New York City may lose a half-million jobs and run about $10 billion short on tax revenue through mid-2021 because of the coronavirus outbreak, the city’s Independent Budget Office estimated, Bloomberg writes.
Retail employment will take the biggest hit, the IBO said. The sector is expected to shed 100,000 jobs in all, starting with 60,000 from April through June.
Another 86,000 jobs in hotels and restaurants, and 26,000 in the arts, entertainment and recreation industries will be lost, according to the report released Wednesday by the nonpartisan fiscal monitor.
Although finance and professional services will also experience declines, the most severe losses will be concentrated in sectors with low-and moderate-paying jobs. Losses will be spread across nearly all of the city’s industries, and the only economic sector likely to avoid losses will be health care, the IBO said.
The projected drop of 475,000 jobs would represent almost half the 996,500 jobs the city has gained since November 2009, when it hit its low point just after the Great Recession, according to state Labor Department statistics. The city held a record 4.7 million jobs in February, according to the Labor Department’s most recent report.
“Given the staggering job losses, IBO assumes that the U.S. economy has entered a recession, even if not yet captured in the official statistics,” the IBO report said. “As the economy contracts, tax revenues will follow suit.”
The IBO reported that a combined tax-revenue shortfall of $9.7 billion will result from declines in the city’s major tax sources, Bloomberg adds.
About $2.9 billion of that shortfall will come in fiscal 2020 and another $6.7 billion in fiscal 2021, the office said. The city’s fiscal year runs from July 1 to June 30.
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