New York Metro Area workforce: Challenges and opportunities for growth
November 28, 2022 | Interactive
By Jonathan Law, Maurice Obeid, Eleonora Sharef, Anthony Shorris, and Yael Taqqu
Historically a talent magnet, the New York City region faces a shrinking workforce and a growing mismatch between jobs and skillsets. But interventions could help rebuild its labor force and boost inclusiveness.
New York City has a history of bouncing back from even the most difficult of challenges. From the Great Depression and 9/11 to the Great Recession and Hurricane Sandy, the city and its surrounding areas have defied critics and doomsayers to emerge stronger and more resilient. The COVID-19 pandemic is no exception. Like other major metropolitan areas around the globe, New York City’s regional economy and its workforce suffered an enormous blow in 2020. But while economic growth has broadly rebounded, the region’s labor force has not, and it faces considerable headwinds.
From declining labor force participation to a growing mismatch between available jobs and desired skillsets, the New York City metro area’s economy is not working for everyone and its talent challenges are significant. But as any New Yorker will tell you, these obstacles are not insurmountable. The city and its surrounding areas currently boast one of the most educated, productive, and diverse workforces on the planet. In short, New York City’s superpower has long been and continues to be its people: from the talented New Yorkers born and raised in the five boroughs to the immigrants from the US and abroad that propel the metropolitan area’s key growth industries. New York can build on this historic bedrock and pursue initiatives to maintain and advance its global competitiveness as well as the vibrant and inclusive workforce on which it depends.
1
Hit hard by COVID-19, economic growth in the NYC metro area has rebounded to new heights.
And is a standout among its domestic peers.
2The region’s economy is driven by a large, highly productive, educated, and diverse workforce.
3
But while the labor force in other large US cities has largely recovered …
… the NYC metro area has lost 400,000 active and available workers since 2020.
Even before COVID-19 struck, the region had relatively low labor force participation.
4Immigrants historically flocked to the area from other parts of the United States and the world.
Drawn by the promise of a new beginning, they punch above their weight in labor force participation.
But the metro area’s immigrant population growth is slowing.
Affordable housing, historically in short supply, is even scarcer—especially for workers making $50,000 a year or less—potentially restraining regional growth.
5And there’s a growing divide between available workers and the education credentials employers want …
Higher education institutions in the New York region can only supply 50% of projected workers needed in some of the fastest growing occupations
… including New Yorkers whose jobs are most at risk of being impacted by automation
Jobs that don’t require a bachelor’s degree are 2× more likely to be impacted by automation than jobs that require a bachelor’s degree
Black and/or Hispanic workers comprise 47% of workers in the top 7 occupations most impacted by automation
The New York City metro area is a global economic heavyweight and a social and cultural hub thanks to its superpower: its diverse and talented people.
While it faces formidable labor force challenges, the region’s leaders and communities have overcome plenty of obstacles before. And with trademark grit, ingenuity, and commitment, they can do it again.
The data cited in this piece are drawn from McKinsey analysis of data from the US Census Bureau, Bureau of Labor Statistics, Lightcast, and other government sources, as well as proprietary McKinsey research. All regional data reflects the New York metropolitan area as defined by the US Department of Labor, Bureau of Labor Statistics. Details on specific initiatives are pulled from the respective program’s website.
ABOUT THE AUTHOR(S)
Jonathan Law is a senior partner; Maurice Obeid, Eleonora Sharef, and Anthony Shorris are partners in the New York City office. Yael Taqqu is managing partner of the New York office.
The authors wish to thank Ryan Connor, Jason Forrest, Kunal Kamath, Ryan Luby, John‑Michael Maas, James Rice, Keith Rondinelli, and Patricia Sabga for their contributions to this article.
