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Outrages & Insights: Anemic job growth belies claims of economic boom

By Jim Heaney

New York State has sunk a lot of taxpayer money – $25 billion by Gov. Andrew M. Cuomo’s estimate – into recharging upstate’s moribund economy.

The return on investment: Anemic job growth that is a quarter of the national average.

This will come as a shock for those who have been taking Cuomo’s proclamations of upstate’s economic resurgence at face value.

“Economic success is shared all across the state,” the governor declared in his 2017 State of the State address in Syracuse. “It’s not just New York City that’s doing well, it’s the entire state.”

Howard Zemsky, the state’s economic development czar, told state legislators earlier this year that “every region has come a long way from what it was” and lauded what he termed “incredible progress.”

Job numbers tell a much different story.

Employment upstate has grown by only 2.7 percent during Cuomo’s tenure – compared with 13.1 percent downstate and 11 percent nationally. If it were a state, upstate’s job growth would rank fourth worst in the nation, below, among others, Mississippi.

What’s more, four of upstate’s 12 major metropolitan areas have actually lost jobs since Cuomo took office. Growth in the others lags behind the national average. So much for claims of a statewide boom.

To top it off, most of the jobs being created under Cuomo are of the low-wage variety. To be precise, 88 percent of the net jobs added upstate during the Cuomo years have been in low-wage sectors, led by restaurants and bars.

Ron Deutsch, executive director of the liberal-leaning Fiscal Policy Institute, summed it up this way: “Poor job creation, poor return on investment.”

Adding insult to injury is how much state and local governments are doling out in the name of economic development.

The value of subsidies awarded by state and local government has grown from $7.9 billion to $8.6 billion since Cuomo took office. And his proposed budget for the coming fiscal year calls for $1.5 billion in future tax credits and $644 million in additional economic development spending, including a down payment on a second phase of the Buffalo Billion.

With so much spending and so little to show for it, you’d think that officials would take a close look at how they’re spending taxpayer money.

Instead, the governor and legislative leaders have steadfastly resisted repeated calls from the state comptroller and watchdog groups to improve transparency and objectively analyze programs to determine what needs fixing and what needs to go.

“There are no real measures to determine if taxpayers are getting their bang for the buck,” said Andrea Miller, a policy analyst with state Comptroller Thomas P. DiNapoli.

The governor and nearly every local politician within earshot will tell you that the state’s billion-dollar investment in Buffalo has paid off, improving both the jobs picture and community psyche. Cuomo has gone so far as to declare the Western New York economy a “national success story.”

The numbers, again, provide a sobering reality check.

Job growth in the Buffalo Niagara region increased 4.7 percent between December 2010, the month before Cuomo took office, and December 2016. That growth rate is less than half the national average and puts us on par with places such as, well, Mississippi.

“A little more than mediocre, fair at best,” is the way E.J. McMahon, research director of the conservative Empire Center for Public Policy, described the Buffalo area’s job growth.

And much like the rest of upstate, the quality of jobs added to the Buffalo-area economy isn’t anything to write home about. Between the middle of 2010 and the same period last year, the region experienced a net gain of nearly 15,000 jobs. Some 11,400 were in lower-wage businesses.

Job growth leaders include “food services and drinking places,” up 5,900 jobs; “social assistance,” up nearly 2,800; and “retail trade,” up 2,600.

At the same time, Western New York lost more than 9,300 government jobs.

You have to go back to Gov. George E. Pataki’s tenure, from 1994 to 2000, to find another six years of sustained economic growth uninterrupted by recession. Job growth statewide, and downstate, was similar under each governor.

But, despite Cuomo’s focus on upstate, job growth there was around twice as high under Pataki as during his tenure, 6.6 percent compared with 2.7 percent.

I don’t pin all of upstate’s continued woes on Cuomo. Although he would like voters to believe otherwise, there is only so much a governor, or state government, can do.

“The dynamics of the state economy are driven primarily by market forces, not government,” said George Palumbo, professor of economics and finance at Canisius College.

The reality is that upstate is saddled with the legacy of a hollowed-out manufacturing base and an aging, shrinking population – 41 of 50 counties north of the Lower Hudson Valley have lost population this decade.

This is not on Cuomo.

But the governor and the compliant Legislature can be faulted on another front: state policy.

Cuomo has championed, and legislators have approved, several major economic development programs that failed miserably. Their approach has led to programs and policies that attempt to attract businesses with the promise of free money – We’ll build your facilities and waive your taxes! – that effectively shift the tax burden to residents and businesses already footing a supersized bill.

“The policies Cuomo says are focused on upstate and he claims have improved upstate were not the right policies and have not worked,” said McMahon.

The question now is whether Cuomo and the Legislature will continue to throw good money after bad.

Jim Heaney is editor of Investigative Post, a nonprofit investigative reporting center based in Buffalo.

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