Gov. Cuomo upstate (photo: The Governor's Office)

Governor Cuomo described the Upstate New York economy as suffering from a “bad 50 years “ as he tried to explain why it was hard to stimulate rapid growth in the region’s economy, which has grown far more slowly than the rest of the state and nation (see my prior column: Upstate New York is Home to Heavy Voter Turnout, Major State Investment, and Minimal Job Growth).

Cuomo also said that his administration had changed the trajectory upward. Residents of the state should be concerned about how successful these efforts are: Upstate York has more than a third of the state’s residents and is nearly 50 percent of the vote in gubernatorial elections; the state has enacted intensive programming to uplift that region’s economy, and the state must make major decisions about the allocations of its resources and assets every year and set policy directions.

When I wrote the earlier column, I assumed the governor’s description of Upstate’s economic decline was generally true. But in the course of verifying the accuracy of the 50-year decline claim in order to elaborate on the issue, I learned that it was not true.

The Upstate New York economy only slowed to a crawl in the years after 2000, largely due to the two recessions that occurred between 2000 and 2010. This major slowdown did, of course, occur before Andrew Cuomo became governor in January 2011.  But a detailed look at the history of the state’s economy and employment growth shows that Upstate New York’s employment growth actually outpaced the rest of the state in the 1980s, and continued a moderate climb forward in the 1990s, although both regions grew more slowly than the rest of the nation. Employment grew 20% in each of the two decades across the United States.

New York State Labor Department figures show Upstate employment growing at 17% in the ‘80s, versus 12% Downstate (1). Downstate consists of New York City, Nassau, Suffolk, Westchester, Rockland, and Orange counties (2). Upstate is the remainder of the state.

Governor Cuomo seemingly was expressing a public perception that manufacturing job loss broke the back of the Upstate economy decades ago. Manufacturing job loss has in fact been relentless, in Upstate New York and Downstate New York, and the nation as a whole. In 1979 the United States reached its peak manufacturing employment with 19.5 million jobs. New York’s manufacturing employment history since then, divided between the regions:

In 1979-80, manufacturing jobs were 29% of Upstate New York employment, and 17% Downstate. Manufacturing job losses were seriously affecting employment in New York, but in the 50-year lookback to the late ‘60s and ‘70s, it was New York City’s economy that was in freefall in the early ‘70s. New York City lost 600,000 jobs, including 300,000 manufacturing jobs, from 1969 to 1976 (according to the Federal Reserve Board of New York, quarterly review, summer 1977). But the city economy recovered in 1977 and beyond.

Two recessions, in 1980 and ‘81-’82, hit the steel and auto industries in Western New York hard. The huge Bethlehem Steel plant in Erie County closed in 1982. Erie and Niagara Counties lost 41,000 manufacturing jobs from 1979-85. IBM and Kodak began their manufacturing job declines in the mid-to-late ‘80s and continued through the ‘90s. Despite these cutbacks, the Upstate economy as a whole still continued to expand once the recessions were over and grew by more than 400,000 jobs in the ‘80s.

In the 1990s, both regions saw their employment grow at a pace of about 5% for the decade, including the severe recession of the early ‘90s. In 1990, manufacturing was still 18% of Upstate employment but had fallen to 9% Downstate, meaning Downstate’s transformation to a service-based economy had effectively been completed. After the recession was over, the Downstate area did grow more rapidly, but Upstate employment growth still gained over 200,000 jobs and had 7.4% growth over a seven-year period.

Foreign immigration, especially into New York City, began to make a major difference in population growth in the two regions in the 1990s. According to New York City Planning reports, the city gained 800,000 foreign immigrants in the ‘90s .This gain in the City, where two-thirds of the Downstate population lives, roughly mirrored the 800,000 person growth in population in that decade for the Downstate region. Between 2000 and 2015 the city gained another 340,000 foreign immigrants and Downstate gained another 425,000 persons. Between 1990 and 2016 Downstate gained more than 1.6 million people and more than 14% increase in population. Upstate New York gained only 2% in population. With population growth comes new demand for goods and services and employment gains.

By 2000 manufacturing employment was 14% of employment in Upstate New York and only 6% Downstate. The United States entered another recession in 2001 and employment actually declined for two years, including a loss of 2 million manufacturing jobs. The terrorist attack that destroyed the Twin Towers and killed thousands also had significant effects on employment in New York beyond the impact of the recession.

After the recession ended employment in the Downstate region grew rapidly until 2008. But the growth rates of the two regions differed sharply, with Upstate growing only 1.7% in the five years versus 6.1% in the Downstate region, when the Great Recession hit New York and the nation. New York City’s economy took off after the Recession, but Upstate New York had lost another 145,000 manufacturing jobs in the decade, more than a third of its remaining factory jobs from 2000. By 2010, Upstate New York had fewer jobs than it did in 2000.

The Upstate economy had a very bad ten years, from 2000 to 2010, and the manufacturing and other job losses during this period truly shook the base of the Upstate economy.

Employment

The past column reported that Upstate private sector economic growth from 2010 to 2016 was 5.8%, with slightly faster growth in the bigger metro areas like Albany, Buffalo, and Rochester, but weak-to-no growth in other areas. How and where the state government is allocating its resources and assets will be the subject of the next column, along with a continued look at its economic development policies and overall strategic efforts to leverage meaningful improvement in the Upstate economy.

[Read: Upstate is Home to Heavy Voter Turnout, Major State Investment and Minimal Job Growth]

(1) Older historical employment data contained different employment classification systems, that mixed proprietors and payroll together, among other differences, so the series used for 1980-1990, and for manufacturing from 1979 to 1990, is not comparable to a later 1990 base that uses only payroll employment coming forward from that time.

(2) The New York State Labor Department metro area employment data places Orange County in a Westchester-Rockland-Orange region, so Orange County is counted in Downstate employment.