Tag Archives: Unemployment

Citing signs of stabilization, economists hopeful about next year

By Kieran K. Meadows

What a difference a year makes.

Jobseekers may not feel better, but if you ask economists, things are not nearly as bad as they thought they might be.

“Looking forward and looking backward, we’re better off than most people would have imagined at this point,” said Barbara Byrne Denham, an economist for Eastern Consolidated, a real estate investment company.

Just over a year since the financial crisis plunged New York into the depths of recession and uncertainty, some economists are now cautiously optimistic about next year’s outlook. They predict a moderate turnaround in mid-2010. While conceding there’s a long road ahead to a full recovery, they point to some encouraging signs the economy is stabilizing. Some say this is largely the result of government intervention.

“The government came in and bailed out the financial firms and they are major employers in New York City,” said Ken McCarthy, an economist for Cushman Wakefield, a real estate services firm. “The financial sector is coming back more quickly than anybody expected.”

After being propped up over the last year by the feds, Wall Street to estimated to make $59 billion in profits in 2009—its highest ever—and a complete U-turn from huge losses of $11 billion in 2007 and $42 billion in 2008.

On Thursday, the Independent Budget Office reported fewer job losses and higher tax revenues than it had originally projected. “We expect New York City job losses to be far lower than we anticipated last spring,” said Ronnie Lowenstein, the director of the IBO.

The revised report forecasts the city to lose 157,200 jobs from the peak of employment in August 2008 through mid-2010—much fewer than the 254,500 lost jobs from the earlier report. “That’s a huge difference,” Lowenstein said.

The construction sector has also showed signs it’s slowly improving. Work began at $3.9 billion worth of projects in the third quarter of 2009, twice that of the year’s first three months, according to an analysis by the New York Building Congress.

The state Department of Labor reported that the city’s jobless rate was 10.3 percent in October, unchanged from September. “After deteriorating for months, the city’s unemployment rate appears to be stabilizing,” said Comptroller William C. Thompson, Jr. in a statement.

Despite encouraging signs, the city is not close to being out of the woods yet. Unemployment is likely to come down very slowly, said Rae Rosen, an economist with the Federal Reserve Bank of New York. She says banks are rebuilding capital, which limits their ability to make loans to businesses. With less access to credit, small businesses, which are traditionally engines of recovery, have been unable to create jobs.

Moreover, the unemployment rate will likely inch higher until it levels off at least six months from now, after we shed another 50,000 to 75,000 jobs.

To counteract this trend in 2010, Jonathan Bowles, the director of the Center for an Urban Future, says city officials should focus on diversifying our economy to depend less on Wall Street. “We need to identify areas where there’s substantial opportunities for growth,” he said, citing the tech and creative sectors. “We attract the most talented and creative people,” which is “a core strength,” he said.

New Yorkers should hope the city follows the footsteps of the national economy. On Friday, more evidence revealed the U.S. is turning the corner toward recovery faster than expected. The U.S. unemployment rate dropped from 10.2 percent in October to 10 percent in November—perhaps not a significant drop, yet symbolic after a year of awful economic news.

“Positive job growth at the national level will be a huge boost in morale overall,” Denham said, building confidence on Wall Street and on the part of consumers, which can help accelerate the city’s economic recovery into the new year.

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Bloomberg’s Approach to Job Centers Seen As Successful, Despite Criticism

By Kieran K. Meadows

Dozens of jobseekers sized up the others seated in the packed waiting room of the city’s job training center in Brooklyn one recent Friday morning. Fifty people waited to see counselors, attend workshops and improve resumes. The bright blue walls and fancy logos offered a sense of a hope that, despite the city’s highest unemployment rate in 16 years, this center would connect them to a job.

With changes to the job placement system over the last six years, they might have a better chance than ever before.

“The focus has actually changed now,” said John Maul, the coordinator at the Brooklyn Workforce1 Center, one of the job development hubs found in each borough. “It’s more like, ‘Go out and find the companies and what their needs are, and then find the people to fill those. It’s a different perspective,” he said.

The workforce centers are the frontlines in a city that faces the most severe downturn in years. Job losses continue to mount; the jobless rate jumped to 10.3 percent in September and forecasts say it’s not likely to peak for at least another year.

It is against this bleak backdrop that Mayor Michael R. Bloomberg’s overhaul of job development centers is being put to the test. Despite critics who say he hasn’t done enough, the mayor’s emphasis on building strong relationships with businesses that do the hiring—stressing placement over training—is seen as the reason for the overhaul’s success.

The change in focus was long overdue, according to David J. Fischer, the project director for workforce development and social policy at the Center for an Urban Future. “It’s crucial to get employers on board,” Fischer said. The mayor’s shift in focus “has been very good. It was absolutely the right decision,” he said.

Fischer believes that while Mayor Bloomberg deserves credit, it may be more because he overhauled a system that none of his predecessors took seriously.

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NYC homicides on pace to set record-low number

Crime continues to fall in New York City, the mayor and the commissioner of the NYPD said this month, and they boasted about how New York is still the safest big city in the country, according to new data from the FBI’s Crime in the United States, the Uniform Crime Report from 2008.

Criminologists often say that the murder rate is the best indicator when forecasting overall crime. If this is the case, then New York City is doing quite well this year (that is, if you can ever say that when you’re talking about murders). The city is on pace in to hit a record-low number of homicides in 2009—while the number stood at 325 as of Sept. 18, the NYPD projects it will rise to 457 by year’s end. While still a lot, the number is the lowest in nearly 50 years since the police department began keeping the data in 1962. The previous low was 497 in 2007.

The high was in 1990, at the height of the crack cocaine epidemic, when there were 2,245 homicides. That year was also in the midst of a hard-hitting economic downturn in the city, and unemployment was on the rise. Perhaps that’s why some criminologists are thankful about this year’s numbers, but still nervous about what is to come. The city is again in a recession in 2009 and unemployment jumped to 10.3 percent last month, hitting double digits for the first time in 16 years. The unemployment rate is not expected to hit its peak for at least another year.

One also begins to wonder about crime statistics kept by the city—especially in a year when the mayor is up for re-election.

While we should all be happy about crime being lower, it is interesting to note that the NYPD’s rate of the number of homicides solved in a year, compared to number of murders in that year, stands at about 70 percent, which is the same as it was about 15 years ago. So can the mayor and the NYPD really take so much credit? (Not to make light of this all, but I’m assuming that topping the list of unsolved homicides is the very first murder recorded in New York City from 400 years ago.)

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City’s Unemployment Rate Jumps Higher Than National Rate, Despite Addition of Jobs

By Kieran K. Meadows

New York City’s unemployment rate soared to 9.6 percent in July, up from 9.4 percent in June, making it the first month in which the city’s rate was higher than the national rate, according to data released by the state Department of Labor. The U.S. unemployment rate currently stands at 9.4 percent.

“This is something we’ve been expecting for awhile,” said James Brown, the principal economist for the New York State Labor Department. The city was actually quite late into this national recession, he said, compared to some other parts of the country, which saw their economies slowing down since 2006.

“We had pretty positive numbers well into 2008, but we are slipping fast,” Brown said.

The city’s economy has weakened significantly since this same time last year, when the unemployment rate was more than four percentage points lower. Since August 2008, the month the city entered the recession—almost a year behind the nation—it has lost 72,300 jobs.

Yet, in the face of these bleak numbers, there was job growth in the city in July, after months of steady declines. The city added 39,200 jobs in July, according to seasonally-adjusted data from Eastern Consolidated, a real estate investment services company.

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Red Hook Residents Say Big-Box Stores Broke Job Promises

By Kieran K. Meadows

Red Hook residents were deeply divided eight years ago over the building of a large Fairway supermarket on the waterfront. Proponents said it would bring jobs. Opponents said it would be the beginning of the end of the historic waterfront and would bring tons of traffic to quiet streets.

A similar battle erupted four years ago when the Swedish furniture giant Ikea eyed a 340,000 square former shipyard down the street. The argument came down to economic development and the promise of jobs, versus environmental concerns and neighborhood preservation.

“The people in here, in the projects, everybody wanted Ikea to come here, cause they wanted jobs,” said Alisa Pizarro, an 18 year resident of the Red Hook Houses, a public housing project just blocks from the store. “They said they’d give us jobs so we’d say, ‘Yeah come to the neighborhood.’ ”

More than six months after Ikea opened and four years after Fairway, some residents say that the promises of jobs for local residents—pledges that Fairway and Ikea made central to their case for building the giant big-box stores along the Red Hook waterfront—have been broken.

While some local jobseekers were hired, the residents say the stores let many go in favor of people from outside the community. This situation has only served to exacerbate the unemployment dilemna in Red Hook, particularly in the Houses, the largest public housing project in Brooklyn.

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