New York Economy: Jobs, Wages, and Cost of Living

New York is the third-largest state economy in the United States, behind California and Texas. It punches even higher than that suggests, because New York City is the financial capital of the world and a hub for media, advertising, and global business. The state's economic story is really two stories — New York City and the rest of New York — stitched together.

This is a plain-English tour. For the national picture, see The State of the U.S. Economy and the Economy hub.

How big is the New York economy?

For example, New York's recent state GDP has run around $2.1 trillion, according to the Bureau of Economic Analysis. Population is roughly 19.5 million, per the U.S. Census Bureau. New York City alone accounts for about 8.5 million of those people and a much larger share of the state's economic output.

The biggest industries

A few sectors carry an outsized share of New York's economy:

• Finance and insurance — Wall Street, the New York Stock Exchange, and a huge concentration of banks and asset managers.
• Real estate — both as an industry and as a share of GDP, because Manhattan property values are so high.
• Professional services — law, consulting, and advertising are heavily concentrated in New York City.
• Media and tech — major newspapers, TV networks, streaming companies, and a fast-growing tech scene in Manhattan and Brooklyn.
• Tourism — New York City is one of the most-visited cities on Earth.
• Healthcare and education — the state has dozens of major hospitals and universities, employing huge numbers of workers upstate as well as downstate.
• Agriculture — upstate New York is a serious dairy and apple producer; the Finger Lakes have a growing wine industry.

Jobs and wages

State labor data is published by the New York State Department of Labor, with national-level data from the Bureau of Labor Statistics. For example, New York's statewide unemployment rate has typically run close to or a bit above the national average, with sharper swings in New York City than upstate.

The minimum wage in New York is well above the federal floor and varies by region. New York City, Long Island, and Westchester County have a higher minimum than the rest of the state, reflecting the higher cost of living.

Taxes in New York

New York has a progressive state income tax, and New York City levies its own city income tax on top of that — one of the few cities in the country that does. The combined state-and-city rate on high earners in NYC is among the highest in the United States.

The state sales tax rate is 4%, but local rates push the combined rate to around 8% to 9% in most counties, and 8.875% in New York City. Property taxes are uneven: very high in some Long Island counties, more moderate in much of upstate.

State tax forms and rules live at the New York State Department of Taxation and Finance. You can read more about how sales tax works in our glossary.

Cost of living

Cost of living in New York City and its suburbs is among the highest in the country, especially housing. Upstate New York — Buffalo, Rochester, Syracuse, Albany — is much more affordable, often below the national average for housing.

The federal government tracks region-specific Consumer Price Index data through the BLS New York office, and HUD publishes Fair Market Rents for every county at HUD User.

How does the New York economy fit into the national picture?

New York's role in the national economy is tilted toward finance and information rather than goods. When stock markets boom, New York City budgets boom along with them. When markets contract, the city feels it first. Outside the city, the upstate economy looks more like the rest of the Northeast — a mix of manufacturing, education, healthcare, and farming.

A tale of two New Yorks

It is worth repeating: New York City's economy and upstate New York's economy do not behave the same way. New York City's wages and tax revenue swing with global finance. Upstate cities like Buffalo, Rochester, and Syracuse are still working through the long transition away from heavy manufacturing, with universities, hospitals, and small tech firms taking on a bigger role. The U.S. Census Bureau shows the population shift over time, with most growth concentrated in or near the New York City metro area.

Why finance is so concentrated here

A lot of finance still happens in New York City partly out of habit — once a critical mass of banks, lawyers, regulators, and exchanges set up shop in lower Manhattan, it became hard for any single firm to leave. The trading floors of the major exchanges and the headquarters of large U.S. banks all sit within walking distance of each other, with the Securities and Exchange Commission overseeing much of that activity from Washington. That density supports tens of thousands of related professional-service jobs in law, accounting, consulting, and tech.

A note on the numbers

Numbers in this article change every quarter — always check the latest from BEA, BLS, and the New York State Department of Taxation and Finance for the most current data.