New York's Aging Population Caps Job Growth, Hochul Budget Warns

Residents aged 65 and older now make up 19.3% of New York State's population, up from 15.0% a decade ago, and Gov. Kathy Hochul's own budget office says the aging workforce will cap employment growth through 2028.

The finding sits in the "Labor Markets" section of Hochul's mid-year budget plan. It states plainly that too few younger residents exist to replace retiring Baby Boomers.

"New York's labor market faces many of the same constraints as the nation, where cautious business expansion and limited labor force growth restrain hiring," the report said. "The growth of the State's labor supply will be limited due to constraints in population growth and the aging workforce."

The Division of the Budget projects unemployment to average 4.4% each year from 2026 through 2028, slightly above the national average. Stable unemployment alongside weak hiring is not good news. It means fewer people working, not fewer people looking.

What is driving the labor squeeze?

Analysts cited two forces. First, the falloff in foreign immigration, which historically offset residents leaving the state. Second, the high cost of living, especially the shortage of affordable housing in the New York City region.

The Trump administration tightened immigration rules, including ending temporary protected status for thousands of Haitians and Venezuelans. That move removed thousands of workers from the labor force.

Ken Girardin, a research fellow at the Manhattan Institute, called the combination a double blow.

"Housing and immigration are two important things that lubricate the economy. Both of those things have been disrupted in recent years," Girardin said.

"New York City is the first stop for new Americans. The dropoff in immigration has tightened the labor market. The tight labor market presents a challenge to New York's economy."

Girardin laid the housing problem at the feet of state and city politicians. Landlords have warehoused tens of thousands of units, he said, because they cannot afford repairs under the stricter rent regulations approved in 2019.

"The situation shows how fried the housing market is. New housing units are not coming on line fast enough and then you have the disruption in rent regulations," he said.

Are young families still coming?

The school data suggests they are not. New York City public school enrollment has dropped 19%, nearly 187,000 students, since the 2013-14 school year. It fell by 22,000 in the last year alone. Kindergarten enrollment has shrunk 23% in eight years, according to figures reported by City Comptroller Mark Levine.

"Students are unlikely to enter the public school system after kindergarten," Yiatin Chu, co-founder of Parent Leaders for Accelerated Curriculum and Education, wrote on social media, noting another dip in middle school grades.

"It's no wonder that closing or merging schools with declining enrollment is a top priority for this administration — there's no sign of a turnaround."

Chu argued education is the third leg of the stool for attracting families. She called for real Gifted and Talented programs, K-8 and 6-12 schools, more screened programs and preservation of the SHSAT entrance exams.

Steve Fulop, CEO of the Partnership for the City of New York, which represents the largest employers, framed affordability and competitiveness as one problem.

"We can't change the fact that New York is getting older, but we can change both whether a young family can afford to put down roots here and whether an employer chooses New York for its next hundred jobs," Fulop said.

Hochul and Mayor Zohran Mamdani have launched an expansion of publicly funded child care to attract and retain working parents.

Does the revenue picture offset the risk?

Partially. The budget report estimates tax revenues at $8.1 billion above the level projected when the financial plan was approved in May, citing strong national and state economies and financial market performance.

Girardin offered a caveat. The windfall depends on Wall Street, and New York's budget leans on the top 10.9% income tax rate for high earners plus capital gains taxes. A deep bear market, like 2008 or 2020, could reverse the gains as quickly as they arrived.