More money is coming into New Yorkers' wallets since the beginning of the year, but much of that growth is being driven by government aid like unemployment checks and Medicare and Social Security benefits.
The recovery, too, has been uneven, especially for workers in typically lower-income fields that were devastated by the spread of COVID-19, including the leisure and hospitality sector, according to a report released Thursday by Comptroller Tom DiNapoli's office.
The report, reviewing federal economic data over the last several months, is another sign more money is beginning to circulate in the economy after spending was largely frozen a year ago as businesses and schools closed and public events were canceled. But the recovery will likely be uneven for millions of people who hold jobs that depend on face-to-face interactions.
The report found personal income in New York rose 12.8%, hitting $1.6 trillion in the first quarter of 2021, surpassing pre-pandemic levels and a more than 50% increase from the final quarter of 2020.
But a chunk of that growth was driven in large part by government benefits -- totaling some $430 billion, or 28%, of personal income in New York. Meanwhile, jobs in sectors like professional services, government work and financial activities accounted for more than half of the total earnings in the first quarter of this year.
The leisure and hospitality sector, meanwhile, had the steepest decline in income last year, and will likely be the slowest to recover from the crisis, the report found. Earnings for jobs in hospitality are nearly 32% below what they were at the end of 2019. Pay in public sector jobs has also declined by a more modest 5% during that time and other lagging sectors are down by about 1%.
But financial services, professional services, health care and social assistance, education and trade have all seen their first quarter earnings rising in 2021.
New York shed 2 million jobs during the shutdown induced by the pandemic, leading to skyrocketing jobless claims not seen since the Great Depression nearly a century ago. The state's unemployment rate in May stood at 8.2%, far above the pre-pandemic level.