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Divided economy

A new report from state Comptroller Thomas DiNapoli confirms what most people already know: New York’s economy actually is two economies—New York City and everywhere else.

Statewide, the comptroller found, New York in 2014 attained its highest level of employment level ever. With the addition of 538,000 jobs since 2009, the state topped 9 million jobs last year. There’s been four straight years of job growth, and the gain in 2014 was 143,000—the best performance since 2000.

Wages, another benchmark of economic health, increased 14 percent statewide from 2009 to 2014, outpacing the 10.3 percent U.S. inflation rate for the same time period.

But the statewide gains in jobs and wages were skewed by numbers from New York City, which has been on a roll. The city’s 2009-14 job growth rate was 11.3 percent; that compares with 2.1 percent in the Finger Lakes region and 1.5 percent in Western New York. Indeed, New York City accounted for three-quarters of new statewide jobs in this period, while four upstate regions lost ground.

The gap was narrower in wage growth, but New York City again led all other regions by a fair margin.

What explains the weakness of upstate employment growth compared with New York City and the national average? That question was outside the scope of the comptroller’s report. But many believe high taxes, runaway spending and excessive red tape are to blame.

At the same time, more than a few employers would tell you they have jobs to fill but struggle to find qualified applicants. A decline in labor-force participation has not helped that situation.

Most likely, both factors have contributed to upstate’s economic malaise and both need to be addressed. For the most immediate impact, though, Albany would do best to focus on what it can control most directly—the high costs of doing business here.

Gov. Andrew Cuomo and state lawmakers could argue they have accomplished a lot to make New York more business-friendly. In some respects that might be true, but clearly more needs to be done.

8/14/15 (c) 2015 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or email rbj@rbj.net.


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