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New York City Comptroller
John C. Liu
|Contact : Sharon Lee , (212) 669-3747||April 23, 2010|
COMPTROLLER LIU’S ECONOMIC NOTES INDICATE RENEWED ECONOMIC GROWTH
NEW YORK, NY – New York City Comptroller John C. Liu today released “Economic Notes,” a periodic report from the Comptroller’s Office that provides an independent analysis of the City’s economy.
“Economic Notes” highlights: the City’s first quarter of economic growth after nearly two years of decline, decreases in the City’s unemployment rate, persistent gender pay disparities, the earnings potential of immigrants, the estimated monetary value of an education, and the deterioration of earnings for middle-aged workers.
“After nose-diving for seven consecutive quarters, the end of 2009 provided a much needed, albeit small, boost to our City’s anemic economy,” Comptroller Liu said. “As we start to move out of this recession, my office’s analysis has underscored the importance of an education, and the need to address the gender pay gap in ways to strengthen the earnings potential of New Yorkers in the future.”
Comptroller Liu credited Deputy Comptroller Simcha Felder and his team in the Bureau of Fiscal and Budget Studies for presenting the findings. The full report is available at http://comptroller.nyc.gov/bureaus/bud/econnotes-pdf/EconNotes04-10.pdf
Chief among the findings:
SIGNS OF RECOVERY IN THE CITY’S ECONOMY
- New York’s Gross City Product (GCP) grew by an estimated 0.9 percent during the fourth quarter of 2009 after two years of decline. New York, however, continues to be outpaced by the nation, as US GDP grew by 5.6 percent in 4Q09. Estimated at $602 billion, New York’s GCP represented 4.2 percent of the nation’s total economic output in 2009.
- NYC’s unemployment rate fell to 10.2 percent in 1Q10 from 10.5 percent in 4Q09. The city’s unemployment rate has fallen steadily, to 10.0 percent in March 2010 from 10.5 percent in December 2009. The number of unemployed city residents, which soared from 179,400 in February 2008 to 418,100 in December 2009, declined to 397,200 in March 2010.
- General sales tax collections rose in 4Q09 after four quarters of consecutive decline. On a year-over-year basis, sales tax collections rose 12.1 percent in 4Q09. Sales tax revenues were up 11.4 percent in January-February compared to the same period of 2009. It appears that consumers, constrained by job and income losses, are still spending cautiously.
2009 PIT LAGGED 2008
- NYC personal income tax withheld from paychecks fell 6.4 percent, to just over $1.3 billion in 4Q09, from $1.4 billion in 4Q08. Personal income taxes withheld fell 10.5 percent for all of 2009, on a year-over-year basis, reflecting higher unemployment and smaller Wall Street bonuses after substantial industry losses in 2008. Personal income taxes withheld during the first quarter of 2010 were up only 7.1 percent over the same period of 2009, indicating that financial firms were restrained in awarding cash bonuses despite the strong recovery in industry profits. Estimated tax payments, which are based on taxpayers’ estimates of interest earned, rental income, and capital gains, rose 49 percent in 4Q09, reflecting the rebound of the stock market.
GENDER EARNINGS GAP STILL PERSISTS
- Estimated lifetime earnings of a woman in the New York Metropolitan area with a four-year college degree are about 68 percent of that of a comparably-educated man. Earnings for women typically plateau at age 33, while for men, earnings typically plateau at age 37.
PUTTING A REAL VALUE ON AN EDUCATION
- The present value of a 4-year college degree for New York Metropolitan area men is estimated at $650,000 and the additional value of a graduate or professional degree is $550,000 (meaning average lifetime earnings of a male with a graduate degree is $1.2 million more than a male with a high school education). The present value of a 4-year college degree for females is $400,000 and of a graduate or professional degree $260,000.
IMMIGRANTS EARN LESS
- Men born in the United States and working in the NYC area earn about 44% more than immigrant men over the course of their lifetimes. Some of this is due to differences in educational attainment, but not all. In fact, among men with 4-year college degrees, the difference in lifetime earnings is 46%. The difference among US-born and immigrant women is smaller, but still a substantial 38%.
CAUSE FOR CONCERN AS MIDDLE-AGED NEW YORKERS EARN LESS THAN COUNTERPARTS
- Lifetime earnings of New Yorkers are much higher than residents elsewhere and higher than incomes in the US as a whole. However, New Yorkers’ earnings appear to peak earlier than in competing cities and decline faster in the later stages of careers, causing concern in the wake of the recession and as more baby boomers enter this phase of their professional lives.
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