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Brian Lehrer: Brian Lehrer on WNYC. Now to some reporting on the state of New York City's economy right now. My guest who'll join us in a minute is Greg David, who many of you know. He's reported on the local economy for many years these days at the nonprofit news organization THE CITY. He has a few recent stories that add nuance to the notion of a robust economic recovery from the pandemic in New York City. We'll talk mainly about three of those stories which get at growing wage inequality, Wall Street's resilience as a local economic sector, and what he calls the deafening silence of business leaders in the face of political turmoil. That means Eric Adams's scandals.

The bottom line, Greg reports, is that it's high-wage workers seeing the most significant gains while lower-wage New Yorkers struggle to keep pace. Wall Street, meanwhile, is having an outsized impact on the city's economy, and one key constituency may still be backing embattled Mayor Eric Adams. We'll talk about that. Greg David, always great to have you. Welcome back to WNYC.

Greg David: Thank you, Brian. Glad to be here.

Brian Lehrer: Listeners, you can help us report the story on any of those things that we just laid out, 212-433-WNYC, from your experience or with your questions for Greg David from the news organization THE CITY, 212-433-WNYC, 212-433-9692. Let's start with the bad news. You describe a hollowing out of New York's economy with significant losses in middle-wage jobs. What are you seeing?

Greg David: The Federal Reserve Bank of New York did a major study they released about ten days ago, and it really shows that what jobs we've gained have been at both the top and the low end. Some of our industries are doing very well. Wall Street's doing solidly. Tech is continuing to grow as a major force in the city's economy. Professional services, lawyers, accountants, et cetera, whose work is because of those other two industries, are all doing well. They all pay high wages, Wall Street, exceptionally high.

At the low end, we're growing healthcare jobs, especially home healthcare jobs, which are the lowest paid jobs practically we have in this economy, mostly part-time, but we're not growing jobs in the middle. As a matter of fact, we've been losing jobs in the middle even before the pandemic, and the losses have increased. That's clearly a sign of an economy that's unbalanced and not necessarily good for the long term.

Brian Lehrer: Meanwhile, the rich are getting richer, people in higher-income jobs are getting meaningful raises.

Greg David: That's right. This is a study that came from the Center for New York City Affairs at The New School, which has been really delving into this issue in many different ways over the last couple years. The national story is pretty clear. Nationwide, low-wage workers have done the best in the pandemic and the pandemic recovery. They've done the best for two primary reasons, one of which is those parts of the economy nationally have been pretty tight and employers have had to raise wages.

Secondly, states around the country have been raising the minimum wage in that period, and that's helped as well. Now, in New York, we have the opposite. Instead of low-wage workers having the biggest gains, high-wage workers are having the biggest gains. In part, that's because of that's the strength of our economy. Tech, Wall Street, high-paid jobs. It's also because we have fewer low-- there's less market demand for those hospitality jobs and retail jobs in New York than elsewhere.

Our unemployment rate has remained higher than the national rate through the pandemic and today. Here's where I think I have my biggest argument with the administration. When I write economic stories, I think I'm always arguing with the Adams's administration, but they continue to say, "Oh, we're at a record level of jobs. Isn't that great? We regained all the jobs lost in the pandemic." We regained all the jobs lost in the pandemic 18 months after the rest of the country did. The rest of the country is at record levels, 4% above the pre-pandemic. We're about 2% above. The administration says the glass is overflowing, and I keep writing that the glass is half full.

Brian Lehrer: Is it Adam's fault in any way?

Greg David: No, it's not Adam's fault in any way. I do think it's a sign that the policies that this administration has tried to implement aren't working well enough. This is not just in economics. This is a broad assessment of this administration. This administration is so focused on claiming success that it is not focused on where the problems are, and that's what I think is going on here. When the mayor, time after time, says, "Look at how great the economy is," and saying, "We've made progress, but we have a lot more to make."

Brian Lehrer: Just coming back to this disparity between the wage increases for higher-wage New Yorkers and lower-wage ones, the stats that you have are high-wage workers saw an 18% pay increase. I'm not sure over exactly what period of time that is. You tell me.

Greg David: 2019 to 2023, so it's during the pandemic and the recovery.

Brian Lehrer: Beginning of the recovery. 18% wage increase for high-wage workers, only a 6% increase for low-wage workers. How much of that, if any, is because the tourism industry never fully recovered? People just don't travel to New York as tourists as much as they did before the pandemic, or is that not a fact?

Greg David: We have not made it back to pre-pandemic, the 66 million visitors in 2019, but we're going to be at 63, so a lot have come back. It's a more complicated answer. International tourists have not come back as much. That's very important because they spend more. The biggest weakness in international travel is from China, which had risen to being the second largest source of international tourists. And that's really bad because they stayed the longest and spent the most. The Chinese tourists aren't back for a whole series of reasons, including the Chinese economy is not great and the tensions between the US and China.

Yes, it's a factor. It's a factor because some hospitality jobs have not come back and some retail jobs have not come back. The other thing that's really important about this disparity is-- and this is another thing the administration is not focused on. In the last year or so, the vast majority of job gains in New York City have come from home health care. Home health care is an incredibly low-paying profession. It's mostly part-time work. Governor Kathy Hochul has called the program that's employing these people a racket. It's important to remember that those jobs are being paid for with tax dollars.

Brian Lehrer: It's grown so much as part of the Medicaid program for older New Yorkers without enough money to hire home health aides on their own, correct?

Greg David: That's correct. As a matter of fact, if you watch television, you can't escape the ads, especially around the news broadcasts. We should be recognizing, and the Adams administration should be recognizing much more clearly that the growth we've had in the last year is incredibly fragile. That home health care program is probably unsustainable. Albany is already taking steps to curb it. We're adding-- look, I don't want people to get crazed about this, but you can argue good jobs and not-so-good jobs based on how much they pay and how much they contribute to the economy. From an economic perspective, these are not-so-good jobs both for the people who have them and for the economy.

Brian Lehrer: Are you saying that as the population of New York ages, there's going to be so much more demand through the Medicaid program for home health aides that the state isn't going to be able to keep up with that cost and so they're not going to fund home health aide salaries to the extent that's really going to be needed by those older New Yorkers.

Greg David: I think as soon as the state budget crunch hits, and I don't know when it's going to hit, it's off in the future somewhere, but could be sometime next year, we're going to have to cut that program. Now, there are a lot of doubts about what exactly is going on in that program, do people really need the services that are being provided? I think we're going to see a lot more digging into how that program actually works. Its cost has ballooned. I think it's $6 billion now. I might have that wrong. Somebody might correct me. It is unsustainable to grow it at the current rate? Yes.

Brian Lehrer: 212-433-WNYC. We have some very interesting questions coming in on the phones and in text messages. 212-433-9692. I'll read you a text first. We were just talking about lower-wage workers. Here's one on higher-wage workers. Listener writes, "Tech has not been growing. It's clearly in an industry-local recession. You need to look no further than the layoffs at Microsoft, Amazon, Google, et cetera. There isn't any growth in the startup sector yet because of the high interest rates." Do you agree with that?

Greg David: No, sorry, don't agree with that. Those layoffs have mostly been in the Valley. While there were some layoffs in New York, they were not nearly as severe. We continue to produce lots of startups. I just wrote a major story about AI in New York, and AI is booming in New York, and it's booming in New York for the same reason tech boomed in New York 20 years ago. We're not doing a lot of basic AI work. Instead, when you have an idea to implement AI in a commercial sense, you come to New York.

I talked to one startup entrepreneur who's using AI to make the insurance submissions of large hospital chains more accurate. I talked to another AI startup that's working on phone trees that really work. When you call the restaurant, AI can really get you a reservation and tell you what the menu is.

Brian Lehrer: Can they get to what a human being representative-- Anyway, go ahead.

Greg David: He tells me that it's really human-like. He tells me it's really human-like. What can I tell you, Brian? Look, there was a little weakness in tech employment, but it is growing again, and it's, as a sector, doing very well in the city. As a matter of fact, venture capital investment in New York this year is going to be 75% larger than the year before. There is lots of money flowing in, and that investment is coming because of primarily AI. Tech is doing better in New York than it is in the valley. We are the number two tech center in the country, and we've been that way for a while, and nothing is going to change that. I don't see anything changing that in the near future.

Brian Lehrer: Jeffrey in Queens, you're on WNYC with Greg David. Hi, Jeffrey.

Jeffrey: Good morning, Brian, good morning, Greg. I was wondering whether or not there is a greater impact being caused by the recent demographic shift of people from high-cost-of-living states to lower-cost-of-living states. Anecdotally, I know a lot of people who, for example, have moved from the New York City area to other states like Texas. I just wanted to hear about the economic impact of that on unemployment here, on employment here, and on wages here. Thank you.

Brian Lehrer: Thank you, Jeffrey. Greg.

Greg David: Look, there was a big movement out of New York during the pandemic, but it's mostly been replaced. There's a lot of argument about what the statistics are. Now, a lot of this has been focused, and if you read the New York Post, it's endlessly in the New York Post about all of New York's highest well-off people heading to Florida. The other thing, and I was at a breakfast where this was really well discussed by Tom DiNapoli and Brad Lander. The people who are moving to Florida are of a certain age, and they might have moved to Florida anyway, and there are people coming to replace them.

I think there's a really good example of that in one of the most important hedge funds in the country called Citadel. When Ken Griffin got pissed off at the governor of Illinois, he closed up in Chicago and moved his main operation of Citadel to Florida, I think it cost Illinois a couple hundred million dollars in tax revenue from Griffin alone. You know what else he did? He moved people from Chicago to New York, and he's also working on building a skyscraper in New York to center his New York operations there.

We have lost some people. Many people are still moving to New York. The other thing I think that's important to note is that most of the movement to New York was to areas close to New York. It was into the suburbs, into New Jersey, et cetera. A lot of that was, it's sort of complicated. People with children are leaving New York all the time, often as the kids start to go to school. What happened in the pandemic is we had three groups that would have left over three consecutive years all move at once.

Now we're getting back to, I think, a more typical pattern where some families are moving out all the time and they tend to be replaced by young people, especially college and professional graduates moving in.

Brian Lehrer: Now that we've heard concern about people moving out of New York, here comes the corollary concern about people moving in. Sharon in Queens, you're on WNYC. Hello.

Sharon: Good morning. I'm trying to host a family reunion. We have it every July. I have almost 400 people coming into New York. Because of the state [crosstalk]--

Brian Lehrer: You got a lot of cousins, huh? I'm just kidding. Go ahead.

Sharon: Oh, yes. All over, eight generations. What we do is we go to a major city, and I'm trying to look for a decent hotel in New York City. It is ridiculous because the landlords of hotels have no restrictions. There are no laws on what they can do with their property. Most of the hotels I have visited, or half of them, are shelters. You go in and you smell smoke. You have people walking and hanging in the front, and I can't find a decent hotel for under $300 a night.

Brian Lehrer: Sharon, I'm going to leave it there-

Sharon: [crosstalk] what is going on?

Brian Lehrer: -because we're running out of time. Let me get you an answer to your question, and I apologize for cutting you short, but please do call us again. I want to take your questions seriously. Greg, shes talking about migrants being given a lot of hotel rooms as the city looks for places to shelter people. You can take her specific question, but also on the larger question of the impact in general on New York City's economy. Of the hundred thousand plus, whatever the real number is, recent asylum seekers in the last couple of years.

Greg David: It's right that we have removed about 15,000 to 20,000 hotel rooms and turned them into migrant shelters. These were the lowest cost, least desirable hotel rooms in the city. You know what? We've also removed 20,000 or so Airbnb options by cracking down on Airbnb. As a result is that hotel rates are very high. She's absolutely right. I bring people to New York. I actually have been able to find $250 rooms in July at a decent Times Square nice hotel. Yes, room rates in the summer are very high. They're also very cheap in January.

Yes, hotel rates are rising. The migrant issue is part of it, so is Airbnb, and so is the return of so many tourists. The broader question is long term, the New York City economy will be helped by the assimilation of migrants who have come to the city. We need to keep expanding the workforce. They will help to replace population that we may have lost in the pandemic. As you know, Donald Trump says that migrants are stealing what he calls "Black jobs".

I wrote a story about this. I looked into it very specifically. There is no evidence that's happening in New York. Migrants are not competing with native New Yorkers for the same jobs. Long-term immigration has been great for New York City, and it's likely to be great again in the future.

Brian Lehrer: Two last things real quick, before the clock strikes end of segment. You wrote about Wall Street's influence on the city's economy evolving, especially given the growth of other industries like tech, but an ongoing resilience of Wall Street as a sector here, which accounted for nearly $20 billion in state tax revenue and $5 billion in city tax revenue in the period you looked at. A lot of people have said for so many years, over so many crises that Wall Street would leave. It would leave after the financial crisis and the Occupy Wall Street movement turned politics more against them.

It would leave in the pandemic because of remote work. Why live in crowded, difficult New York when you could go wherever? How resilient is Wall Street? How much are we seeing a gradual decentralization of the finance sector in ways that are going to hurt New York? Real brief.

Greg David: Wall Street remains our most important industry. We have diversified the economy. That's great. Wall Street is not growing in New York. It's growing elsewhere. It's adding new jobs in places like Texas. Goldman Sachs's second biggest office is going to be in Texas. Nevertheless, Wall Street is our single most important industry because it pays its people so much and benefits our tax structure so much. Wall Street is not disappearing from New York. It has a solid foothold in New York. New York will always be the most important place for Wall Street. That's great for the economy, but we cannot expect it to grow here. It's not going to grow here. It's going to grow elsewhere.

Brian Lehrer: Last thing, the business sector. You identify the business community generally, including big business, one of the few remaining allies as a sector of Mayor Eric Adams, as so many New Yorkers think he should resign.

Greg David: Yes. Why is business supporting Eric Adams? First of all, business does not like to go against incumbents. Remember, incumbents have enormous power to make business people's lives difficult and to hurt their companies. Two, Eric Adams's policies are the policies of the business community. Keep crime down, be fiscally responsible, care about the economy, even given my comments before. They're aligned on policy.

Third, and most important, at the moment, none of the alternatives that have emerged so far in the mayoral campaign are seen as reasonable alternatives. They're all to the left of Adams. As a matter of fact, I've been particularly taken with the antipathy to Brad Lander, who I personally think is a smart and knowledgeable person. Everywhere I go, without prompting, for me, people bring up what a terrible person he would be as mayor because of his policies.

Brian Lehrer: He's the city comptroller who manages the city's finances now.

Greg David: Look, I know that Brad Lander is a pretty progressive politician, but I have been surprised at what I have found when business people just bring it up. Now he's trying to make some moves to-- he pulled back on a tax increase he proposed 18 months ago. He's appearing before business-oriented groups. We'll see if it makes a difference.

Brian Lehrer: Interesting.

Greg David: At the moment, he is not well-regarded in the business community.

Brian Lehrer: Greg David, contributor covering fiscal and economic issues for the news organization, THE CITY, and director of the business and economics reporting program and the Ravitch Fiscal Reporting Program at the Newmark Graduate School of Journalism at CUNY. Greg, thanks as always.

Greg David: Thank you.

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