An Eye-Opener
Retirees and guests at the November 9 Coffee Session were given a long, hard look at the economic realities in our neck of the woods. Perhaps the biggest jolt in that glimpse was seeing graphically how much our own situation mirrors what’s happening throughout Upstate New York.
Our speaker, Jack Benjamin, president of the Three Rivers Development Corp., used a series of charts that drove home the image of an Upstate – including the Southern Tier and Steuben County – that needs to turn around its economic drivers.
Noting that an area’s standard of living depends on its level of personal income, Benjamin presented findings of a Brookings Institute study indicating a number of economic drivers prevalent pretty much throughout Upstate New York…from Buffalo to Albany…from Watertown to Poughkeepsie.
By nearly all major economic measures Upstate New York in the 1990s lagged the nation and its own performance in the 1980s. For example, after growing 26% in the ’80s, real personal income in the ’90s increased 9% compared to 29% nationwide. Over the past 20 years, manufacturing/distribution jobs declined while jobs in the information sector grew. But information sector jobs in Upstate New York not only pay much less than goods-producing jobs, they pay even less than information jobs nation-wide.
In education, while the Upstate ratio of educational institutions to residents is higher than the national average and 27% higher than downstate, many of the students completing their education leave for higher-paying opportunities elsewhere. A similar picture is painted in our Upstate health care – the fastest-growing sector even though its wages lag the national average.
Population trends Upstate also impact the economy. The largest migration flow into Upstate came from within the state. Moreover, nearly 30% of new Upstate residents in the 1990s were prisoners…an increase that is accompanied by a growth in prison staff as well as inmates’ relatives. The area’s large senior citizen population also grew in the ’90s. In 2000, 14% of our Upstate residents were 65 or older compared to 12% nationwide.
Benjamin reported the Brookings Institute study’s findings that personal income Upstate grew at half the national rate in the ’90s and lagged the nation by 11%. Upstate workers get lower pay than their counterparts nationally. Even the highest-income households earn substantially lower incomes than the national average.
A paradox in the population input is found in the fact that despite slow population growth, nearly a half-million acres of Upstate land was urbanized as more and more people moved into suburban areas. This trend creates increased demands on the area’s infrastructure and adds administrative costs to more and more municipalities. As an aside, Benjamin cited the plight of the area’s cities being hit by the combination of more and more property being owned by not-for-profit entities (education, health care, human services, etc.) which are exempt from property taxation while, at the same time, declining business and manufacturing leads to demolishing or abandoning once-taxable facilities.
The Brookings report notes that while long-term structural changes in the Upstate economy have weakened the region’s economic health, adjustments can be made to ensure economic improvement by leveraging the region’s strengths in higher education, health care and industry. In addition, the problems affiliated with the region’s urban sprawl as it impacts infrastructure issues can be addressed by reforms in fiscal policy, annexation laws and regional planning.
The soon-to-be-completed interstate crossroads in Painted Post will be of major benefit to the area. Linking I-86, I-99 and I-390 will make the Steuben County area very attractive for distribution and warehousing operations and other service businesses. Consolidation of municipal services…an area getting increasing attention locally…is an area that can favorably impact the region’s cost of living picture.
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