Report: Artificial intelligence transforming New York City job market

New York City is being transformed by the artificial intelligence revolution, with the prospect to change millions of jobs over the next decade  — some “displaced” while others “productivity-enhanced,” according to a report Tuesday by the city’s economic-development arm.

For every one job displaced by AI, between 4 and 10 might be “augmented,” or made more efficient, says the report, which nevertheless cites data projecting a net growth in jobs from the adoption of AI.

About a fifth of all workers have what the Pew Research Center has called "high-exposure jobs," which tend to be in fields that pay relatively higher wages, such as those where job-holders tend to have college educations and occupations involving analytical skills: budget analysts, tax prepares, technical writers and web developers. Jobs with "low exposure": barbers, child care workers, firefighters, dishwashers and pipelayers.

According to the city report, there are already more than 2,000 AI-related startups in the city, with 40,000 workers in the field and those connected to it in the metropolitan area.

“I think there could be positive and negative impacts,” said Paul Trapani, cofounder of software consultancy PassTech Development LLC, and president of Plainview-based technology trade group LISTNet.

“Without question it’s going to have a big impact on Long Island’s economy as it I think it will on the U.S. economy overall,” Trapani said. His own firm, which has three employees, has been using ChatGPT’s paid premium tools to help with rapid prototyping of software and speeding up development processes.

“Unquestionably it’s a productivity gain,” he said. “We use it to assist with development. Rather than having to go and look things up like how to do something in a program language, we can get that instantly.”

Trapani acknowledged that with increased productivity comes the risk of job loss, particularly for those who perform repetitive tasks like data entry. Entry-level jobs in tech could also be harder for new grads to land.

“It’s a little bit unfair to younger people because businesses may not need to make as many hires,” he said. “It could be a little tougher for someone to break in. Companies don’t want to hire unless they have to.”

While the report warns that artificial intelligence possibly could displace workers, retail jobs that were lost during the pandemic “are likely permanently displaced, caused by advances in automation and shifts to e-commerce.” At each retail establishment, there was an average of one fewer worker (10.6 in 2019 compared to 9.6 in 2023), according to the report.

That trend is a continuation of a decline that predates the pandemic and began during the middle of the 2010s, but it’s worse in New York City than nationally, says the report, “State of the New York City Economy 2024,” issued by the Economic Development Corporation, an arm of the city.

The likely permanence of remote and hybrid work, turbocharged during the pandemic, continues 

The effect is especially pronounced in parts of Manhattan frequented by office workers, and “we have seen a significant increase in vacant storefronts.”

Citywide, there were about 16,200 vacant storefronts, or 11.3%, through 2024’s second quarter, compared with 15,300 (10.5%) during 2020’s first quarter.

All of this, the report summarizes as “A New Normal.”

“Storefront vacancy spiked but is trending downward as growth in restaurants and bars continues to shift the character of New York City streets,” the report says. “As the city moves forward, these trends are unlikely to change. The same technology that allows us to work from home and shop online will continue to challenge commercial corridors in traditional business districts as well as traditional retailers while creating opportunities for business growth in boroughs outside Manhattan.”

The report calls the scarcity of housing “the defining challenge” — the record-low 1.4% rental vacancy rate, which drives up housing costs in a city where two-thirds of households rent.

Even as the city added 895,000 jobs between 2011 and 2023, only 353,000 housing units were added to the stock.

Long Island is doing even worse on building housing to meet demand — and housing shortages region-wide drive up costs everywhere in the region.

Among America's 100 largest counties, Nassau and Suffolk permitted less housing per capita from 2013 to 2022 than all but one county in Ohio, according to Bloomberg News.