A Million Jobs Lost: A ‘Heart Attack’ for the N.Y.C. Economy

A Million Jobs Lost: A ‘Heart Attack’ for the N.Y.C. Economy

July 7, 2020 Off By administrator

New York City, hit hard by the coronavirus pandemic, is mired in the worst economic calamity since the financial crisis of the 1970s, when it nearly went bankrupt.

The city is staggering toward reopening with some workers back at their desks or behind cash registers, and on Monday, it began a new phase, allowing personal-care services like nail salons and some outdoor recreation to resume. Even so, the city’s unemployment rate is hovering near 20 percent — a figure not seen since the Great Depression.

What was intended as a “pause” has dragged on so long that for many workers, furloughs are turning into permanent job losses. The sudden shutdown of the city nearly four months ago threw at least a million people out of work and threatened the survival of many of their employers.

The layoffs continued in June as some employers gave up hope of a quick recovery or ran out of the federal aid they were using to maintain their payrolls.

Kelvin L. Rolling, 48, was among those affected. A taxi dispatcher at Kennedy International Airport for the last five years, Mr. Rolling said he thought he was one of the lucky ones who would hold on to his job despite the plunge in traffic at the airport.

But then in June he was laid off on short notice.

With the city trying to kick start its economy and in the midst of a phased reopening, Mr. Rolling said, “It seems like you would be calling people back, not laying people off.”

The pandemic set off an immediate and sweeping reversal of fortune that the city has never endured, economists said. Most past financial crises were “like a prolonged illness,” said Frank Braconi, a former chief economist for the city comptroller’s office.

“This was like a heart attack,” he said.

Entire industries — restaurants, hotels, theaters and museums and galleries — went from operating at full throttle to being practically shuttered.

Economists said they feared that the fallout would soon spread to other sectors like education, health care and professional services. Wall Street, a main driver of the city’s economy, appears somewhat insulated for now because the markets have rebounded and several of the biggest banks have pledged not to lay off workers during the pandemic.

Many businesses, including restaurants and hotels, are expected to close for good. The picture has grown even grimmer after officials delayed indefinitely the reopening of indoor dining.

While the national unemployment rate fell to 11.1 percent in June, New York City’s rate reached 18.3 percent in May, the highest level in the 44 years that such data has been collected. (In the Depression, unemployment is estimated to have reached 25 percent.) The numbers for June will be released next Thursday.

The highest the city’s unemployment rate reached during the great recession following the financial collapse in 2008 was about 10 percent. For a decade after that, the city steadily added jobs, reaching a record-low unemployment rate of 3.4 percent in…

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