Second, a stagnant and uncertain local economy is exacerbating ongoing racial and ethnic labor market disparities. The first six months of 2025 saw job declines in most industries. Growth in health care and social assistance, government, and information jobs offset these losses to produce a net gain of 5,700 non-farm payroll jobs. But less than 1,000 of those were in the private sector, where jobs grew a mere 0.02 percentage points. Nationally, private sector jobs grew by 0.5 percentage points during that time. While in 2024 New York City job growth was stronger than in the nation as a whole, halfway through 2025 the city’s job growth looks much weaker.
This stagnant growth, along with shifts in the industrial composition of jobs, continues to produce race and gender labor market disparities in the city. Growing industries – like health care and social assistance where women and Black men are disproportionately employed – may be drawing new people into the labor market, where demand for workers is facilitating a less competitive and discriminatory job market. Second, job decline in certain industries – like professional, scientific and technical, and finance and insurance industries where white and Asian people of all genders are disproportionately employed – may be leading to more competition and bias, with educational attainment, years on the job, or networks helping some workers and hurting others.
Slow or stagnant economic growth has significant racial job market effects. Extensive research has shown that in recessions and periods of slow growth, employment rates for Black workers fall more than for white workers, while in periods of sustained high growth, employment rates for Black people rise faster than they do for white people. This is a cause for concern, as estimates of GDP growth released yesterday show the U.S. economy slowed in the first half of 2025, highlighting that President Trump’s policies create conditions that will likely be inconducive to job growth in the near future.
New York City faces particular challenges in this macroeconomic environment. Economic uncertainty is impacting high-paying jobs in the important finance sector, which – rightly or wrongly – the city relies on to support consumer spending and, therefore, job growth in areas like retail, accommodation and food services, and arts, entertainment and recreation, which account for 15 percent of all payroll jobs in the city.
The Trump administration’s deportation efforts are also anticipated to have a strong chilling effect on the local economy. Recent analysis from the Economic Policy Institute highlights how deportation efforts can directly reduce the number of jobs in the economy for both immigrant and U.S.-born workers. New York City’s lackluster job growth over the past six months reflects this. The future impact will likely be even more severe with this month’s enactment of the federal One Big Beautiful Bill Act (OBBBA), which provides funds to ramp up deportations threefold. There will be wrenching human costs of such dramatically stepped-up enforcement. It will also mean fewer jobs in the economy. Combined with an affordability crisis impacting low- and middle-income households, that will translate to less disposable income that can stimulate job growth.
As of June 2025, health care and social assistance accounted for 22 percent of all payroll jobs in the city. Demand for these jobs is contingent on residents having health insurance. OBBBA cuts are expected to result in 860,000 New York City residents losing Medicaid, some 22 percent of total Medicaid enrollment in the city today. Implementation of OBBBA will have a huge, years-long impact on demand for and viability of health care services in the city. It will undermine the fiscal stability of the State and the ability to maintain critical services. Not only will this disproportionately impact low-income households, but it may also threaten jobs that have resulted in employment rate growth for women of color in particular. This could have especially dire consequences for Hispanic immigrant households where such jobs for women seem to be offsetting increased job insecurity for men. Furthermore, the city may no longer be able to rely on the health care and social assistance sectors as drivers of job growth in the city.
What can local policymakers do to mitigate these trends?
Without public and private sector intervention, continued labor market inequality will contribute to racial income and wealth inequality, unequal experiences of economic insecurity and precarity, and inhibit social and economic well-being and mobility. Given the challenges posed by the federal government, New York City and State will need to work strategically and creatively to address these problems.
Most urgent and least costly to local government will be measures to protect immigrants. The city must also improve worker protections against wage theft and workplace discrimination including in gender pay inequities, and can draw on proposals outlined by City Comptroller Brad Lander in his recent mayoral campaign.
Investment in housing development and climate resiliency – two things the city desperately needs – can stimulate job growth in fields that have a track record of hiring men of color. Stabilizing public benefits to mitigate federal cuts will also provide a safety net for people out of work and low-wage workers can help maintain demand for health care services and consumer spending, both critical for economic growth in the city.