Cost of Living in NYC Too High for Mid-Skill Workers

September 13, 2016 Updated: September 15, 2016

NEW YORK—A shortage of talent for mid-skill jobs in New York City is linked to low wages and an inadequate education system, experts say.

A mid-skill job is one that requires a high school diploma and a post-school certificate, but not necessarily a four-year degree—for example, many technology, health care, and trades jobs.

“Tech in particular, while growing, is not at levels of mid-tier cities like Seattle and Austin due to higher cost of living,” said Jessica Walker, president of the Manhattan Chamber of Commerce, in an email. “So figuring out how people in tech, health care, and business and finance can live with families in NYC and the state is important.”

Wage Polarization

The shortage of talent prompted job search website to dig into its vast database for answers.

A big problem in New York City is labor market polarization, or “a hollowing out of middle wage jobs,” said Daniel Culbertson, an economist at

The company separated its job database into 800 different categories, then ran the data through two filters: The first was whether a wage had kept pace with inflation, and the second was whether a wage was higher than the unadjusted median amount for that job in the year 2000.

Only 35 percent of New York City jobs made it through the filters.

New York City sits at 10th out of 100 cities ranked for highest income inequality, according to a Brookings Institute analysis of 2014 American Community Survey data. The top three are Boston, New Orleans, and Atlanta.

Over the past two years, tech job postings have increased 20 percent in New York City, said Culbertson—which is five times higher than the U.S. average.

“Technology is creeping into every part of the job labor market,” he said, and technology roles at finance companies are among those with the most job postings on hosts 16 million jobs in more than 60 countries and has collected 65 million resumes.

Education Gap

The origin of talent shortage lies in the education system, said Allison Armour-Garb, senior fellow at Public Policy Institute of New York State.

In New York City, only 35 percent of high school graduates are college-ready, she said, and at least 50 percent of students have to take at least one remedial class when entering college.

The city spends more than $70 million on remediation classes at CUNY alone, Armour-Garb said. “[We’re] paying millions for material they should have already mastered in high school.”

The P-TECH model of high school is working for big company employers, said Merrill Pond, senior vice president at Partnership for New York City, which represents the city’s business leadership and its largest private sector employers.

P-TECH connects high school, college, and industry with direct partnerships. The schools have a grade 9–14 system, which allows students to leave with an associate degree over six years. The first school opened in Brooklyn in 2011 and the idea spread quickly—nearly 60 schools in six states will be open by this fall, according to IBM, a major partner of the program.

“These are the types of models we need to look for,” Pond said.

However, Pond said, this model doesn’t always work for small businesses, which are the largest employers. Small businesses need employees who can hit the ground running, she said, which is different than big companies, which often prefer someone they can train themselves.

“There needs to be a shift;, we need to make sure we’re talking to small businesses also,” Pond said.


Board of Regents Revisions

The New York State Education Department’s supervisory body, the Board of Regents, is revising its educational standards to add more skills that employers are looking for, said Armour-Garb. For example:

  • Reasoning skills
  • Problem- solving skills
  • Working with data, probability
  • Hypothesizing and verifying data
  • Teamwork
  • Time management
  • Ability to conduct research projects


Top 10 Fastest-Growing Industries

The industries that are projected to grow the fastest nationwide from 2014 to 2024.

  1. Specialty hospitals (except psychiatric and drug abuse); local
  2. Home health care services
  3. Offices of all other health practitioners
  4. Power and communication line and related structures construction
  5. Offices of physical, occupational, and speech therapists, and audiologists
  6. Community care facilities for the elderly
  7. Electronic shopping and mail-order houses
  8. Ambulance services
  9. Residential mental health and substance abuse facilities
  10. Other financial investment activities

Source: Bureau of Labor Statistics, Office of Occupational Statistics and Employment Projections


Top 10 Industries With the Largest Employment

The industries with the largest employment nationwide in 2014 

  1. Elementary and secondary schools; local       7,218,600 employed
  2. Full-service restaurants                                      5,058,000
  3. General medical and surgical hospitals; private 4,447,100
  4. Employment services                                          3,421,000
  5. Grocery stores                                                       2,620,900
  6. Offices of physicians                                            2,470,200
  7. Management of companies and enterprises   2,169,400
  8. Colleges, unis, professional schools; state      2,055,200
  9. Computer systems design, related services    1,777,700
  10. Other general merchandise stores                    1,764,100

Source: Bureau of Labor Statistics, Office of Occupational Statistics and Employment Projections

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