How Slow Job Growth and Trump Policies Portend Deeper Inequality in New York
Key Findings:
Relatively steady rates of unemployment, labor force participation, and employment in New York City mask race and gender disparities that are expected to worsen under federal policies targeting immigrant workers and social safety nets.
From January to June 2025, men of color continued to drop out of the local labor market, while most women – with the exception of Black women – continued to increase their labor force participation and employment rates.
The most dramatic labor force participation shifts have been among Hispanic workers, who have been the target of the Trump administration’s unjust deportation efforts, with men’s participation dropping and women’s participation increasing.
The city has added less than 1,000 private sector jobs over the first half of 2025. Growth in health care and social assistance, government, and information jobs offset losses in all other industries. This helps to explain some of the labor market disparities by race and gender today. Meanwhile, Congress’s passage of the so-called One Big Beautiful Bill Act (OBBBA) earlier this month poses significant threats to health care jobs and economic growth in the city overall.
New York City’s seasonally adjusted unemployment rate was 4.7 percent in June 2025, a 0.1 percentage point decline from the previous month and a 0.6 percentage point decline from the city’s average unemployment rate of 5.3 percent in 2024. Labor force participation and employment rates also remained steady in the first half of 2025.
However, these indicators mask troubling labor market disparities by race and gender that CNYCA sounded alarms about in January 2025. CNYCA’s analysis of the latest Current Population Survey data shows that in the first half of 2025, men of color dropped out of the labor market, while most women – with the exception of Black women – continued to increase their labor force participation and employment rates. Given that being a woman has a negative impact on earnings, these trends could further deepen racial income disparities in the city.
Hispanic men have experienced the most significant declines. Their labor force participation rate has decreased by 3.6 percentage points since the third quarter of 2024, and their employment rate has declined by 3.1 percentage points (see Figure 1). Black, Asian, and “other” non-white men have also experienced labor force participation rate declines of 1.9 and 1.7 percentage points, respectively, with similar declines in their employment rates during the same period. While there’s been little change in these group’s unemployment rates, that’s because obstacles in the labor market – from not being able to find a job to discrimination or layoffs – cause them to give up looking for work altogether. This is distinctly different from the experience of white men in New York City, who have seen increased employment rates since the third quarter of 2024.
Figure 1
Meanwhile, women are also experiencing labor market racial and ethnic disparities, distinctly different from those experienced by men of color (see Figure 2).
Hispanic women’s labor force participation rate has jumped 4.8 percentage points since the third quarter of 2024; their employment rate has increased at a similar rate and their unemployment rate has declined 0.8 percentage points. Asian and other women of color have experienced similar if somewhat less dramatic dynamics; since October 2024, they’ve increased their labor force participation rate by 1.0 percentage point and experienced a 0.6 percentage point decrease in their unemployment rate.
Black women, on the other hand, have started dropping out of the labor force and seen a 1.4 percentage point drop in their employment rate since the third quarter of 2024. The rate of change in Black women’s labor market outcomes is similar to Black men’s during this time, though their employment rates are still better than before the pandemic, which is not true for Black men. Meanwhile, white women continue to have the most favorable labor market outcomes in the city, with continued growth in labor force participation and employment rates over the first half of 2025, which are well above their pre-pandemic rates.
Figure 2
Two factors help explain these growing labor market inequalities.
First, the dramatic changes in Hispanic labor market participation by gender reflect effects of the Trump administration’s unjust and aggressive deportation efforts. Immigration and Customs Enforcement agents have been deliberately cruel – targeting Hispanic men seeking day labor at Home Depot parking lots, and at construction sites and restaurants. (Simultaneously, the construction industry in New York City lost 5,000 jobs in the first half of 2025, adding to an 18 percent job loss since the pandemic.)
With men so vulnerable in this environment, Hispanic women seemingly are responding by seeking jobs in sectors likely to employ them – like health care and social assistance, which have experienced the strongest job growth in the first half of 2025, adding 29,000 jobs (see Figure 3).
Figure 3
Second, a stagnant and uncertain local economy is exacerbating ongoing racial and ethnic labor market disparities. The first six months of 2025 saw job declines in most industries. Growth in health care and social assistance, government, and information jobs offset these losses to produce a net gain of 5,700 non-farm payroll jobs. But less than 1,000 of those were in the private sector, where jobs grew a mere 0.02 percentage points. Nationally, private sector jobs grew by 0.5 percentage points during that time. While in 2024 New York City job growth was stronger than in the nation as a whole, halfway through 2025 the city’s job growth looks much weaker.
This stagnant growth, along with shifts in the industrial composition of jobs, continues to produce race and gender labor market disparities in the city. Growing industries – like health care and social assistance where women and Black men are disproportionately employed – may be drawing new people into the labor market, where demand for workers is facilitating a less competitive and discriminatory job market. Second, job decline in certain industries – like professional, scientific and technical, and finance and insurance industries where white and Asian people of all genders are disproportionately employed – may be leading to more competition and bias, with educational attainment, years on the job, or networks helping some workers and hurting others.
Slow or stagnant economic growth has significant racial job market effects. Extensive research has shown that in recessions and periods of slow growth, employment rates for Black workers fall more than for white workers, while in periods of sustained high growth, employment rates for Black people rise faster than they do for white people. This is a cause for concern, as estimates of GDP growth released yesterday show the U.S. economy slowed in the first half of 2025, highlighting that President Trump’s policies create conditions that will likely be inconducive to job growth in the near future.
New York City faces particular challenges in this macroeconomic environment. Economic uncertainty is impacting high-paying jobs in the important finance sector, which – rightly or wrongly – the city relies on to support consumer spending and, therefore, job growth in areas like retail, accommodation and food services, and arts, entertainment and recreation, which account for 15 percent of all payroll jobs in the city.
The Trump administration’s deportation efforts are also anticipated to have a strong chilling effect on the local economy. Recent analysis from the Economic Policy Institute highlights how deportation efforts can directly reduce the number of jobs in the economy for both immigrant and U.S.-born workers. New York City’s lackluster job growth over the past six months reflects this. The future impact will likely be even more severe with this month’s enactment of the federal One Big Beautiful Bill Act (OBBBA), which provides funds to ramp up deportations threefold. There will be wrenching human costs of such dramatically stepped-up enforcement. It will also mean fewer jobs in the economy. Combined with an affordability crisis impacting low- and middle-income households, that will translate to less disposable income that can stimulate job growth.
As of June 2025, health care and social assistance accounted for 22 percent of all payroll jobs in the city. Demand for these jobs is contingent on residents having health insurance. OBBBA cuts are expected to result in 860,000 New York City residents losing Medicaid, some 22 percent of total Medicaid enrollment in the city today. Implementation of OBBBA will have a huge, years-long impact on demand for and viability of health care services in the city. It will undermine the fiscal stability of the State and the ability to maintain critical services. Not only will this disproportionately impact low-income households, but it may also threaten jobs that have resulted in employment rate growth for women of color in particular. This could have especially dire consequences for Hispanic immigrant households where such jobs for women seem to be offsetting increased job insecurity for men. Furthermore, the city may no longer be able to rely on the health care and social assistance sectors as drivers of job growth in the city.
What can local policymakers do to mitigate these trends?
Without public and private sector intervention, continued labor market inequality will contribute to racial income and wealth inequality, unequal experiences of economic insecurity and precarity, and inhibit social and economic well-being and mobility. Given the challenges posed by the federal government, New York City and State will need to work strategically and creatively to address these problems.
Most urgent and least costly to local government will be measures to protect immigrants. The city must also improve worker protections against wage theft and workplace discrimination including in gender pay inequities, and can draw on proposals outlined by City Comptroller Brad Lander in his recent mayoral campaign.
Investment in housing development and climate resiliency – two things the city desperately needs – can stimulate job growth in fields that have a track record of hiring men of color. Stabilizing public benefits to mitigate federal cuts will also provide a safety net for people out of work and low-wage workers can help maintain demand for health care services and consumer spending, both critical for economic growth in the city.