The State of the State’s job growth numbers

by E.J. McMahon |  | NY Torch

In his fourth annual State of the State message tomorrow, Governor Andrew Cuomo will (naturally) seek to highlight the most positive aspects of New York’s economic performance under his leadership. As the Governor put it during a press conference yesterday previewing his tax agenda:

[W]e’ve added 380,000 private sector jobs since 2010. New York is number two in jobs created since the recession … We have more jobs today than at any time in history of the state of New York. Unemployment in every region is down from where we started three years ago, so all the arrows are pointed in the right direction.”

All of these statements are accurate — as far as they go. However, on closer examination, the employment numbers for New York paint a more mixed picture. Based on the latest available data from the state Department of Labor and the U.S. Bureau of Labor Statistics (BLS):

  • New York State has grown more slowly than the national average since Governor Cuomo took office, largely as a result of a modest slowdown in job growth relative to the U.S. average during the past 18 months.
  • There continues to be a pronounced regional variation in economic performance. Thanks to strong growth downstate, especially in New York City, New York State ranks 21st out of 50 states in its rate of private job creation since November 2010. But if the 50 counties of upstate New York were a separate state, they would rank dead last during the same period.

Compared to most states, New York lost fewer jobs during the recession and recovered more quickly to previous employment levels. However, New York has not outperformed the nation in the last three years. On a seasonally adjusted basis, private employment statewide has risen by 5.4 percent since Governor Cuomo took office, compared to a 6.3 percent increase in the nation as a whole during the same period, according to BLS statistics.*

The preliminary seasonally adjusted totals, complete through November, indicate that private-sector job growth in New York kept pace with the nation for most of 2011 and 2012, but has fallen behind during the past 18 months, as shown in Figure 1 below.

There are striking regional disparities in the rate of private-sector job creation within New York State. As shown in the table below, private employment in the downstate region—including New York City and seven suburban counties of Long Island and the Lower Hudson Valley—has grown by more than four times as much as in upstate New York.

During the three-year period covered by the latest data, the weakest metropolitan labor markets in the state have Binghamton, Elmira and Utica-Rome, respectively. The upstate area with the greatest job growth, Glens Falls, was also the only one to exceed the statewide average. Among upstate’s larger labor markets, the strongest job gains were in the Albany-Schenectady-Troy metro area, which has benefited from a large infusion of state subsidies to high-tech businesses over the past 15 years.

In percentage terms, New York State as a whole ranks 21st out of 50 states in private job creation since November 2010. But upstate alone, if considered as a separate state, would rank dead last in job growth, as shown in Figure 2 below.

One thing upstate and downstate have in common is a long-term decline in manufacturing employment, which has dropped by 50 percent in the last 2 years. Manufacturing employment has been decreasing nationwide for decades–until recently, at least—but in New York, the losses have been greater.

As shown below in Table 2, during the most recent three-year period, New York’s manufacturing sector lost 16,000 jobs, a drop of 3.4 percent, while the nation was adding 412,000 jobs, a growth rate of 3.5 percent.Upstate manufacturing losses were concentrated in Rochester and Syracuse, while Buffalo held its own. The largest percentage gain in manufacturing jobs came in Albany-Schenectady-Troy, which has benefitted from state-subsidized high-tech development. New York City, which has been hemorrhaging manufacturing jobs for decades, actually registered a small gain during the three years ending November 2013, according to preliminary data.

The tax-cut package endorsed by the governor yesterday—first recommended by the Pataki-McCall commission last month—combines dubious “property tax relief” with solid pro-growth business tax cuts, including the complete elimination of the remaining state corporate tax on manufacturers and a statewide reduction in the corporate tax rate (to its lowest level since 1968).  These changes will certainly, to at least some degree, improve the state’s economic competitiveness, but upstate has a long way to go.

Unfortunately, the Cuomo administration continues to stall or ignore other reforms that would do more to boost the struggling economy north of the mid-Hudson, in particular — starting with approval of regulations permitting natural gas exploration through hydraulic “fracking” operations in the Southern Tier, where employment has remained flat or declining even during the economic recovery.


* The data includes preliminary estimates for October 2013 and November 2013 and are subject to revision. The next annual “benchmark” revision of the establishment data will be issued with the January jobs report in mid-February; it’s always possible that these data will show some relatively improvement in the situation.

- E.J. McMahon is the President at the Empire Center for Public Policy.