Business Services and the Economic Performance of the New York Metropolitan Region

As correctly noted by Matthew Drennan in his paper forthis conference, the nature of the transformation that hasoccurred in the New York metropolitan region since 1989is rather mixed. Although the region has regained onlyhalf of the 625,000 jobs it lost during the 1989-92 period,aggregate earnings for the region, in real terms, are highertoday than they were in 1989. This discrepancy does indicatesteady gains in overall productivity for the metropolitanregion as a result of both a continuing change inindustry mix (from lower-productivity to higher-productivityindustries) and productivity gains within individualindustries (resulting from a relative shift from lowerskilled to higher skilled work). In addition, data on personalincome per capita show a steady long-term gain forthe region. This finding reflects the fact that, in addition toachieving steadily growing earnings, the metropolitan areahas done rather well in capturing its share of all transferpayments, dividends, interest, and rents that together representnearly 40 percent of all U.S. income.1 In short,although the job count may be down, the metropolitanregion has certainly not gotten any poorer as a result.[...]