NYC Construction Jobs Slow rebound threatens economic recovery



As New York City emerges from the economic hole created by the pandemic, the construction industry is sending out a warning signal about how difficult it will be to recover from the worst downturn since the Great Depression.

Despite being one of the first industries allowed to return to work after shutting down 15 months ago, New York City’s construction sector remains 25,000 jobs below its pre-coronavirus peak.

Hopes of overcoming the withering backlog of planned construction rest largely on President Joe Biden’s efforts to pass an infrastructure plan priced at around $ 1,000 billion. Meanwhile, uncertainty over who will be the next mayor and the political fate of Governor Andrew Cuomo injects more unknowns at a critical time.

“The best and fastest way to restart New York’s economy and get people back to work is with large-scale infrastructure projects backed by the federal government. Following such a difficult and devastating time, the building industry is poised to lead the recovery across our country, ”said Carlo Scissura, Managing Director of the New York Building Congress.

The city created 41,300 jobs in May, the fourth consecutive month of increases as the unemployment rate fell to 10.9% from 11.4% in April, the state Labor Department reported on the week. last. The biggest gains came in restaurants and the arts – the two sectors most affected by the coronavirus crisis – and transportation.

Yet New York remains 510,000 jobs below its pre-pandemic total of nearly 4.7 million. As a percentage, only San Francisco and Los Angeles have recovered fewer jobs than New York among the 10 largest cities in the country, according to an analysis by James Parrott, an economist at the New School.

Meanwhile, the city’s unemployment rate is nearly double the national average.

How the bottom fell

The construction industry is crucial as it offers relatively well-paying jobs that don’t require advanced degrees, becoming an economic lifeline for many immigrants and workers of color.

The average salary in the industry reached $ 87,200 in 2020, the fourth highest of any sector in the city, according to a new report of the State Comptroller Office. Immigrants occupy about half of the jobs, most from Latin America and the Caribbean.

About a quarter of jobs go to suburban commuters. Hispanics and white workers each make up about a third of the workforce.

“Go to a construction site today and you will see the diverse composition of the workforce,” said Gary LaBarbera, president of the Building and Construction Trades Council, an umbrella labor group.

He added that 68% of all apprentices are workers of color.

The pandemic disrupted what had been a decade-long expansion based on the city’s booming economy, helping to fuel its record gains.

The industry created jobs for eight consecutive years through 2019, bringing the total to an all-time high of 161,300, making construction the fastest growing sector during that period. Construction spending has grown an average of 20% over this period, reaching a record $ 61 billion in 2019.

Then the bottom fell.

Spending fell $ 5 billion next year and is expected to remain stable for at least two years. Only two new projects over 300,000 square feet were granted permits in the first three months of the year. That’s compared to 405 requests for these projects last year.

“When we saw other downturns, it typically took up to five years for the construction industry to get back to where it was,” state comptroller Thomas DiNapoli said.

Loom Large Airport and Prisons

Even sustaining current activity and employment levels depends mainly on public spending. Insiders expect a post-pandemic travel boom to spur an acceleration in the $ 15 billion Kennedy Airport overhaul pushed by Cuomo. But last week, the governor’s controversial plan to build a $ 2 billion AirTrain to LaGuardia Airport secured delayed by the federal government at a time when it is under investigation into charges of sexual harassment.

The industry is also counting on the city’s $ 8.5 billion program to replace Rikers Island with smaller prisons in four of the five boroughs, although it is not clear whether the next mayor will be committed to the plan. – the main candidates have a variety of positions. It is also unclear how development-friendly replacement for Mayor Bill de Blasio will be.

The long-delayed federal approval of the Gateway tunnel project under the Hudson River offered a potential boost for construction work, pending the passage of a set of infrastructure. But elsewhere on the transport front, the MTA’s ambitious $ 51 billion investment plan remains precarious given the agency’s financial difficulties as ridership improves, but remains well below target levels. ‘before the pandemic.

MTA Development Director Janno Lieber (right) and Governor Andrew Cuomo lead a tour of the East Side Access station under Grand Central Terminal on May 27, 2021.
Kevin P. Coughlin / Office of Governor Cuomo

100 hotel projects are also at risk, half of which are in boroughs outside of Manhattan. With tourism so far below economically profitable levels for hotels, the cancellation of some of these projects seems likely.

Key to the construction industry’s fortunes, stakeholders say, will be the size of the infrastructure program the Biden administration can push through Congress and where the money goes.

“A big part of what has made the construction industry work is government spending,” DiNapoli said. The pending proposal from a major infrastructure industry outside of Washington would be a home run for us. “



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