Ten years ago this fall, the collapse of Lehman Brothers accelerated an economic meltdown that became the Great Recession. Before it was over, the nation’s unemployment rate had reached 10 percent, nearly 9 million payroll jobs had been lost, housing prices had plummeted and the stock market had crashed.

Although New York City was the epicenter of the 2008 financial crisis, the recession was less severe in the Empire State than in the nation as a whole. This was largely because the federal government’s immediate response to the crisis was focused on propping up New York-based financial institutions—and because much of New York State had never experienced the real estate bubble and boom that catalyzed the economic collapse.

The national economic downturn was officially dated from December 2007 to mid-2009, when Real Gross Domestic Product began to increase again, but non-farm payroll employment didn’t bottom out until the first quarter of 2010. The ensuing economic recovery has almost fully overlapped with Andrew Cuomo’s two terms as governor of New York, which began in January 2011. New York’s post-recession performance thus also comprises Cuomo’s economic record.

In remarks at the Sept. 25 annual meeting of The Business Council of New York State, Cuomo summed up that record as follows:

We created 1,000,000 jobs. New York State today has more private sector jobs than it has had in the history of the state. Period. Period. 8.1 million jobs. We’ve never had this many private sector jobs before in any economy. Unemployment went from 8.5 to 4.2, and the recovery was statewide. In the old days, you would see New York City doing very well, and upstate New York struggling. Look how even the recovery is all across the state. That’s thanks to the upstate [economic development] effort. That brought upstate success close to what’s happening in downstate.
[emphasis added]

screen-shot-2018-10-19-at-10-04-05-am-150x150-9251522The figures cited by the governor were accurate approximations of New York’s private sector job increase and the change in New York’s unemployment rate since 2010—on a statewide basis.

However, notwithstanding Cuomo’s claim to the contrary, the economic recovery has been far from “even” across New York. In fact, the last eight years have seen a sharp and growing economic divide between upstate and downstate.

By any standard, upstate New York’s economic recovery has been among the weakest of any region in the country. Indeed, parts of upstate have yet to “recover” from the recession at all.

The tale of two states is illustrated by data trends in three key measures of economic activity—payroll employment, unemployment rates and Gross Domestic Product—as summarized below.

1. Payroll Employment

Since 2010:

  • New York City has enjoyed the highest rate of private job growth in the state, followed by Long Island and the lower Hudson Valley.
  • Upstate New York has gained private-sector jobs at barely one-third the national rate, and less than one-third the downstate rate.
  • Only three states have had lower private job creation rates than upstate New York.
  • Twenty-three counties, all but one of them upstate, have yet to recover to their pre-recession private employment levels.

See details below.

2. Unemployment

The unemployment rate for New York State has fallen to less than half its January 2011 recessionary peak of 8.9 percent. But, as with payroll data, there has been a sharp regional divergence in the trends driving unemployment rates lower.

In downstate labor markets, the unemployment rate dropped even while the labor force was expanding, thanks to an increase in resident employment. Upstate, the unemployment rate has dropped because there are fewer people looking for work, not because more are working. In fact, resident employment upstate is lower than it was when Cuomo took office.

See details below.

3. Gross domestic product (GDP)

Since the national economy hit bottom in 2009:

  • New York State’s Real (inflation-adjusted) GDP has grown by 12.7 percent, compared to a 16.8 percent average for all states.
  • The state’s annual growth in Real GDP has trailed the national average in six of nine years—including six of Governor Cuomo’s first seven years in office.
  • Five of 11 upstate metropolitan areas have experienced negative Real GDP growth rates since 2009, indicating their economies have contracted. The fastest growing upstate metro area (Albany-Schenectady-Troy) has expanded at only half the rate for all U.S. metros.

See details below.

* Throughout this analysis, downstate is defined as the 12-county Metropolitan Commuter Transportation District, including New York City, Long Island and the lower Hudson Valley. Upstate, except where otherwise noted, refers to the 50 counties north of Orange and Dutchess in the mid-Hudson Valley.

1. Payroll Employment


The charts and tables in this section are based on private establishment data from the Quarterly Census of Employment and Wages, or QCEW, as prepared by the New York State Department of Labor in cooperation with the federal Bureau of Labor Statistics (BLS). The base period of comparison is the first quarter of 2010, when the three-month average of payroll employment as measured by the QCEW reached its post-recession low. The end period is the first quarter of 2018.

See “Research Note” for more.

Click here for a sortable online spreadsheet of private payroll employment totals across the U.S. and in New York counties for 2008-2018.

As illustrated in the following chart, total private-sector employment growth in upstate counties has been about 6.3 percent since 2010—barely one-third the U.S. growth rate of 17.8 percent during the same period, and even further below the downstate growth of 21.2 percent.


Source: NYSDOL, Quarterly Census of Employment and Wages


Private-Sector Job Growth by County

The county-by-county breakdown of private job growth across the state is illustrated in the map below, and detailed in the table that follows.


screen-shot-2018-10-20-at-12-14-58-pm-3264913Source: NYSDOL, Quarterly Census of Employment and Wages



As detailed above, the state as a whole has gained 1.1 million private-sector jobs since 2010, a growth rate of nearly 17 percent.  The 12-county downstate region—New York City, Long Island and the Lower Hudson Valley—accounted for 985,000, or 88 percent, of the increase, a growth rate of 21 percent. Upstate’s estimated growth rate was a much more modest 6.3 percent, or 130,108—barely two-thirds the increase recorded in Brooklyn (Kings County), and only one-third the jobs increase in Manhattan (New York County) alone.

New York’s statewide private employment growth rate ranked 33rd out of 50 states. The downstate region’s employment growth rate was higher than all but a dozen states. However, the upstate job growth rate rate was lower than all but three states—Wyoming (1.5 percent), West Virginia (1.6 percent) and Alaska (4.8 percent).


Private-sector payroll employment hit a pre-downturn peak in early 2008. Measuring from that base, as shown in the table below, private employment in 23 of New York’s 62 counties had yet to recover to pre-recession levels as of early 2018.


The Urban Cores

The table below breaks down private job totals for New York metropolitan and micropolitan statistical areas, as well as for the state and nation as a whole. As shown, private employment during the recovery has actually declined in three metro areas (Binghamton, Elmira and Watertown-Ft. Drum), and in two micro areas (Jamesrtown-Dunkirk-Fredonia and Olean). The Southern Tier, stretching along the Pennsylvania border from the Binghamton region west to Jamestown, has turned in the weakest job growth of any region. This is also the area of the state that stood to gain the most economic activity from hydraulic fracturing of Marcellus Shale natural gas deposits, which was banned by the state at the end of 2014.


Research Note: The QCEW collects employment and wage data from employers covered by New York State’s Unemployment Insurance Law. It covers about 97 percent of all workers, excluding only some agricultural workers, railroad workers, private household workers, student workers, the self-employed and unpaid family workers. The QCEW is a more accurate measure of employment because it is an official count of the workforce—as opposed to the Current Employment Survey, or CES, the source of the Labor Department’s monthly jobs report, which is based on a statistical sample of employers. The BLS conducts a benchmark revision to the prior 15 months of CES estimates every March using the QCEW data.

In the tables and charts above, the full national, state and local QCEW published by the BLS is the source of job counts for the U.S. as a whole and for other states, while the New York statewide, county and metropolitan area data are from the state’s own QCEW reports. Job totals in the county and metropolitan tables don’t precisely match because of differences in the way payroll jobs are assigned to geographic areas by the Labor Department.


2. Unemployment Rates

Governor Cuomo frequently has cited a decrease in unemployment rates as evidence that his economic development policies are working. But the unemployment rate, in particular, can be greatly misleading as an indicator of economic growth—or the lack of it.

See “Research Note” for more.

The following charts are derived from the latest available state Labor Department estimates of the labor force, the number of employed residents and the number of unemployed residents for New York’s regional labor markets. The data are not seasonally adjusted; however, minimizing seasonal variations, all estimates are for the same month (August).

Since their summer 2012 peak, the upstate and downstate unemployment rates have both moved sharply downward—but for sharply different reasons.

Downstate, the drop in unemployment during the recovery period under Governor Cuomo has been driven by an increase in resident employment (the red line), even while the number of people seeking work (the blue line) was also rising. Specifically, according to New York’s Local Area Unemployment Statistics, the downstate resident labor force increased by 289,000 people from August 2010 to August 2018—but the number of employed people in the region increased almost twice as much, by 576,000.


But the picture is quite different upstate, where the same government data indicate that resident employment in 48 counties (the red line) dropped by a combined total of 87,500 from August 2010 to August 2018. The unemployment rate nonetheless decreased because the labor force in those counties (blue line) decreased by 210,100 people.



Research Note: The U.S. Bureau of Labor Statistics estimates New York’s unemployment rate based on a statistical regression model that primarily relies on the Current Population Survey (CPS). Conducted in-person or via telephone, the CPS reaches about 3,100 households in New York State every month. Respondents are asked a series of questions to determine how many persons in their household are employed in a paid job, and how many are jobless and looking for a job but unemployed. The labor force is the sum of employed and unemployed persons, and the unemployment rate is percentage of the total who are unemployed. In terms of geographic distribution, resident employment and unemployment statistics are based on where workers live, while “payroll” employment statistics are based on where jobs are located.

3. Real Gross Domestic Product

Gross Domestic Product (GDP), based on the estimated total market value of all the final goods and services produced in a given country or region within a given period of time, is a broad measure of overall economic activity. The U.S. Commerce Department’s Bureau of Economic Analysis produces quarterly estimates of Real (inflation-adjusted) GDP at the state level, as well as annual Real GDP estimates for metropolitan areas across the country.

The charts compare the performance of New York State and its metropolitan areas to national average levels.


As shown above, New York State’s Real GDP rose 12.7 percent from 2009 to 2017, while the average growth for all states was 16.8 percent. New York’s compound annual growth rate of 1.5 percent during this period ranked 30th out of 50 states.


On an annual basis, New York’s Real GDP growth rate exceeded the rate for all states in three out of nine years (2009, 2010 and 2012) since the final year of the Great Recession, including one of Governor Cuomo’s first seven years in office, according to preliminary federal estimates.

Measuring cumulative Real GDP growth from 2009 to 2017, only one New York State metro area—that containing New York City, which also includes some counties in northern New Jersey—ranked in the top half of 383 metro areas nationwide, as shown below. Five upstate metro areas had negative growth rates, indicating their inflation-adjusted economic output was smaller in 2017 than it had been in 2009. Those areas all ranked within the bottom 20 percent of all U.S. metro areas for which GDP estimates were produced.


About the Author

E.J. McMahon

Edmund J. McMahon is Empire Center's founder and a senior fellow.

Read more by E.J. McMahon

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