak last spring compared to more than 60 percent for surrounding Long Island and Westchester-Rockland-Orange counties, the analysis said.
Job growth in New York state is projected to increase by 5.4 percent in 2021, not coming close to compensating for the steep 9.9 percent in job losses last year.
Raising taxes on the wealthy could be a dicey proposition to balance the state budget.
Cuomo’s own analysis shows New York already has the highest combined state and local tax burden among all states in the nation — $13.44 per $100 of income, according to 2018 data.
Meanwhile, small businesses are teetering, including city restaurants that are barred from offering indoor dining under the governor’s rule to contain the spread of COVID-19.
“Though new businesses will likely be created to replace at least a portion of those that dissolve, it is possible that an unwelcome legacy of COVID-19 will be an acceleration in the loss of labor market dynamism that has been taking place over the past three decades; as business activity has become further concentrated among a shrinking number of large corporations, many of which are not based in New York,” the analysis said.
Cuomo has proposed tax credits to aid struggling small businesses and restaurants.
The outlook cites risks that could make things worse, should the killer pandemic linger longer than expected.
The forecast also said the expansion of telework and relocation of urban workers out of the state, post-COVID-19, “poses a risk to the New York economy.” Lockdowns to contain the spread of the virus led to thousands of employees to work from home.
Conversely, near-universal distribution and acceptance of the coronavirus vaccine and approval of a Biden stimulus package could accelerate a faster economic recovery.
Cuomo is pressing new President Biden and a Democrat-controlled Congress to deliver another $15 billion in federal aid to help ease New York’s fiscal woes, and has threatened litigation if he doesn’t get it.