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by Steven Koczak, Ph.D., Program Research Specialist
What exactly do labor market analysts mean when they refer to a state’s “high-tech” sector? Is it the job that’s high tech or the industry? For example, would a software engineer at Goldman Sachs qualify as high tech? What about a lawyer at Microsoft? Whether you use industry, occupation, or some combination of the two, definitions can easily get muddled.
Recent studies of New York’s tech sector have used different approaches to determine what should be counted as “high tech.” Some have focused on industries with a high concentration of science, technology, engineering, and math (STEM) employees or scientific research and development (R&D) workers. Others have singled out industries producing high-tech products or that use high-tech production methods. For example, the Federal Reserve Bank of New York’s (FRB-NY) “Tech-Pulse Index” combines high-tech demand, supply, and employment into a single measure.
In this article, we consider three reports about the high-tech workforce published during the latter half of 2022. All three define the high-tech economy somewhat differently, but still agree on many points.
The High-Tech Workforce in New York
A July 2022 study from the Center for an Urban Future highlighted the size, nature, and importance of the tech sector in New York City (NYC). It mostly told a story of stable, long-term growth: total employment in the high-tech sector increased by 114,000, or 142.4%, to 194,000 between 2010 and December 2021. The tech sector’s share of NYC private employment grew from around 2.0% in 2006 to 5.2% in 2021. The study found that NYC accounted for 15.6% of U.S. employment in Internet-related tech companies, nearly double the 8.9% share reported in 2012. The study also concluded that NYC is now home to 3.1% of all jobs in the nation’s high-tech sector, further suggesting that growth was not only sustainable over the long term, but also gave NYC a competitive advantage.
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Inspired by the FRB-NY’s Tech-Pulse Index, the Center used a business-based count, which excluded high-tech workers in other industries. (For example, it would not count the hypothetical software engineer at Goldman Sachs mentioned above.) The Center pointed out that this approach “almost certainly” undercounted the city’s high-tech workforce, indicating that other studies, taking a broader view, put the city’s high-tech workforce at around 372,000.
One such report, authored by HR&A Advisors, Association for a Better New York, Tech: NYC, and Google, came out in November 2022. It found that, in 2021, jobs in New York City’s “tech ecosystem” numbered around 369,000. Of this job total:
- 1% were tech workers at tech businesses (e.g., software engineer at Google);
- 4% were non-tech workers at tech businesses (e.g., HR manager at Meta);
- 5% were tech workers at non-tech businesses (e.g., software engineer at JPMorgan).
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The report also found that jobs within the tech ecosystem accounted for a quarter of the city’s total job growth in 2012-21. The economic output of the ecosystem in 2021 was approximately $291 billion, or 28% of the city’s total economic output, and also had a sizeable impact on public revenues. The pay scale of jobs within the ecosystem, even those that don’t require a college education, was higher than other jobs requiring comparable education levels.
A separate report published in October 2022 by the Office of the State Comptroller (OSC) counted 321,280 high-tech jobs in New York State in 2021 — around 5.7% of the total such jobs in the U.S. This placed New York third in the nation, behind California and Texas. The OSC further found that 54% of our state’s tech jobs were in NYC. According to the report, NYC added 43,430 positions in tech from 2016 to 2021.
OSC developed its own definition of high-tech jobs, based on firms and workers involved in researching, designing, manufacturing, or maintaining computer systems, software, communication equipment, the Internet, and biotechnology.
CHIPS Act
The federal Creating Helpful Incentives to Produce Semiconductors (CHIPS) and Science Act, which was signed into law in August 2022, spurs federal investment in microchip manufacturing and innovation in the U.S. to decrease reliance on other countries like China. The new law “provides funds to support the domestic production of semiconductors and authorizes various programs and activities of the federal science agencies.” Semiconductors are physical components that play a critical role in managing the flow of electricity within high-tech devices.
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There is general agreement that the U.S. was once a leader in semiconductor manufacturing, but our status has fallen. For example, the Congressional Research Service (CRS) found that our nation’s share of worldwide semiconductor fabrication capacity fell from around 40% in 1990 to around 11% in 2019. That same year, China accounted for 12% of global fabrication, with Taiwan, South Korea, and Japan accounting for about two-thirds between them. The CRS report indicated the U.S. remains a leader in R&D, design, and “some aspects” of chip manufacturing.
Members of New York’s Congressional delegation are leading supporters of the CHIPS Act. One company that will benefit from the Act is Corning Incorporated, headquartered in Corning (Steuben County) in the Southern Tier. In particular, the company’s plant in Canton (St. Lawrence County) in the North Country is an ideal candidate for expanded production of specialized glass and microchips. As described by Corning, their role in the high-tech economy consists of supplying a combination of various raw materials, fully assembled systems, and components.
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Conclusion
Despite the varying definitions and measures of New York’s high-tech workforce and economy, clearly technology plays a vital role in everyday life. As the reports highlighted in this article show, high-tech employment is specifically important to New York in a way that people may not think of immediately. Hardly anyone says “Boomtown, New York” or “Silicon Alley, New York City” in the same breath as “Silicon Valley, California.”
But maybe they should. Recent layoffs in the high-tech sector are more likely part of short-term business cycle fluctuations than a long-term trend. The importance of the high-tech economy and workforce to New York is unlikely to diminish any time soon.
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by Kevin Alexander, Labor Market Analyst, Capital Region
"As of 2022, manufacturing had recovered all of the jobs lost during the pandemic and its employment count grew to its highest level since 2001."
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The entire country suffered sharp job losses as a result of the COVID-19 pandemic, with all industry sectors being adversely affected. Since April 2020, however, the labor market has been in recovery mode. In 2022, the Capital Region continued to recover jobs lost in the pandemic, but employment remained below pre-pandemic levels. As of the third quarter (Q3) of 2022, the region’s private sector job count was 13,060, or 3.1%, below 2019 Q3’s level, according to Quarterly Census of Employment and Wages (QCEW) data.
Here, we examine the pace and level of the Capital Region’s labor market recovery relative to pre-pandemic employment levels set in the third quarter of 2019.
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Recovery Continues
The pace of local job recovery has varied widely by industry sector. Factors such as whether a business was considered essential or non-essential, its location, and even building size all played a role in determining how it and its industry sector fared during the pandemic. With the lifting of most pandemic-era restrictions, the region’s labor market has mostly adapted to the new normal.
In total, QCEW data show that as of 2022 Q3, private sector employment was below pre-pandemic levels in 13 out of 19 industry sectors. The disparate rates of recovery between industry sectors can help us understand the effects COVID-19 had on the local labor market.
Between 2019 Q3 and 2022 Q3, the transportation and warehousing sector expanded the most, with employment increasing by 3,230, or 25.1%. In contrast, the employment count in the healthcare and social assistance sector was 6,550 below its pre-pandemic level.
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Other local industry sectors with employment growth between 2019 Q3 and 2022 Q3 include: administrative and waste services (+1,050); manufacturing (+710); mining (+220); professional and technical services (+170); and agriculture, forestry, fishing and hunting (+70). For the remainder of the article, we’ll focus on the recovery in the manufacturing sector given its importance to the regional economy.
Manufacturing’s Resurgence
As of 2022 Q3, manufacturing had recovered all of the jobs lost during the pandemic and its employment count grew to its highest level since 2001 Q3. Fourteen out of 20 local manufacturing industries employed at least 1,000 workers in 2022 Q3, with the largest being chemical manufacturing, which employed 7,030. Employment in the industry has grown substantially since the pandemic, increasing by 17.4%, or 1,040, in 2019 Q3-2022 Q3. Much of this growth is due to the expansion of Regeneron Pharmaceuticals in Rensselaer County.
The electrical equipment and appliances industry added 1,010 jobs since 2019 Q3, growing at an astounding rate of 147.9%. Industries in this subsector manufacture a variety of products with a wide range of applications. One company contributing to industry job growth is hydrogen fuel cell maker Plug Power, which has been expanding in the region over the past few years. In 2022, the company built a large facility at the Vista Technology Campus in Slingerlands (Albany County). Furthermore, they have committed to creating 1,600 green energy jobs by 2026.
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Looking Ahead
Manufacturing is a significant contributor to the Capital Region’s economy. Only three sectors— healthcare and social assistance, retail trade, and accommodation and food services—employ more private sector workers. For the four-quarter period ending 2022 Q3, the sector’s annual average wage was $100,200, one of the highest in the region. Over this period, local manufacturers paid out just under $3.5 billion in wages, accounting for 13.3% of the region’s total private sector wages, per QCEW data.
Employment growth in manufacturing has important ripple effects in the Capital Region’s economy. Data from Lightcast, a data analytics firm, indicate that manufacturing has an employment multiplier of 2.28 in the Capital Region. This means that for every 100 jobs added in the region’s manufacturing sector, an additional 128 spin-off jobs are created in other industries across the region.
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Because of outsourcing, automation, and business cycles, the local manufacturing workforce declined by 19,600, or over 40%, between 1990 and 2010, according to annual data from the Current Employment Statistics (CES) program. However, since 2010 the region has strategically aligned itself in growing industries such as semiconductors, biotech and green energy. As of February 2023, the local manufacturing workforce has grown 24.3% compared to February 2010 levels, according to preliminary CES data. While it’s unlikely the manufacturing sector will return to its previous heights in terms of overall employment levels, it may now be better positioned to withstand the effects of future competitive pressures.
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In February 2023, New York State’s seasonally adjusted private sector job count increased over the month by 21,200, or 0.3%, to 8,233,700. In addition, the state’s seasonally adjusted unemployment rate held steady at 4.2% in February, while New York’s seasonally adjusted labor force participation rate rose from 60.5% to 60.6%.
Capital
Over the past year, the private sector job count in the Capital Region rose by 14,600, or 3.5%, to 432,200 in February 2023. Gains were largest in leisure and hospitality (+5,800), professional and business services (+2,400), natural resources, mining and construction (+2,300), education and health services (+1,300), trade, transportation and utilities (+1,000), financial activities (+800) and manufacturing (+500).
Central NY
The number of private sector jobs in the Syracuse metro area increased over the past year by 6,100, or 2.5%, to 253,400 in February 2023. Employment gains were greatest in trade, transportation and utilities (+2,700), professional and business services (+1,500), leisure and hospitality (+1,200), natural resources, mining and construction (+700), financial activities (+400) and other services (+400). Losses were greatest in education and health services (-500).
Finger Lakes
From February 2022 to February 2023, the private sector job count in the Rochester metro area rose by 4,300, or 1.0%, to 442,800. The largest gains were in education and health services (+2,800), leisure and hospitality (+1,100), manufacturing (+600), financial activities (+300) and other services (+300). Losses were greatest in information (-300), professional and business services (-300) and trade, transportation and utilities (-300).
Hudson Valley
Over the past year, the number of private sector jobs in the Hudson Valley grew by 10,400, or 1.3%, to 781,600 in February 2023. The largest gains were in education and health services (+3,400), leisure and hospitality (+3,100), natural resources, mining and construction (+3,100), other services (+800), financial activities (+300) and professional and business services (+300). Over-the-year losses were focused in information (-1,000).
Long Island
For the year ending February 2023, private sector jobs on Long Island increased by 24,500, or 2.2%, to 1,115,600. Gains were largest in professional and business services (+9,900), leisure and hospitality (+7,500), education and health services (+4,400), natural resources, mining and construction (+3,600), other services (+800) and manufacturing (+700). Job losses occurred in trade, transportation and utilities (-2,800).
Mohawk Valley
For the 12-month period ending February 2023, the number of private sector jobs in the Mohawk Valley region rose by 2,000, or 1.5%, to 138,400. Over-the-year employment gains were greatest in leisure and hospitality (+600), education and health services (+500), trade, transportation and utilities (+500) and natural resources, mining and construction (+200).
New York City
The private sector job count in New York City rose over the past year by 182,000, or 4.7%, to 4,048,400 in February 2023. Job gains were greatest in education and health services (+66,900), leisure and hospitality (+56,000), professional and business services (+27,000), financial activities (+18,000) and other services (+9,800). Losses occurred in information (-1,200) and trade, transportation and utilities (-1,100).
North Country
For the 12-month period ending February 2023, the private sector job count in the North Country region rose by 1,200, or 1.2%, to 104,600. Employment gains were largest in education and health services (+600), trade, transportation and utilities (+300), leisure and hospitality (+200), natural resources, mining and construction (+200) and professional and business services (+200). Job losses were greatest in manufacturing (-300).
Southern Tier
For the 12-month period ending February 2023, the number of private sector jobs in the Southern Tier increased by 2,300, or 1.1%, to 214,200. Employment gains were greatest in leisure and hospitality (+1,600), manufacturing (+500) and natural resources, mining and construction (+500). Losses occurred in education and health services (-300) and trade, transportation and utilities (-300).
Western NY
Over the past 12 months, the private sector job count in the Buffalo-Niagara Falls metro area rose by 8,700, or 1.9%, to 455,600 in February 2023. Gains were greatest in professional and business services (+3,400), leisure and hospitality (+2,200), manufacturing (+2,000), natural resources, mining and construction (+1,800) and other services (+800). Losses were largest in trade, transportation and utilities (-700) and financial activities (-500).
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