Bi-County Study on Pandemic’s Economic Impact Reveals:
Long Island Shed Jobs Faster than NYC & All Other Suburban Counties in State
Net job loss of 220,000 has highest impact on less educated workers, low paying professions and minority communities & results in $61 billion decrease in local economic activity
Curran and Bellone call on Congress to deliver significant financial relief to counties to jumpstart regional economy
Nassau County, NY - July 9, 2020 – Today, Nassau County Executive Laura Curran and Suffolk County Executive Steve Bellone shared the results of a comprehensive study analyzing the impact of COVID-19 pandemic on Long Island’s economy as well as outlining recovery projections and strategies. The report, developed by distinguished consulting firm HR&A Advisors with support from the Nassau County IDA and Suffolk County IDA, breaks down job losses as a result of the pandemic, revealing that Long Island is shedding jobs at a faster rate than New York City and all other suburban counties in the state. Among other grim statistics, the analysis shows a disproportionate share of the 220,000 jobs lost across Long Island include low-paying jobs, workers with low levels of education and Hispanic/Latino workers.
This study is part of Nassau and Suffolk Counties’ ongoing and collaborative efforts to measure the real-time economic impact on each industry sector, their workforces, our geographies and populations and how this in turn impacts our local governments. The report identifies recovery projections and strategies, emphasizing the necessity of support from the State and Federal government. Both County Executives reiterated their request to Congress for direct financial relief to both counties in the next federal recovery bill to deal with the economic distress caused by COVID-19.
“With the fastest rise of unemployment on record, leading to a complete fall off of economic activity, this report outlines the economic shock to our local economy and the continued pain among our businesses and minority communities – hit hardest by the pandemic in more ways than one,” said Nassau County Executive Curran. “I will continue to do everything I can on the County level to revive our economy and address these disparities – from our loan program for MWBE businesses and businesses in economically distressed areas, to free PPE kits to small businesses, to our food distributions that have fed 20,000 local families in need. But this report underscores that we cannot recover from this devastating crisis alone – Washington needs to step in now with support for local governments so we can continue to provide vital services for our residents.”
"This pandemic has caused hundreds of thousands of Long Islanders to lose their jobs, shuttered businesses, and turned our local economy upside down," said Suffolk County Executive Bellone. "This report makes clear that federal aid from Congress is necessary if our region is going to rebound and recover from the worst economic crisis since the Great Depression.”
“Though history can often serve as a guide, few parallels exist between previous economic recessions and the current one caused by the ongoing COVID-19 pandemic. In the absence of precedent, HR&A developed an analytic framework that was informed by business surveys and interviews with a cross-section of businesses across the region to understand how, specifically, this disaster has impacted the regional economy, including the geographies, populations, and business sectors that have been disproportionately impacted,” said HR&A Partner Shuprotim Bhaumik. “As local governments and business leaders shift their focus from emergency response to recovery, we believe that this work will inform the pursuit of a just and resilient recovery for the region, one that grapples with the underlying economic and social challenges that have made COVID-19 so devastating for marginalized and vulnerable populations on Long Island.”
“This report clearly shows the need for significant federal assistance to help both counties and especially our small businesses and downtowns reopen, survive and thrive. The Nassau IDA is prepared to take whatever actions we can implement to revive the Island’s economy,” said Nassau County IDA Chairman Richie Kessel.
“This report is essential in understanding in finer detail the various impacts of the COVID-19 pandemic to assist in creating a strategic recovery plan for the region, which to be implemented, must be supported by further federal relief in order to minimize long term economic damage and other negative impacts on the region for several years to come,” said Suffolk County IDA Chair Natalie Wright.
Key Findings:
Total Job Losses
- Long Island businesses shed jobs at a faster rate compared to NYC, its northern suburbs, New York State, and the U.S. as a whole during the initial months of the crisis.
- Nassau and Suffolk had a 21.9% change in total non-farm employment (seasonally adjusted) while NYC had a 20.1% change and the national average was 14.5%.
- Long Island businesses shed 270K jobs during the first 2 months of the crisis.
- Businesses recouped 48K jobs in May, as some economic activity curtailed during the pandemic resumed.
- Continued supply chain disruptions and reductions in consumer demand are expected to result in an additional job loss beyond those recorded to-date. Total job losses in 2020 are expected to reach 375K relative to pre-COVID levels.
Industries Hit Hardest
- Top seven industry sectors with the most job losses on Long Island
- Hospitality: 82,000
- Healthcare/Social Assist.: 59,000
- Retail: 52,000
- Construction: 37,000
- Administrative + Waste Services: 27,000
- Personal Services: 26,000
- Real Estate: 24,000
Highest Impact on Less Educated Workers & Low Earning Professions
- Projected job losses are heavily concentrated among low-earning professions and workers without a post-secondary education.
- 68% of all job losses are in sectors paying less than the regional average annual wage of $61,600
- 73% of job losses are among workers with a high school diploma.
- The region’s lowest-paying sector—Hospitality—experienced the greatest decline during initial months of the crisis, with employment down two-thirds.
Impact on Low-Income & Minority Communities
- Hispanic + Latino workers make up a disproportionate share of Hospitality workers on Long Island (27% vs. 17% of all workers), indicating disparate impacts felt among minority populations.
- In addition to bearing a disproportionate share of job losses, lower-income households and communities of color may suffer from slower recovery rates owing to pre-existing inequities like limited credit access, lower mobility and access to opportunity, and lack of affordable housing.
Job Loss Impact on Economic Activity & County Budgets
- 375K net job losses (vs. pre COVID levels) will result in $21 billion in earnings losses among Long Island workers and $61 billion in reduced economic activity.
- HR&A estimates the impact of COVID-related job losses (only) on County finances will be up to $360 million in Nassau and $325 million in Suffolk for FY 2020.
- Note - Sales tax revenue makes up nearly 40% of Nassau and Suffolk County’s budgets.
Business Closures
- 8% of small businesses (<25 employees) in Nassau County may close this year, compared to 3% of businesses with more than 25 employees.
- 50% of businesses in Suffolk County have closed temporarily; 1% of businesses have closed permanently
- 12% of real estate firms report that 21%-50% of tenants are closing down their business.
- One-third of industrial businesses on Long Island are at risk of closing.
- Note - 64% of business establishments on Long Island have 5 employees or less.
Targeted Financial Aid Key to Recovery
- Additional financial resources are needed to advance the Long Island region’s recovery, including budgetary relief for local governments as well as additional support for people, businesses, and places, to include:
- Federal funding as outlined in the HEROES Act passed by the House, which included $375B in budgetary relief for local governments to help avoid cuts to public services, layoffs, and/or tax increases, all of which could further negatively impact the local economy.
- Extension of benefits for workers and businesses given the on-going impacts of the pandemic and the likelihood of multi-year impacts.
- Federal infrastructure funds to address long-term impacts to the built environment, spur job creation, and transform the region to become more resilient in the face of future cataclysmic events and economic shocks.
- Continued federal relief programs to support small businesses, encourage new businesses, and recover heavily impacted industries.
- Assistance to states and counties for workforce development, job retraining, and equity initiatives in disproportionately affected communities and populations.
The study applied the results of several studies conducted by the counties, including two created and hosted by Hofstra, to assess the impact that the coronavirus is having on local businesses and get an update on how they were fairing as they prepared to reopen. The study utilized a variety of other data sources to project the initial economic shock from COVID-19 by sector, including documented monthly job losses from the U.S. Bureau of Labor Statistics and weekly initial Unemployment Insurance claims from the New York State Department of Labor. The report also expanded upon precedent impact studies and methodologies and consults other economic forecasts to identify differential rates of recovery and perspectives of local industry groups and civic organizations to project “new normal” levels of economic activity.
The study was authored by HR&A Advisors, a mission-driven public policy, economic development, and urban resilience consulting firm with deep expertise working with local governments, community organizations, and private and philanthropic partners to rapidly address physical and economic moments of crisis while facilitating planning and implementation efforts to help communities transition from recovery to long-term resilience.
To view the full report, visit: www.nassaucountyny.gov/EconomicImpact