Regional economic distinctions are
essential in better understanding New
York’s economic challenges
As we enter the 4th year of recovery nationally,
New York has not yet recovered the jobs lost in
the last recession.
Employment
First half of
2001
Employment
First half of
2006
Change –
Absolute
Change Percentage
US
131,882,300
134,490,300
+2,608,000
+2.0%
NYS
8,615,100
8,539,800
-75,300
-.9%
NYC
3,717,100
3,628,200
-88,900
-2.4%
Eastern NY
2,622,900
2,684,200
+103,800
+2.3%
Western and
Northern NY
2,275,700
2,230,300
-45,400
-2.0%
New York’s economic performance in recent
years has fallen considerably short of its
potential

Since 2000, the average annual rate of employment
growth, real per capita income growth and real wages for
New York State as a whole have all been close to ZERO



Only region with growth in employment and real wages was
Eastern New York
Western and Northern NY experienced declines in employment and
real wages, slight increase in per capita income only due to
population decline
NYC declined on all three indicators
Western and Northern NY economies are
particularly distressed




Population has been declining, particularly
suffered loss of young adults aged 20-34
This region did not benefit from the “boom”
of the late 1990s – job growth less than half
the state average
Not hit as hard by the recession but
employment has not recovered
Upstate metropolitan areas (Binghamton,
Buffalo, Elmire, Ithaca, Rochester, Syracuse
and Utica-Rome) have lost 42,000 jobs since
2001
NYC was hit hard by the recession but seems to
be recovering.



Between the first half of 2003 and the first
half of 2006 payroll employment grew by
2.9% - 104,000 jobs
For the first half of 2006, NYC’s job growth
was 1.6%, more than twice the national job
gain
New York City lost 193,000 jobs during the
recession --- still 89,000 below level for the
first half of 2001
Eastern NY has done better than the nation as a
whole.


Eastern NY includes the Hudson Valley, the
Capital District and downstate suburbs – Long
Island, Westchester, Rockland and Putnam
Counties
This region has seen a growth in payroll
employment – since 2000 has done better
than the nation as a whole


2.3% growth vs. 2.0% growth nationally
63,000 jobs in the past three years – only lost
1,700 in the recession
Manufacturing employment continues to be the
predominant economic driver in Western NY
Many of NY’s manufacturing industries are
among the most productive in the nation.
The current recovery has not seen an increase
in median real wages. Even in NYC – real
median wages are still below the 2002 level.
While NYS output per worker increased by 9.3%
between 2000 and 2005, the average real wage is only
1.6% higher in 2005 than in 2000.
NY has the widest top-bottom
income gap among all states



Average income of families in the top quintile
8.1 times greater than average income of
families in bottom
Sixth widest gap between rich and middle
quintile
Only in the 1990s did the middle and lower
quintile families experience real income gains.
Evidence suggests that during this recovery, the
gap is widening.
For 2005, New York’s 14.5% poverty rate was
almost two percentage points higher than than
the national poverty rate.
18
New York
U.S.
17
16
15
14
13
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
1989
1988
1987
1986
1985
1984
1983
1982
1981
11
1980
12
Poverty rates in Syracuse, Rochester,
Buffalo, Albany and NYC are even higher.
Health care coverage and rising health care
costs are major cost challenges facing NY
The share of the population in NY without
health insurance coverage has fallen thanks to
expanded public coverage but 2.6 million people
are still have no health insurance.
State fiscal actions have compounded local
fiscal stress and hindered economic recovery
The tax cuts enacted since 1994 will reduce state revenues by almost
$16 billion during the 2006-2007 fiscal year.
$20
Revenue impact, in billions of tax cuts enacted in 1994-95 through 2005-06.
$15.43
$16
$15.82
$14.08
$12.77
$13.23
$12.01
$12
$11.21
$8.97
$7.32
$8
$6.12
$4.22
$4
$1.44
$0.47
$0
1994-05 1995-96 1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07
One bright spot – the increase in the
minimum wage did not dampen job
growth among low-wage workers



NYS minimum wage went up from
$5.15 an hour to $6.00 an hour on
January 1, 2005. Will increase to $6.75
in 2006 and $7.15 in 2007
No evidence of job losses in retail trade
or food services --- NY grew faster than
other states in region and as fast or
faster than nation as a whole
No decrease in hours worked either
Figure 2.14
Employment in New York, four neighboring states, and the U.S.
Before and after January, 2005, New York minimum wage change
Employment (000s)
First half of 2004 First half of 2005
New York State
All non-farm
8,383
8,463
1.0%
849
441
864
453
1.8%
2.7%
14,532
1.2%
1,655
841
1,679
863
1.5%
2.7%
130,518
132,708
1.7%
14,866
8,741
14,998
8,993
0.9%
2.9%
Retail trade
Food service
Four neighboring states (NJ, PA, MA, CT)
All non-farm
14,365
Retail trade
Food service
United States
All non-farm
Change
Retail trade
Food service
Note: Retail trade and food services are the largest employers of minimum-wage workers.
Source: Bureau of Labor Statistics