NY Policy and the Upstate Economy NYC Economy NYC Jobs NYS Jobs Uncategorized

New York City Dominating State Job Growth; Rest of State Still Growing-Slowly

New York City is now utterly dominating job growth in the State of New York. In the past two and one-half years, 79% of all new jobs in the State have been created in New York City. New York State Labor Department seasonally adjusted data show that 230,000 of the nearly 293,000 jobs created in the State from December 2016 to June 2019 were in the City. The growth rate in the City for the 2 ½ year period was 2.1% per year; for the rest of the State separate from the City, the growth rate was about one-half of one percent per year*.The City’s share of growth has picked up even more since the end of 2017; 138,000 of the 169,000 jobs created statewide from December 2017 to June 2019 were created in the City, nearly 82%. The City’s share of total State employment was 46.5% at the end of 2016; as of June 2019 its share was 47.5%.

In October 2018, I wrote in the Gotham Gazette about the increasing contribution of the City economy to the State’s tax revenue, much of it due to its share of employment growth. The increasing share of jobs will only accelerate this trend. While the City’s economy has become the engine of the State’s economic growth, the Cuomo administration has focused much of its attention to rescuing the Upstate New York Economy, which faltered in the two recessions that occurred after 2000.

Dec.2010 Dec.2016 June.2019
New York State 8587.4 9493.6 9786.2
New York City 3781.1 4413.6 4643.9
Source: NY State Labor Department Seasonally Adjusted Employment

Job growth rates for both the City and the rest of the State have slowed compared to the period between December 2010 and December 2016. The City gained 633,000 jobs in that six-year period and its growth rate was 2.8% per year, compared to 2.1% per year since December 2016. The rest of the State gained 274,000 jobs in those six years, a growth rate of just under 1% per year. The City was 70% of the State’s job growth in those six years, quite dominant then, but its share of growth just keeps expanding. Comparable national job growth rates for December 2010 to December 2016 were 1.9% per year, and 1.6% from December 2016 to June 2019.

One reason for slower growth outside the City is that job growth rates in the New York City suburbs have fallen to about the same rates of growth as in Upstate New York.  Upstate New York is a big area and one should not generalize too much about it. The growth rates in Upstate New York vary greatly by metropolitan area; some areas are achieving modest growth, others hardly any growth at all, nine years after the Great Recession ended.

Long Island gained about 100,000 jobs from December 2010 to December 2016, but just 19,000 jobs in the past 2 ½ years. The Orange-Rockland-Westchester metropolitan area gained 50,000 jobs in the 10-16 period, but just 7,000 from the end of 2016 to this past June. These two New York City suburban areas had their growth rates slow from 1.3-1.4% per year from 10-16, to under six-tenths of one percent per year in the past 2 ½ years. One of their possible challenges may be the competition from New York City itself, since the City has become such a powerful economic and social magnet and these suburban areas are right nearby.

Dec.2010 Dec.2016 June.2019
Nassau-Suffolk 1237.6 1338 1356.9
Orange-Rockland-Westchester 663.7 713.9 724.3

The four larger Upstate Metropolitan areas are growing. The Syracuse metropolitan area has gained more than 9,000 jobs in the past 2 ½ years, growing at a rate of 1.2% per year. The Buffalo-Niagara Falls area has gained 10,500 jobs since December 2016, for a growth rate of ¾ of one percent per year. From 2010 to 2016, it gained 20,000 jobs, for a growth rate of six-tenths of one percent per year.

The Rochester area gained 7,300 jobs in the past 2 ½ years, a growth rate of .55 of one percent per year. From 2010 to 2016, it had gained about 23,000 jobs and had a growth rate of .8 of one percent a year. The Albany-Schenectady-Troy area gained 7,700 jobs since the end of 2016, for a growth rate of .7 of one percent a year. It had done better in the 2010-2016 period, gaining nearly 34,000 jobs in those six years for a growth rate of 1.3% per year.

Dec.2010 Dec.2016 June.2019
Buffalo-Niagara Falls 537.9 558 568.5
Rochester 509.9 533.1 540.4
Albany-Schenectady-Troy 432.7 466.5 474.2
Syracuse 308.9 316.8 326.1

Several other Upstate metropolitan areas are growing at more than 1 percent a year. The Ithaca metro area had the best sustained growth since 2010 in Upstate New York, gaining more than 7,000 jobs, including 2,600 since the end of 2016, for a sustained growth rate for the 8 ½ years of about 1.5 % per year. Two Hudson Valley areas,  Dutchess-Putnam and Kingston, have gained about 5,700 jobs over the past 2 ½ years for a growth rate of 1.1% per year. They have gained 13,000 jobs since December 2010.

Five smaller Upstate Metro areas are struggling. Binghamton, Utica-Rome, and Elmira have gained 2,200 jobs between them since the end of 2016, for a combined growth rate of just three-tenths of one percent a year. One Northern New York metro area, Glens Falls, has lost jobs since the end of 2016, and the other Northern New York area, Watertown-Fort Drum, has only gained 100 jobs in the past 2 ½ years. The combined employment base of these five metropolitan areas is about 368,000, making them combined just barely larger than the Syracuse metro area and smaller than each of the four larger Upstate metro areas.

Dec.2010 Dec.2016 June.2019
Dutchess-Putnam 141.4 146.6 149.9
Utica-Rome 129 127.6 128.6
Binghamton 107.8 103.2 104.2
Ithaca 59.1 63.9 66.5
Kingston 59.8 61.9 64.4
Glens Falls 54.5 56.2 55.5
Watertown-Ft.Drum 42.9 42 42.1
Elmira 39.5 36.8 37.2

The Labor Department’s estimates for the 12 Upstate metropolitan areas show job gains of 45,000 since the end of 2016 to June 2019, with employment rising from 2.512 million to 2.557 million, or a growth rate of seven-tenths of one percent a year. The metropolitan areas of Upstate New York include about five-sixths of total employment in Upstate New York.

State Labor Department estimates for the non-metro areas of Upstate New York from 2016-2018 show job gains of a little over 4,000, for a growth rate of about four-tenths of one percent per year. The non-metro areas of Upstate New York have a little more than 500,000 jobs. They are one-sixth of Upstate New York employment and about 5% of total New York State employment.

The loss of population continues to be a challenge for sustaining economic growth in Upstate New York. Here is a population growth table taken from the New York State Assembly’s annual Economic and Revenue report from early 2019. It shows that New York City was 95% of the State’s population growth between 2010 and 2017. The Hudson Valley, the Capital Region, and Long Island had small but positive population growth, but the rest of the Upstate New York regions lost population. Clearly these regions would benefit from new immigrants and increases in the allowable number of refugees into the United States.

And what of the Cuomo administration’s efforts to help Upstate New York? The administration’s main initiatives have included the Buffalo Billion, the $1.5 billion Upstate Revitalization Initiative, the Downtown Revitalization Initiative (some projects are in the Downstate area), the Albany Nanotechnology Initiative (begun during the Pataki administration), infrastructure spending in transportation and water and sewer upgrades, Tax-Free New York, cheap hydropower allocations from the State Power Authority,  new investments in renewable technologies, especially windpower in the Lake Ontario area. Surely these initiatives, and there are many, have had a positive impact, and are ongoing efforts that are budgeted for several years of future investment. But for them, the Upstate New York economy would likely be in even weaker condition.

Since the end of 2010, the aggregate numbers for Upstate show a net gain of 156,000 jobs. The State had a $10 billion deficit in 2011, the first year of the Cuomo administration, and there were spending cuts that affected State and local government employment, especially local schools. Upstate New York lost 37,000 government jobs between 2010 and 2016, with government jobs stabilizing around 2013. Government jobs have remained relatively flat since that time in Upstate New York, so private sector employment is higher than the 156,000 net gain, probably about a 190,000 increase. It should also be noted that the State Labor Department’s separate regional metro data show somewhat higher job growth numbers*.

The most recent year-over-year growth rates by State, from 2017 to 2018, showed 16 states had growth rates of seven-tenths of one percent per year, the Upstate New York growth rate, or less. 23 states had growth rates of less than one percent.  Upstate New York is not at the bottom of the nation in growth – it is slowly growing

The State has also cut income, corporate, and property taxes, to the chagrin of progressives who would like to see stronger government spending. Governor Cuomo came into office in the aftermath of the Great Recession, and concern about whether New York’s taxes were undercutting business investment and encouraging outmigration affected early decision-making about how to grow the State’s economy. More recently, recognition about the importance of infrastructure investment has replaced tax cuts as a priority, especially with the uncertain impact of Federal tax reform on New York.

Since December 2010, the economy of the City of New York has essentially been carrying the State, with the City gaining 863,000 of the 1.199 million jobs gained statewide.

*The State Labor Department notes in its monthly employment press releases that the separate regional Metro area employment estimates do not match up (add up to the same numbers) as the aggregate employment numbers reported Statewide. The Statewide employment reports are estimated independently of the regional estimates. As a result there are discrepancies between subtracting New York City and its suburban areas from the Statewide numbers to get the Upstate employment numbers, versus adding up each of the separate regional Upstate metro areas. Using aggregate numbers results in smaller employment growth totals for Upstate New York and the rest of the State outside New York City. The aggregate numbers show a growth rate of one-half of one percent a year; the regional numbers show .6-.7 tenths of one percent a year.

Jim Brennan was a member of the New York State Assembly for 32 years and retired at the end of 2016. He chaired four committees, including the Assembly Committee on Corporations, Authorities, and Commissions for six years, the Committee on Cities for five years, and the Committee on Mental Health and Developmental Disabilities for six years. There are 96 Brennan laws on the books of the State of New York and Jim won three national awards for his legislative work during his career.

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