Unemployment rates are often viewed as an indicator of how the economy is doing. While these rates provide valuable insight on economic activity, because of how the unemployment rates are calculated, they should not be the sole assessment in determining the health of the economy. The current unemployment rate in New York state is 4.9 percent.
From a statewide perspective, this is good because it shows a measure of economic growth since the recession when the rate was almost 9 percent. Unfortunately, upon closer inspection, the reduction in unemployment rates are mainly attributed to gains being made in the downstate and NYC region, not in Upstate. This prompts the real question: why is Upstate New York lagging behind economically and in unemployment rates?
Recently, the state comptroller examined the issue of unemployment in New York state in the report, “Labor Force Trends in New York State.” The report takes a close look at the unemployment rates and makes comparisons among regions and analyzes other workforce data. Interestingly, the report affirmed some of the very same beliefs that I and many of my colleagues in the legislature have been saying — despite some gains, the Upstate New York economy is struggling.
The report found that all 10 regions of the state saw a drop in unemployment rate; however, the comptroller’s office points out that these numbers are somewhat misleading. The Comptroller found that the reduction wasn’t because more people have jobs, rather, there are fewer people in these regions looking for jobs. While that may sound like the same thing, it is not.
The U.S. Bureau of Labor Statistics measures the unemployment rate each month and looks at data for each region and county. The unemployment rate only represents the number of people who have tried to find work within the last four weeks but have been unsuccessful. In other words, the rate does not account for the people who have stopped looking for work or have actually moved out of the area or the state.
If these statistics included these populations, the unemployment rate would be much higher. Also, while the unemployment rates have improved, from 2011 to 2016, in Upstate New York, the overall number of jobs has declined. Statewide, the labor force rose only by .7 percent during the same time period, compared to a national increase of 3.6 percent.
Population loss is a contributing factor. Only 16 of New York’s 62 counties have gained population since 2010. With a few exceptions, most gains were recorded downstate. In 2014, New York lost its ranking as the third most populous state in the U.S. to Florida. Locally, Oswego County lost 2.6 percent of its population from 2010 to 2016. During that same six-year span, Onondaga County lost 0.2 percent and Jefferson County lost 1.9 percent.
This population loss puts added strain on local governments that are tasked with providing virtually the same level of services with fewer residents. This only adds to the taxpayer burden and makes the whole state less appealing to prospective or existing residents. A loss in population also has political consequences. Following the 2010 census, New York lost two congressional districts due to population decline. Federal and state funding is tied to population so this outward migration affects not only the labor force but also government aid.
The comptroller’s report confirms once again that New York needs to focus its policies and legislation on being friendlier to businesses by reducing the regulatory and tax burdens. Small businesses and manufacturers are the backbone of a strong economy. Creating a welcoming business environment would eventually add to the tax base and create jobs. This, in turn, would reduce unemployment.
While the employment numbers look bleak, there is hope. We have great schools, an abundance of natural resources, comparatively low crime rates and caring communities. By enacting policies that spur the economy rather than hinder it, Albany could accelerate economic growth and create more jobs.
If you have any questions or comments regarding this or any other state issue, please contact me. My office can be reached by mail at 200 N. Second St., Fulton, New York 13069, by email at [email protected], or by calling (315) 598-5185. ou also can friend me, Assemblyman Barclay, on Facebook.
