Who Works in Manhattan’s Office Buildings?
At one time or another most New Yorkers have probably gazed at the downtown or midtown skylines and wondered: Who works in all those office buildings? Where do they live and what do they do? What are their backgrounds and qualifications?
Such questions may reflect our casual curiosity about our neighbors, but underlying them are also important questions about the City’s economy and how it is changing. This report finds that to the extent that office workers in Manhattan earn, on average, more
than double what workers who don’t work in office buildings earn, employment in the office economy represents enhanced access to a middle-class standard of living. In addition, the economic literature on internal labor markets1 suggests that early entry into an office environment may provide a lifetime of career opportunities that will often become closed to those who begin their work lives in other employment settings.
Moreover, investigating trends in the office sector as a whole can reveal shifts in occupational categories and skill requirements that may be obscured when the labor market as a whole is considered. Likewise, analyzing trends in office employment avoids many of the pitfalls of industry-level analysis, such as the frequently arbitrary distinction between legal services and finance, or between the “tech” industry and more traditional but technology-infused industries such as advertising.
This brief looks at trends in Manhattan’s office workforce between 1990 and 2012. Since Manhattan 1 Peter B. Doeringer and Michael J. Piore (1985); Internal Labor Markets and Manpower Analysis. M.E. Sharpe. contains about 85 percent of the City’s office space, it can be surmised that the trends discussed here are broadly representative of those in the City as a whole.
A Note on Methodology
For this brief we utilized microdata from the 1990 Census and the 2012 American Community Survey. Although neither source provides data specifically on office employment, they both provide data, for a very large sample of individuals, on geographic place of work, on industry of employment, and on occupation, as well as on a host of other characteristics of each respondent. By cross-referencing county of employment, industry, and occupation, we were able to estimate Manhattan’s office worker population and the characteristics of that population for the two points in time.
Workers in industries which typically operate in office buildings were initially categorized as office workers, while workers in industries typically operating in other types of structures were not. Then, further exclusions were made based on the worker’s occupation. For example, workers in finance were classified as office workers while workers in retail trade were not. However, even within the finance industry, some workers, such as bank tellers, are exclusively engaged in retail activities and typically work in retail spaces. Consequently, bank tellers were excluded from the count.
The cross-referencing process was particularly important for counting educational and health care workers. Education and health care are industries with an extensive presence in both commercial office buildings and in dedicated institutional structures. In the case of education, we excluded all workers who are involved in elementary and secondary education, as most of that activity occurs in dedicated school buildings. However, we included workers engaged in other educational activities, such as higher education, because both public and private universities in Manhattan utilize significant amounts of commercial office space as well as occupying their own officetype buildings on campus and off. Similarly, we excluded health care workers who work in hospitals and other institutions that typically operate out of dedicated residential facilities, but included health care workers who are employed in physician offices and similar establishments.
Building maintenance workers, who are typically employees of buildings maintenance contractors or real estate management firms, were also excluded.
Our process yielded a total estimate of 1,203,000 Manhattan office workers in 2012. Given a Manhattan office building inventory of 402 million gross square feet in 2012, and a total vacancy rate of 9.3 percent,3 our count implies a reasonable 303 gross occupied
square feet per worker in that year.
Characteristics of the Office Workforce
New York City’s office workforce grew very slowly during the 1990 to 2012 period. We estimate that the 1990 office workforce, numbering 1.176 million in 1990, increased to only 1.203 million by 2012, representing an average annual growth rate of only 0.1 percent. Nevertheless, we found dramatic changes in the composition of the workforce over that period of time.
Contrary to the widespread impression that there has been a massive “return to the city” of professionals, the number of Manhattan office workers who actually live in New York City fell slightly between 1990 and 2012. In 2012, about 70 percent of Manhattan office workers lived in the city, compared to 71 percent in 1990.
The portion of Manhattan office workers who live on Long Island and in the Northern suburbs both fell. The fastest-growing place of residence of Manhattan office workers was New Jersey (and adjacent parts of Pennsylvania), where about one-sixth of Manhattan office workers now reside. With the growth of New Jersey as a domicile of Manhattan’s office workforce, and most of Manhattan’s new office space planned for the World Trade Center site and the Hudson Yards, transit access between New Jersey and Manhattan may become more of a constraint on the region’s economic development.4 Manhattan office workers who live in New Jersey spent, on average, 67 minutes commuting to work each way in 2012, up from an average of 56 minutes in 1990.
Over the 22-year period, the office workforce became more diverse5, but in important ways the progress towards equal opportunity was disappointing. While the proportion of Manhattan’s office workforce that was white non-Hispanic fell from about twothirds to less than 60 percent, the proportion that was black non-Hispanic also fell. Moreover, the fall in black office representation did not simply reflect a declining representation of non-Hispanic blacks in the City’s overall population. In 1990, 15.6 percent of the City’s young black residents (ages 25 to 40) were employed in Manhattan’s office buildings; by 2012 only 11.1 percent were. Furthermore, by 2012, only 8.3 percent of resident black males ages 25 to 40 were employed in Manhattan offices, compared
to 34 percent of white males of similar age.6 The proportion of young Hispanic males working in offices was even lower, at 7.7 percent.
The declining representation of African-Americans in Manhattan’s office workplaces is, in part, a result of the dramatic increase in the educational requirements for office employment. The percentage of Manhattan office workers with a least a BA degree increased from 54 percent in 1990 to 77 percent in 2012, as a result of a changing occupational mix within offices, a greater use of office technology, and a competitive inflation of educational requirements. By 2012, nearly one-third of all Manhattan office workers possessed graduate degrees.
With a college degree rapidly becoming the minimum qualification for office employment, educational disparities assume a new importance in perpetuating economic inequality. In 2012, 69 percent of all non- Hispanic whites in the City between the ages of 25 and 40 had at least a four-year college degree. Only 27 percent of resident non-Hispanic blacks in that age group had a BA or more, and only 20 percent of Hispanics. Hispanics increased their representation in Manhattan’s offices because they grew in number relative to the City’s overall population; the percentage of the City’s working-age Hispanics who work in Manhattan office buildings declined between 1990 and 2012.