The City needs to focus on building its own ownership society, not just boosting incomes.
Nearly two-thirds of New Yorkers are unable to meet the city’s cost of living — coming up $40,000 shy annually on average. So, though they’re living in New York, they’re digging themselves into a financial hole as they do.
So says the NYC True Cost of Living Measure report released in March by the New York City Mayor’s Office of Equity & Racial Justice. Most families strain to afford basic costs like housing, transportation, childcare, food and savings. Three-quarters of Latino New Yorkers struggle to afford these fundamental necessities, compared to one-third of white New Yorkers. These are not individual failures; these are systemic issues.
So what do we do about an economy where a breakfast staple like juice costs $9 per carton, and such basics are out of reach for more than half of the city’s population?
Workforce development is a partial answer. New York City’s $640 million workforce development system is designed to build shared prosperity for residents and employers alike. Broadly overseen by the Mayor’s Office of Talent and Workforce Development, it is a complex network of public, private and nonprofit actors that coordinate to recruit, train and place youth and adult job seekers in local jobs.
The system serves hundreds of thousands of New Yorkers each year, placing them in roles in health care, technology, sustainable infrastructure and more — a significant feat in a city where nearly one-fifth of adults over 25 lack a high school diploma or equivalency. Starting wages, however, can be low, and retention rates can be uneven.
The problem is that the traditional “pathways” model of workforce development on which the system is built — in which workers must climb a ladder to economic security — relies on precarious employment and volatile earnings, reinforcing asset poverty. Earnings do not translate to wealth, so workers see temporary gains rather than durable assets.
This volatility plays out along racial lines. In 2023, the median incomes for white and Black New Yorkers were approximately $108,000 and $60,000, respectively. At the wage level, the Black-white gap was $16 per hour in 2022. Even among the City’s municipal workforce, where greater parity might be expected, disparities still exist, with workers of color earning 84 cents per dollar compared to white workers.
Consequently, racial wealth disparities are compounded and vast. Compared to white New Yorkers, whose median wealth is $320,000, Black residents hold a median $2,800 in wealth; for Latino New Yorkers, the median is $0. A system that targets income alone is insufficient to bring asset equity to New Yorkers.
Yet the current workforce development system measures its success in wages, not wealth. It proposes that, through the traditional model, individuals will access jobs with family-sustaining wages, benefits and advancement opportunities.
But prosperity implies more than a paycheck. It points to a more durable construct — one that can fundamentally reshape an individual’s life from living on the margins to living abundantly. While a worker’s earnings can transform their life and should not be dismissed, income is highly volatile — especially in this increasingly unsettled economy — and therefore cannot provide lasting economic security. The traditional model of employer-centered workforce development does little to combat racialized asset poverty.
In today’s employer-demand-driven model, wages are consumed by basic needs, and workers become asset-poor and unable to withstand financial shocks or achieve intergenerational wealth. Too often, workers become chronically reliant on the workforce system for entry-level employment, reentering the cycle of precarity and asset poverty. This model cannot close racial wealth gaps.
Focusing on wealth pathways would mean taking a different approach — aligning workforce development to wealth as an outcome.
A home is the greatest asset most individuals will own in their lifetime, but only one-quarter of Black and less than one-fifth of Latino New Yorkers own their homes, compared to nearly half of white New Yorkers. Homeownership should not be a pipe dream for New Yorkers of color. A focus on wealth pathways would incentivize employers to adopt evidence-based strategies to increase homeownership, including automated savings, homeowner education and down-payment assistance programs.
This approach also expands access to employment benefits like retirement accounts and life insurance policies. Workforce developers should prioritize filling demand for employers who provide the conditions for asset-building, while the City should encourage businesses to offer financial assets. Shared prosperity should be more than a policy slogan.
Simultaneously, government should focus on addressing inequitable asset markets that, both currently and historically, have acted as barriers to wealth-building for people of color. This includes greater support for community development financial institutions (CDFIs) and Black-led banks and credit unions, which are linked to increased Black wealth-building.
These tools would work in support of, not simply in addition to, workforce development outcomes.
As a homegrown strategy, New York City’s Workforce Data Portal is a ready-made foundation for tracking wealth outcomes. Developed by the Mayor’s Office for Economic Opportunity, the portal standardizes and makes public workforce development outcomes ranging from clients served to full-time placements, credential attainment and job continuity after two years.
While it is a sophisticated workforce measurement system, the portal primarily tracks labor-market outcomes rather than wealth outcomes. Expanding the Workforce Data Portal to include measures of financial security and asset accumulation would allow the City to assess whether workforce investments are producing durable economic mobility rather than temporary earnings gains for New Yorkers of color.
Connecticut’s Wealth Accelerator mirrors what an asset-forward strategy could resemble, albeit on a smaller scale. The Wealth Accelerator mobilizes resources toward the common goal of closing racial wealth gaps for low- and moderate-income families by scaling wealth-building solutions. Through its Cash Catalyst, the program’s signature $500,000 Baby Bond initiative, the Wealth Accelerator is testing what it means to provide assets alongside social services — an approach that flips the pathways model on its head.
At present, several national workforce organizations, including Jobs for the Future and Shift Work Forward, have been working with cities to define quality jobs and partner with employers that provide competitive pay, benefits and advancement opportunities. New York City could be at the forefront of defining quality jobs as those that not only provide short-term gains but build long-term asset pathways such as retirement contributions, emergency savings programs, homeownership assistance and employee ownership opportunities. Closing racial wealth gaps will require incentivizing employers to provide jobs that not only lead to wealth pathways, but are pathways to economic security.
The True Cost of Living in New York City makes it evident that income isn’t enough. To truly make it in this city requires maintaining a baseline savings rate that breaks the paycheck-to-paycheck cycle and allows New Yorkers to begin building a financial buffer.
Even as some workforce leaders have begun to question the mayor’s economic strategy, New York City has an opportunity. Mamdani, still early in his first term, appointed a deputy mayor for economic justice — the first role of its kind in New York City. Appointee Julie Su’s remit is to measurably improve the lives of New Yorkers and oversee the Mayor’s Office of Talent and Workforce Development, among other responsibilities. Her resume includes serving as the acting secretary of labor in the Biden administration.
Among her priorities, Su has listed promoting worker and consumer protections, increasing access to childcare and transportation, and making sure working-class New Yorkers can enjoy the city’s cultural assets. While these priorities are important, they overlook a key institution: Reforming the City’s misaligned workforce development system must be a priority if the administration is to ensure that basic ease is not a luxury.
New Yorkers shouldn’t just tread water. Government needs to help them swim.
