While much of the us undergoes a halting recovery from the ‘contained depression’ of the early 1990s, America’s largest city has remained mired in its sharpest downturn since the days of Fiorello LaGuardia. New York’s unemployment rate—which spiked in January 1993 at 13.4 per cent—has continued at double-digit levels for nearly three years. In the rest of America, the recovery has produced two million new jobs, and the labour force has increased by four million. But New York’s labour force has shrunk by 200,000, and it is now going into its fifth year of job shrinkage: almost 400,000 payroll jobs have disappeared. Truly, Gotham has become the Bermuda Triangle of job loss.

Times are tough of course in most us central cities, but New York’s labour market has become truly aberrant. In a recent ranking of the 343 main metropolitan areas in Canada and the us, the Places-Rated Almanac ranked the city’s job market 343rd—dead last. Most recently available figures on unemployment within the 272 largest us metropolises show only seven with higher unemployment rates: they are almost entirely agricultural towns in California and Texas. No large city has a higher rate than New York.

The city’s unemployment rate averages many age, gender and ethnic outcomes. Analysis reveals even greater deviations from national norms. New York consistently ranks among the highest in the share of its youth who are unemployed and at the bottom in youth labour-force participation. In New York, white youth participate in the labour market at a rate of about 20 per cent. This is a fraction of the rate for black youth nationally. And in New York, black youth work at half the local white rate.

New York’s anomalous labour-market performance can’t be explained in conventional terms. There is no ‘jobs–spatial-skills mismatch’ in the New York area. The plentiful ‘information age’ jobs—for which the jobless were supposed to be mismatched—are shrinking as fast as manufacturing jobs. And there are no jobs for city jobless to be matched up with ‘out there’ in the suburbs. New York’s suburbs now have an industrial structure very similar to the city’s. And unemployment rates for suburban blacks are within a point or two of the rate for city blacks—averaging nearly 20 per cent.footnote1

Just to raise New York’s labour-force participation rate up to the national average of 66 per cent and lower the city’s unemployment rate down to the national average of 6.2 per cent would require roughly a million new jobs.

The harsh terms of its labour market—New York also has one of the lowest manufacturing wage rates in the country—explain why the city now has about two million people who are officially poor. This is an amount more than the entire population of Philadelphia. . .and throw in Pittsburgh. But the official estimate made by the Current Population Survey (cps) in 1990 probably understates the number of New York City poor today. First of all, because the estimate was made before the city incurred most of its 400,000 job loss. Second, because the us poverty line is drawn at a single level all across the country: $14,279 a year for a family of four. New York, again according to Places-Rated, ranks worst in cost-of-living. Evidently, it must be harder to live on a one-size-suits-all poverty budget in New York than elsewhere.

While it conflicts with much of the higher poverty discourse, which stresses attitudinal factors, the simple reality is this: because there are relatively few jobs, and the jobs available pay badly, millions of New Yorkers are poor. Because they are poor, they go on welfare. Welfare rolls have been increasing at an annual rate of over 11 per cent since the 1989 downturn began. The number of welfare cases seems to be roughly comparable to the last big downturn in the city’s economy during the 1975 fiscal crisis. But this is misleading because people who once counted as recipients—those who receive Supplemental Security Income—are no longer counted. If you count just the three basic forms of welfare—leaving out food stamps—the three forms which you have to be certifiably indigent to get, New York City has 1.79 million people on welfare. One out of every four New Yorkers is a pauper. In the Bronx, the total is about 40 per cent.