See more of our coverage in your search results.
New York’s stagnant and aging population is killing business expansion — with residents age 65 and older now making up nearly 20% of the state, according to a sobering report from Gov. Kathy Hochul’s office.
The “Labor Markets” section of Hochul’s mid-year budget plan revealed that there are not enough younger residents to replace Baby Boomers leaving the workforce, thanks to “constraints in population growth.
“New York’s labor market faces many of the same constraints as the nation, where cautious business expansion and limited labor force growth restrain hiring,” the study found. “Individuals age 65 and older now make up 19.3 percent of the State’s population, up from 15.0 percent a decade ago.
“The growth of the State’s labor supply will be limited due to constraints in population growth and the aging workforce.
“These trends will likely restrict employment growth, but unemployment rates should remain stable,” the report said. “[The state Division of the Budget] projects New York’s unemployment rate to average 4.4 percent in each year from 2026 through 2028, slightly above the national average.”
The analysts cited several factors negatively impacting or preventing a more dynamic local job market: the falloff in foreign immigration that historically compensated for New Yorkers exiting the state, and the high cost of living, particularly the lack of an adequate supply of affordable housing in the New York City region.
“We can’t change the fact that New York is getting older, but we can change both whether a young family can afford to put down roots here and whether an employer chooses New York for its next hundred jobs,” said Steve Fulop, CEO of the Partnership for the City of New York, a group that represents the Big Apple’s largest employers.
“It is all connected, and elected officials don’t always recognize it, but affordability for families and competitiveness for companies to grow in New York clearly belong in the same conversation.”
The slowdown of foreign immigration coupled with the housing crunch is a double whammy, said Ken Girardin, a research fellow at the Manhattan Institute.
“Housing and immigration are two important things that lubricate the economy. Both of those things have been disrupted in recent years,” Girardin said.
“New York City is the first stop for new Americans. The dropoff in immigration has tightened the labor market. The tight labor market presents a challenge to New York’s economy,” the expert said.
The Trump administration imposed tighter restrictions on immigration, including ending temporary protected status for refugees such as thousands of Haitians and Venezuelans, a move that removed thousands from the workforce.
Girardin meanwhile claimed that New York’s higher housing costs are a self-inflicted problem created by state and city politicians.
Landlords have warehoused tens of thousands of housing units because they can’t afford repairs under stricter rent regulations approved in 2019, he said.
“The situation shows how fried the housing market is. New housing units are not coming on line fast enough and then you have the disruption in rent regulations,” he said.
More evidence that younger adults are not settling in New York City is the plummeting enrollment in the Big Apple’s public school system.
Kindergarten enrollment has shrunk by 23% in the past eight years in the Big Apple’s system.
Enrollment dropped a whopping 19% — or by nearly 187,000 students — since the 2013-14 school year, including 22,000 students in the last year alone, reported City Comptroller Mark Levine.
“Students are unlikely to enter the public school system after kindergarten,” noted Yiatin Chu, co-founder of Parent Leaders for Accelerated Curriculum and Education, in a tweet. ”In fact, the
@NYCComptrollerIn report shows another dip in the middle school grades.
“It’s no wonder that closing or merging schools with declining enrollment is a top priority for this administration—there’s no sign of a turnaround.”
Chu said education is the third leg of the stool important for attracting young families to move to or stay in New York. Supporting merit-based education programs is key to doing so, she said.
“The other strategic priority should be retaining families by offering the schools they want: real G&T [Gifted and Talented], K–8/6-12 schools, more screened programs, and preserving the SHSAT [the entrance exams to get into the city’s top public schools,” she said.
Hochul and New York City Mayor Zohran Mamdani have launched an expansion of publicly funded child care in a bid to attract and keep working parents in the city.
The Hochul budget report did note positive developments news as well.
Citing the strength of national and state economies and particularly strong financial market performance, the state’s estimated budget tax revenues are $8.1 billion higher than when the financial plan was approved in May.
But Girardin warned the tax revenues could dry up if the stock market goes deep into bear territory — as it did during the Great Recession of 2008 and during the COVID-19 outbreak in 2020.
New York’s budget is more reliant than ever on Wall Street revenues, with the state’s top 10.9% income tax rates on high earners, and capital gains taxes, he said.
