Available data shows that one million commuters represent 22% of NYC’s workforce, generating $200 billion in earnings in suburban communities
With trans-Hudson transit ridership set to surpass pre-pandemic levels by the 2030s, report calls for collaboration toward key investments in the Gateway Program, Penn Station and the larger regional transit network
New York, NY — Despite the prevalence of working from home and shifting commuter trends, a new report by Regional Plan Association (RPA) finds that economic ties binding the metropolitan region are stronger than ever. The flow of wages and salaries from employers located in New York City to New Jersey, Long Island, the Hudson Valley and Connecticut increased from 2019 to 2022, with northern New Jersey in particular seeing a boom in local earnings from residents with jobs based in the city.
The report, Commuter Dividend: The Economic Value of Commuters for City and Suburbs in the New York-New Jersey-Connecticut Region, estimates that in addition to the $141 billion earned by a million suburban residents working for New York City-based companies, the spending of these commuters generates 627,000 jobs and $59 billion in earnings annually. Simultaneously, an estimated 257,000 New York City residents hold jobs outside of the city, earning higher wages than city residents working in NYC and filling 7% of jobs in the suburbs. The resulting dynamic creates mutually beneficial outcomes to both city and suburban economies.
“Even with the rise of hybrid and remote work, our region’s commuting workforce continues to be an anchor to the economic health of our region,” said Tom Wright, President & CEO, Regional Plan Association. “Maintaining this vital connection between urban and suburban economies is not possible without a modern regional transportation system. We must prioritize critical transportation infrastructure investments such as Gateway, Penn Access and the Port Authority Bus Terminal to ensure that our region’s economy remains vibrant and competitive with other global centers.”
The report emphasizes the emergence of a phenomenon called the “COVID conundrum,” which refers to the counterintuitive finding that while fewer people are physically commuting into New York City each day than before the pandemic, there are more dollars flowing out to the suburbs. Findings show that while the number of people traveling to jobs in New York City five days a week has declined, many hybrid and remote ‘virtual commuters’ with city-based employers whose salaries have risen in recent years are still ensuring more revenue is flowing into suburban communities.
Report key findings on commuter impacts across the region include:
New Jersey: In 2022, 447,000 commuters living in northern New Jersey earned a total of $61.7 billion in wages from NYC-based jobs, leading the rest of the region in total number of commuters. These findings demonstrate that New York and New Jersey’s economies are especially interconnected. Commutership from New Jersey grew three times as fast as Long Island, Connecticut and the Hudson Valley, increasing 62% since 1990, and generating a local economic windfall of 310,000 jobs and $30 billion from worker spending in 2022. The rapid growth in New Jersey commuters has been driven largely by new housing that was added at a much faster pace in New Jersey than in the New York or Connecticut suburbs, as well as by new capacity on PATH and the NJ Transit commuter rail and bus systems.
Long Island: In 2022, 306,000 commuters living on Long Island earned a total of $37.9 billion in wages from NYC-based jobs. The spending of these commuters generated an additional 179,000 jobs and $15 billion in earnings on Long Island. Over 110,000 NYC residents commute to jobs on Long Island, representing the highest number of reverse commuters out of all regions studied. In terms of population growth, Long Island significantly lags behind New Jersey and the Mid-Hudson Valley due to a lack of new housing production.
Hudson Valley: In 2022, 211,000 commuters living in the Mid-Hudson Valley earned a total of $30.2 billion from NYC-based jobs. The spending of these commuters generated an additional 109,000 jobs and $10.2 billion in earnings in the Hudson Valley. Since 1990, Hudson Valley’s population has grown by 18 percent – a close second to northern New Jersey – with the most rapid growth occurring in counties west of the Hudson River. The Hudson Valley relies on commuter salaries more than any other NYC suburb, representing 34.3 percent of total wages in the area, with Long Island a close second at 33.9 percent.
Connecticut: In 2022, 47,000 commuters living in southwestern Connecticut earned a total of $11.4 billion, generating an additional 29,000 jobs and $4.3 billion in earnings in Connecticut. Compared to other suburbs, southwestern Connecticut commuters have the smallest footprint in NYC’s workforce, representing only one percent of NYC workers. However, these commuters have the highest average salaries by far, at $241,000. Furthermore, Connecticut’s population growth lags behind all other suburbs studied over the last three decades.
The report concludes that the region’s deepening economic interdependence underscores the urgency of regional transit investments. Key recommendations include:
Build Gateway: The Gateway Program is the most important infrastructure investment for ensuring that the region’s economy remains vibrant and competitive with other global centers. Projections indicate that Trans-Hudson transit ridership on peak days will exceed pre-pandemic peaks by the time the Gateway Program’s Hudson Tunnel Project is projected to be completed in the mid-2030s. The Biden administration has made a meaningful investment to advance the project and the region must do its part.
Invest in major transit priorities: We must repair and modernize our transit systems to meet even the most conservative estimates of future demand. In the last year, jobs have continued to grow both in New York City and in other parts of the region and commuter rail ridership was up to 70-80% of pre-pandemic levels by June 2023. Amtrak ridership is already 14% higher than it was before the pandemic. Other key regional transit investments include a new Port Authority Bus Terminal, the next phase of the Second Avenue Subway, the Penn Station Access Project that will connect Metro-North to Penn Station, and the Interborough Express that will connect the city’s outer boroughs. In addition to capital investments, it is critical that regional rail systems such as NJ Transit have ample operating funding to ensure this mutually-beneficial relationship continues.
Create less congested, more pedestrian friendly streets: Successful implementation of congestion pricing, in addition to generating $15 billion to invest in MTA subway, bus and commuter rail service, will make it easier and faster to travel into and about the CBD. Making the city’s streets less congested and more attractive to residents, workers and visitors alike will help ensure that the CBD remains a dynamic global center and an economic engine for the region. The addition of bus and bike lanes, pedestrian plazas, and green infrastructure to reduce heat and flooding will also make the CBD a more attractive place to live, work and play.
Build more affordable housing near transit hubs: A more affordable and balanced regional housing market is also essential to a healthy economy with symbiotic connections between all parts of the region. The severe shortage of affordable homes is widely recognized as one of the region’s greatest economic, social, and humanitarian challenges. It is also important to recognize that housing production is most anemic on the east side of the Hudson in the northern suburbs, Long Island and Connecticut. Converting uncompetitive office space to residential use is one of the ways we can address the challenge.
“This report makes clear that the symbiotic relationship between NYC and the surrounding communities continues to grow and continues to be very beneficial to all,” said Patrick McClellan, Policy Director for the New York League of Conservation Voters “Now more than ever elected leaders in the region must think beyond their political borders and coalesce around sound policies that will benefit everyone. From the Gateway project to mass transit infrastructure upgrades to congestion pricing, the priorities RPA lays out will mean three things: a cleaner environment, a better commute, and a supercharged and sustainable economic engine for the tri-state area.”
“The Regional Plan Association’s latest ‘Commuter Dividend’ report underscores the undisputedly critical role suburban regions play in New York City’s economy, despite the significant shift to remote work,” said Carlo A. Scissura, President and CEO of the New York Building Congress. “The report’s findings emphasize the need for bold investments that the Building Congress has long advocated for, such as advancing the Gateway Program and transit-oriented development, in order to support efficient connectivity between New York City and its surrounding suburbs. The future of New York City’s economic health and livability hinges on investing in a connected and equitable tri-state region.”
“New York City contains islands but it’s not an island; we are interconnected and interdependent on our surrounding communities,” said Riders Alliance Policy & Communications Director Danny Pearlstein. “Public transit binds our region together, makes urban life possible, and demands sustained investment from all levels of government to meet the needs of New Yorkers, commuters, and visitors.”
“REBNY has long stressed the vital importance of transportation infrastructure and its importance in bringing in commuters and tourists who are the lifeblood of the City’s economy,” Jim Whelan, President of REBNY. “As regional interdependence strengthens, we join with a diverse set of voices who are calling for financial and political backing of these projects, including the Hudson River Gateway. This research highlights the ever-increasing significance of strengthening transportation infrastructure in upcoming years.”
“This new report by the Regional Plan Association highlights the foundations of the success of the Tri-State region,” said Felicia Park-Rogers, Director of Regional Infrastructure Projects at Tri-State Transportation Campaign. “While the COVID pandemic temporarily changed the face of regional commuting, it did not change the underlying facts. Our regional urban and suburban economies are interdependent on one another. The ability to move back and forth between these geographies is the key to our long-term success as a global economic power region. Regional rail and mobility via the Gateway Project, Penn Access, LiRR, and bus and subways are some of the most important investments we can make to crash-proof our economy and keep the region growing and healthy.”
About Regional Plan Association
Regional Plan Association (RPA) is an independent non-profit organization that conducts research, planning and advocacy to expand economic opportunity, environmental resiliency, improved health, and better quality of life in the New York metropolitan area. Since the 1920s, RPA has produced four landmark plans for the region. The most recent was released in November 2017. For more information, please visit www.rpa.org.
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