The IBO projects that the Big Apple will continue to shed jobs through 2021 — though the rate of losses is expected to slow dramatically — and that it will take until 2022 for a rebound to get underway.
“Strong gains in employment and income in the city are not expected until calendar year 2022,” the report says. “Although the job losses are concentrated in retail trade, leisure and hospitality, and eating and drinking establishments, virtually every industry in the city will lose jobs, with employment not expected to recover its pre-COVID-19 levels before 2024.”
The IBO projects that employers in the five boroughs will have shed 388,000 jobs between April and June and will ax another 58,000 between July and September — 446,000 in total.
New York’s tourism, retail and hospitality industries have been hit the hardest by the downturn and will struggle to recover as traveling remains difficult and improvements in video conference technology reduce demand.
The analysis from the city’s budget watchdog also projects the city’s budget deficit is at least $2 billion worse than forecast by Mayor Bill de Blasio’s budget.
“IBO now expects 2020 tax revenues to be $2.9 billion (4.6 percent) lower than we forecast in our February outlook and $6.6 billion (9.9 percent) lower in 2021, a combined shortfall of $9.5 billion over the two fiscal years; the de Blasio Administration estimates the shortfall will be $7.4 billion,” it noted, reaffirming its past projections, before warning the state’s own COVID-19 budget crisis means City Hall’s budget pain will likely worsen.
“IBO’s estimates of revenues and expenditures under the contours of the Mayor’s Executive Budget indicate that additional actions will be needed to achieve balance,” the IBO added.
For instance, de Blasio’s $89.3 billion budget proposal to the City Council in April would nix popular summer programs like summer youth employment and public pools. But, it spared the city’s workforce from potential furloughs or wage freezes.
Since then, de Blasio has repeatedly demurred when asked if the city’s looming cash crunch could force him to take those steps, saying that he’s banking on federal aid to avoid making the choice. Gov. Andrew Cuomo has already used his executive powers to order a wage freeze for many state employees.
“I don’t want to take away from working people. I want to protect people’s livelihoods,” Hizzoner said during his daily briefing on Monday. “I want to protect their income and if we get the help we all deserve from the federal government we’ll be able to do that.”
Additional reporting by Julia Marsh