From the late 1960s to the early 1990s, New York City could be characterized as the “city that doesn’t work.” Reversing a historic pattern that had prevailed until that time, the share of NYC adults employed, or even in the labor force (working or looking for work), was well below the national average. A high share of the city’s population was on public assistance. And, New York City reputedly had a large share of its workforce employed by the government. The latter point was always an exaggeration – if New York’s tax dollars went anywhere to a greater extent that elsewhere, they went to those retired from public service not those actively providing public services, and to the large, government-funded “non-profit” health and social service sector. Recent data from the 2006 American Community Survey (ACS – see attached spreadsheets), however, show that New York’s status as a city of non-workers may be disappearing as a “welfare generation” passes on. And dependence on government and government-funded employment is, in fact, a characteristic of the suburbs and Upstate New York, not New York City.
ACS data on the percent of employed persons living in each area by “class of worker” show that government workers accounted for 14.4% of all U.S. workers in 2006, compared with 15.0% for New York City residents, 16.8% for residents of the downstate suburbs, and far more in many upstate counties. New York City’s local government figure is inflated by the many public services provided here but not elsewhere, such as a large transit, public hospital, and public housing systems. On the other hand, relatively few state or federal government workers reside in the city, due in part to the relatively limited state and federal employment in the broader area and the fact that activities undertaken by state governments elsewhere are shifted to local government in New York City. Moreover, by state law most New York City local government jobs, including almost all of the best paid, may be taken by residents of the suburbs, while local governments in the rest of the state may exclude New York City residents from their payrolls. Many government workers residing in the Downstate Suburbs are in fact employees of the City of New York or New York City Transit.
New York City continues to have a far above average share of its residents employed in the politically powerful, substantially government-funded non-profit sector, which employed 8.9% of city residents compared with 7.2% for all of the U.S. and 7.5% for residents of the suburbs. Even adding government and non-profit employment together, however, the suburban residents were more likely to hold government and government-funded jobs than were residents of New York City. In nearly all major upstate counties covered by the ACS, a larger share of residents worked in the non-profit sector than in New York City.
This situation may explain the strange ideology of the State Senate Republicans, whose rhetoric continues to mine the mythology of the feckless residents of the city milking their hard working middle-class constituents, but whose budgetary preference is for more and more spending with New York City receiving a lower and lower share – and richer pensions for New York City local government workers, diverting money from services. In Joe Bruno’s Rensselaer County, the government employs 23.6% of the workforce while the non-profit sector employs 11.6%, in each case far more than in New York City. In Dean Skelos’ Nassau County, the non-profit sector employs 7.6% but the government employs 17.1%; the sum of these two exceeds the sum in New York City.
Dutchess County’s Steve Sarland objects to an education finance system that forces New York City residents to pay 43% of state income taxes and returns 37% of education aid to the city’s schools, which account for 37% of the state’s public school enrollment, on the grounds that this constitutes a “Robin Hood” system. Clearly he prefers a system in which New York City’s education aid is cut while the rest of the state’s is increased in the middle of a fiscal crisis, and the city’s share falls to 29%, as in the mid-1990s. Perhaps that is his way of looking out for the welfare of his constituents, and I use the word “welfare” advisedly, with 17.9% of employed Dutchess residents working for the government and 11.7% for the non-profit sector.
It might also explain the State Senate’s one-house bill to have the state government take over the cost of teacher pensions. Due in part to the distribution of state education assistance, New York City accounts for a very low share of the state’s current and retired teachers. So the city’s benefit from such a plan would be limited, compared with the state taxes city residents would have to pay to fund it. Imagine if the State Assembly had proposed that the state take over the pension costs of transit workers, with all state taxpayers from Montauk to Buffalo kicking in but most of the benefit accruing to New York City? I suspect that people are being put on the payroll unnecessarily outside the city to provide them with an income, retire health insurance and a pension, but the deferred cost of the retirement benefits could lead to a catastrophic decline in services, as it did in New York City in the 1970s. The solution, some seem to believe, is to have the catastrophic decline in services take place in New York City once again, even though this time the mismanagement and deferred costs are happening elsewhere.
Within New York City, the borough most dependent on government jobs in general, and local government jobs in particular, is Staten Island, where 22.7% of employed residents are public employees. This flies in the face of the findings of a report by a commission on the viability of Staten Island secession in the early 1990s, which I was asked to review as a staffer at the Department of City Planning. The report held that whereas the rest of New York City was dependent on government employment, Staten Island was private sector oriented.
That finding, however, was based on data by place of work – many government workers who work in other boroughs live on Staten Island. Worse, for most employer-based data series, all employees of New York City agencies are assigned to the location of the headquarters of their agency – meaning that according to these series there are no police, firefighters or teachers on Staten Island. The finding that Staten Islanders were pulling their weight in the private sector while those elsewhere in the city were “on the tit,” to use the civil service phrase, was what the client wanted to hear, and shows the kind of “analysis” you have to do to make a living doing this sort of thing. But the client was not naïve. The proposed terms of secession would have allowed residents of the City of Staten Island to continue to take any public service job in the diminished City of New York, but would have permitted the City of Staten Island to exclude City of New York residents from its future hiring.
How about people who are out of the labor force entirely and dependent on transfer payments? Here, city residents have traditionally been more likely to be dependent, but data by age reveals an interesting pattern.
For those age 45 to 74 last year, among men and women, New York City residents were much less likely to be in the labor force than residents of the United States, the Downstate New York Suburbs, or both. For example, among those aged 55 to 59, 61% of New York City women were in the labor force, compared with 67% of suburban women and 65% of U.S. women. And 73% of New York City men were in the labor force, compared with 83% in the Downstate New York suburbs and 76% nationally. So those in the suburbs in this age group are more likely to be working than the national average, while those in the city are less likely.
People between 45 and 74 last year reached age 22 between 1954 and 1983, years when the city’s economy was weak and, even among those working in the city, a large share of the middle class was decamping to the suburbs. A public use microdata analysis of the 1980 census showed that many of those who arrived in NYC from elsewhere between 1975 and 1980 ended up on public assistance. Whether they came from less generous states to get on welfare, or came looking for employment but ended up on public assistance as non-college-educated jobs fled the city, is something for social historians to debate. What is not debatable is that in those generations, those who work are more likely to reside in the suburbs, even if they grew up in the city, while those who are dependent on public assistance are more likely to live in the city, even if they grew up elsewhere. And, according to another PUMS analysis, the heads of only one-third of the households receiving public assistance income in New York City in 1990 were born in New York State, with far more from the South Atlantic states from Virginia down to Florida.
Among those age 25 to 44, however, New York City residents were about as likely to be in the labor force as their national or suburban New York counterparts, sometimes a little less and sometimes a little more, perhaps depending on how many remain full time students or (in the case of women) the timing of childbirth. The suburbs still have an edge among men. But remember all those government jobs people from the suburbs get, and city residents do not. For these age groups that could explain the difference, and then some.
One could argue, in fact, that some of the enormous local government hiring the in the rest of New York State since 1990, rather than being associated with luxury-class public services, is in fact a luxury-class welfare program – for the benefit of people who sneer at New York City’s welfare culture. I’ll bet that back in the 1960s and 1970s, someone (Bella Abzug perhaps?) suggested that the solution to welfare dependency in New York City was to give the poor solid, middle class government jobs with pensions and find something for them to do. I wonder what the reaction of suburban and upstate elected officials would have been to such a suggestion at the time.
The higher labor force participation of New York City residents age 25 to 44, of course, need not have anything to do with those growing up in New York City. It is more likely to reflect the economic activity of those moving to New York City from the rest of the country and abroad, bringing education and skills with them. If, however, this group maintains its high labor force participation throughout its life and remains within the city’s borders (rather than being driven out by bad schools when their children reach school age), then as older generations of city residents, who are less likely to work, die off, the difference between the city and the nation as a whole may disappear. Remember, prior to the 1960s NYC residents were more likely to be working than those elsewhere, particularly among women.
Fans of workfare could argue that teens growing up in NYC post welfare-reform have no expectation of living without work of some kind, and this may also explain part of the higher labor force participation among younger New Yorkers. Opponents could point to the larger gap between the city and elsewhere in employment as a share of the population, using it as evidence that though they may be more likely to want jobs they remain less likely to get them, a benefit for suburban commuters of the state policy of providing NYC children with an inferior education that is likely to last for many years.
The city’s labor force participation remains lower than the national average for college-aged people, perhaps reflecting the city’s status as a college town full of full time students. But for those aged 20 and 21, the Downstate Suburbs are equally low (NYC women aged 22 to 24 are less likely to work than suburban women of the same age).
New York City remains the city where teens don’t work, with only 26% of the city’s young men aged 16 to 19 and 27% of its women in the labor force, compared with national averages of 45% and 46%. Is this because businesses would rather not hire products of the city’s schools? If so the only way New York City will match the national average is if those who grow up here leave when it is time to form their own households, perhaps because they are priced out New York due to competition from the better-educated people arriving from elsewhere.
On the other hand, perhaps not working as a teen has become part of the culture in the metro area as a whole. While higher than in New York City, teen labor force participation in the Downstate Suburbs is also much lower than the national average.