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Places Left Behind

A Look at Economies of Communities of New York and New Jersey

NEW JERSEY

Atlantic City – The city has seen a rise in population in the surrounding metro area with a long-term decline in the central city. While the surrounding area grew by 1.5 percent annually during the 1980’s and more modestly by 0.7 percent from April 1990 to July 1996, the central city suffered an overall drop of 5.3 percent from 1980 through 1998 (from 40,199 to 38,063). The city relies heavily on tourism and casinos to drive its local economy. As a result, employment is in large part seasonally-based and can fluctuate as much as 20 percent between winter and summer. While the overall economy has improved somewhat along with the national resurgence, with retail and development experiencing some gains, poverty and unemployment rates remain far above national averages. Declining population has impacted the city’s tax and consumer base, hindering recovery efforts.

Camden – Six months ago, the New York Times ran a headline, "Camden, On Life Support" and detailed the long-term severe problems of poor economic performance, lack of jobs and social dislocation facing the city. The City’s economic base has taken further hits from the loss of large and medium sized employers such as RCA and Campbell’s Soup. High property taxes reflect a shrinking tax base and new development is very limited. Retail trade is stagnant, income levels are extremely-low and the population base continues to erode. Nearby Philadelphia enjoys economic comparative advantage in many respects and Camden has found it difficult to successfully attract business and new jobs. Municipal finances are now State-supervised, reflecting low revenues. The housing market contains a large number of physically distressed units.

NEW YORK

Buffalo – Between 1950-98, the population of the city of Buffalo declined by almost fifty percent from 580,132 to an estimated 1998 population of 300,717 persons. The decline of the central city is largely due to a steady erosion of the area's industrial base. Traditionally, the Buffalo-Niagara Falls, New York metropolitan area has been highly dependent upon manufacturing, particularly the automotive and steel industries. At one time, Bethlehem Steel Corporation (in Lackawanna - to the south) employed over 20,000 high-wage union workers. The closing of Bethlehem Steel and other steel plants has had a long-term adverse impact upon the area economy. During the mid-1980's, the financial/banking sector expanded in the central city as a result of bank deregulation. Many local banks including Goldome Bank, Empire Savings Bank, Dime Savings Bank, etc. merged and expanded. By the early 1990's, the crisis in the financial services industry and the effects of the national recession caused several major banks to file bankruptcy. This development precipitated a severe loss of employment in the downtown banking industry. Similar to other northeastern metropolitan areas, Buffalo continues to shift from manufacturing to a service-oriented employment base. However, the local economy has not been able to attract high-technology service employers. Service sector jobs tend to be created in the low-wage occupations. This has resulted in an out-migration of young, well-educated job-seekers.

New York City has seen significant economic expansion and job growth since 1992. However, the pattern of job growth and overall economic prosperity has at times been uneven and there are large parts of the city that remain distressed. Between 1992 and 1998, there was a significant decline in the city’s unemployment rate. Although it dropped from 11 percent, in 1998 it remained at 8 percent. The rate of decline in unemployment during this period was approximately 30 percent – below the regional rate of 35 percent and the national rate of 40 percent. The current 8 percent unemployment rate also compares unfavorably with the national average of only 4.5 percent. In addition, not all communities have shared equally in the city’s economic gains – in 1998, there was actually a net loss in the number of jobs in the Bronx. In addition, the city’s tight housing market is marked by low vacancy rates, which has led to a rise in rents faster than many low- and moderate-income families can afford. Persistent poverty remains a significant problem for many communities.

Utica and Rome – The entire Utica-Rome region has been adversely affected by the closing of Griffiss Air Force Base, which resulted in a loss of jobs, businesses which served military personnel stationed there and associated defense contractors. In 1995, 3,300 military and 1,200 civilian personnel jobs were lost. In addition, Lockheed-Martin, a major defense contractor in the area, closed its Utica plant in 1996, eliminating 1,000 jobs.

Fulton -- The City of Fulton in Oswego County is part of the Syracuse Metro Area. Wages and salaries in the county have declined by 1.8 percent between 1989 and 1997, but have begun to edge up. The central New York region (including Oswego County) is one of two labor market regions in the state that experienced absolute wage declines in the 1990’s. While manufacturing employment n the county fell 17 percent from 1989 to 1998, the county remains significantly dependent on manufacturing jobs - they represent 23 percent of total wages. The population in the labor market region declined by 2.8 percent between 1993 and 1998, predominantly because of movement of jobs to other regions.

Little Falls -- Located in the Mohawk River valley, Little Falls sits astride a traditionally vital trade corridor linking downstate New York to the Great Lakes. The Mohawk River Valley, which flourished during the 19th and early 20th centuries, is today among upstate New York’s most distressed regions. The Mohawk Valley labor market has the lowest non-agricultural wages of all of the state’s regions. Per capita income is $22,000, compared to an upstate average of $26,400. Like much of upstate New York, the region has experienced a drop in manufacturing jobs. Between 1989 and 1998, manufacturing employment fell by 16 percent as regional employers such as General Electric and Chicago Pneumatic closed down their facilities within Herkimer County, while other large employers scaled back operations and reduced full-time staff. The decline in industry eliminated jobs which, on average, were among the highest paying - $29,000 per job as compared to the $25,100 average for the region. The Valley saw the highest population drop of any region in the state, 4.9 percent between 1993 and 1998.

Lockport, New York. As a whole, Lockport’s labor market has performed better than the overall upstate economy (showing growth in real total personal income of 3.6 percent). However, Niagara County has not performed as well as the overall Western New York Labor Market Area. The overall area has lost employment in restaurant and dining establishments due to the loss of Canadian tourist dollars (largely as a result of a weak Canadian dollar). As in other regions of upstate New York, poor job prospects have led to population loss - 2.9 percent in the 1990s.

Content Archived: January 20, 2009

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