How to strengthen NYC’s workforce

The bustle and beauty of New York too often obscure the widening gaps in opportunity that could make this great economic engine less competitive and less attractive to talent and capital. The metropolitan area’s gross domestic product, by far the country’s largest at $1.6 trillion per year, may now exceed pre-pandemic levels, for example, but the working-age population has been declining since 2011 — with an exceptionally steep drop during the pandemic.

Net population is falling on every front, according to McKinsey’s latest research, including births, domestic migration and international immigration. This drop is troubling given that immigrants comprise 36.1% of the local labor force. Meanwhile, labor force participation is the lowest among peer cities in the U.S.

The reasons for these shortfalls include the rising cost of living here. Rent and mortgage payments are rising faster than median incomes — and most residents who earn less than $50,000 per year spend well more than a third of their income on housing. Another major challenge is the widening gap between workers’ credentials and employers’ needs.

In the three occupation categories with the most job postings and strongest growth forecasts — management, health care, and computer and mathematical work — more than two-thirds of job postings require a bachelor’s degree, yet only about a third of unemployed New Yorkers have finished college.

Further, jobs that don’t require a bachelor’s degree are twice as likely to be affected by automation than jobs that do, disproportionately impacting Black and Hispanic New Yorkers who are over-represented in office support, food service, customer service, sales, and other occupations especially vulnerable to automation in this decade.

What can we do to build on the region’s many unique strengths? A lot, based on centuries of experience here and abroad. New York’s people and institutions have the resources and innovative character to advance the city’s global competitiveness and support the vibrant and inclusive workforce on which it depends.

Several initiatives from here and abroad have measurably made progress in closing these gaps. A few examples:

• The New York Jobs Council works with employers to align curricula and credentials with demand and helps local talent master new skills. By 2030, it aims to help 25,000 CUNY students find jobs and apprenticeships and have 100,000 New Yorkers hired by Jobs Council members, who include large and influential employers from Accenture to Verizon. (Full disclosure: Bob Sternfels, McKinsey’s global managing partner, serves as a co-chair of the Council.)
• Bottom Line, a nonprofit founded in Boston in 1997, eliminates barriers to retraining and higher education. So far, it has helped more than 7,000 college students, 90% of them first-generation college grads, from the application process through graduation. Participating students are 43% more likely to earn degrees than their peers.
• The Rework America Alliance, a partnership of civil rights organizations, nonprofits, private employers, labor unions, educators, and others, helps workers who lack degrees but have skills and experience — especially historically marginalized populations. So far, it has helped 550,000 low-wage workers get the training and coaching they need to find better jobs.
• The New South Wales Land and Housing Corp.’s “Future Directions” initiative brings public and private sector stakeholders together to expand the housing supply for vulnerable populations in Sydney and across the Australia state of New South Wales. The program aims to deliver up to 23,000 new and replacement subsidized homes and 40,000 new private dwellings in ten years.
• Global Detroit connects Michigan employers with international students and graduates from local universities. About 58% of students using Optional Practical Training visas through Global Detroit’s talent retention initiative are likely to work in Michigan after graduating. So far, more than 1,000 international students have benefitted from the program.

Efforts like these can inform New York’s efforts to make our region more attractive to talented, creative, ambitious people from across the country and around the world — and help them and our own residents access the opportunity and family sustaining jobs our economy creates.

There is no one clear recipe for success. We can’t look only to local and state governments, or even to a handful of companies, if we want to overcome the metropolitan area’s formidable challenges. Leaders in our communities, nonprofits, industries and academia must come together with our public sector, as they have so many times before, to make New York stronger, more resilient, and more equitable.

That’s who we are as New Yorkers — born-and-bred residents, daily commuters, and immigrants from across America and the globe. Let’s get to work. The world is waiting.

Taqqu is a senior partner and managing partner of McKinsey’s New York office, where Shorris is a partner.