Bullish on Buffalo: Economic Revival in New York’s Rust Belt
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  • I am usually arguing the other side of the question. I think more precision is necessary here.

    I think if you examine the descriptive statistics issued by the Bureau of Economic Analysis and the Census Bureau, you find the following:

    1. The lower Hudson Valley, the Capital region, Saratoga County, and Jefferson County have seen adequate growth in personal income per capita and are as demographically vigorous as you would want in a long settled area.

    2. The remainder North Country, Central New York, and the Genesee Valley have been holding their own demographically (with slight increases in one county and slight declines in another) for about a generation and now are no longer losing relative ground economically: personal income per capita is keeping pace with changes in national means.

    3. The Mohawk Valley and greater Binghamton may have found their trough, like the areas in category 2. You can see it emerging tentatively in the stats published in the last five years.

    4. The remainder of the Southern Tier and Western New York continues to decline, perhaps at a decelerating pace. Given that things are not looking down in Utica, it would not surprise me to see a mild but real turnaround in Buffalo and Niagara Falls. (In Elmira, I will believe it when it happens).

    Things have been relatively better here in recent years because the labor markets up here have been passably lubricated for some time and because the bankers hereabouts were not fueling any real estate bubble. The rest of the country took a hit we did not. You can see that in the stats, but the economic stabilization of the area was manifest before that.

  • addendum. Tompkins County, where Cornell University is located, is also category 1: in agreeable shape.

  • WigWag

    The Roswell Park Cancer Institute is one of the world’s premier venues for cancer treatment and research. It is located in Buffalo and it conducts extraordinary research efforts looking into the etiology of cancer and new medicines to impact it.

    The University of Rochester and the State University of New York at Buffalo are amongst two of the best medical schools in the United States. I have always wondered why the biotech industry has never flourished in a region in such close proximity to such outstanding institutions. High New York State taxes might be an impediment but New York City has a thriving biotech sector that works in partnership with Medical Schools located within the five boroughs. If anything taxes in New York City are even higher than they are upstate.

    Another world class company located in New York’s Rust Belt is Corning. While many people know Corning for its glass products, it is actually a high tech company that is America’s largest producer of fiber-optic cable. As it happens, Corning also has a thriving life-sciences division, (http://www.corning.com/lifesciences/us_canada/en/index.aspx)

    Upstate New York is thoroughly beautiful but an impediment to its development has always been its harsh winters. Now that winters are becoming increasingly less harsh, I wonder if that part of New York will begin to look attractive to more people.

  • Kenny

    “Upstate New York is thoroughly beautiful but an impediment to its development has always been its harsh winters. ”

    I think the crooks in Albany and NYC are what hurts upstate NY the most. The burden they put on the state are terrific.

  • If the state of New York ever lifts its moratorium on natgas fracking, Buffalo is also ideally located as a terminal for the lucrative LNG export market

  • Jacksonian Libertarian

    I think the Higher Education Bubble popping is going to damage Buffalo’s biggest employers in the near future, and I’m wondering if a Healthcare Bubble isn’t forming. If I’m right and a Healthcare Bubble is forming as well, then both of Buffalo’s driving forces will get whacked in the not too distant future.

  • Cannot say about health care, but the ratio of higher education enrollments to population is only slightly higher than national means in Western New York. It is also quite biased toward the more economical options provided by the community colleges and state campuses. Only about 8% of all enrolled are in private baccalaureate institutions.

  • Tom Gates

    I am trying to help a widow retain the vestige of benefits from bankrupt Eastman Kodak. Should I tell her about the New York success story?

  • No. You should tell her what the results of a cramdown will likely be for her.

    Eastman Kodak once employed 13% of the workforce in the Genesee Valley (and more like 20% around greater Rochester). The company systematically cut its workforce in Rochester by 89% during the years running from 1982 to 2010. Kodak Park is a ghost town. The re-organization (and possible liquidation) of Kodak would have been cataclysmic a generation ago. Now, not so much. The effect on Kodak pensioners may be the most salient component.

    The ‘success story’ here is that the area’s principal employer left town but that the area has held its own demographically and has been able to come to a stable point in its relative economic position.

  • dr kill

    What Jacksonian Libertarian said.

  • Mick The Reactionary

    @Mead

    “The University of Rochester is the biggest [employer], with an economic impact of $143m in sales tax, income tax and property taxes. Five of the top ten private-sector employers in the Finger Lakes region, where Rochester lies, are in higher education and health care.

    Higher education is also a big employer in Buffalo; the University at Buffalo is the second-biggest employer. ”

    “Private-sector” employers? Universities and Hospitals? As Pelosi would say, Are you serious?

    How long your “Private-sector” entities will last if Fed and NY taxpayers will stop subsidizing them (directly and via Student Grants, Loans, Medicaid)? 3 months?

    Perhaps there is some life in Buffalo independent from Mr Taxpayer generosity.
    But you have not shown it, Mr Mead.

  • Old Gunny

    Agree with Mick The Reactionary. Higher Education and Healthcare are not “private sector”. They are the government.

  • Again, higher education enrollments are not abnormally high in either the Genesee Valley (Rochester, &c.) nor in Western New York (Buffalo, &c.). A fall in demand for higher education services would have roughly the same impact on these regions as it would in a generic metropolitan region. My guess would be that it would have less of an impact because higher education in Buffalo consists of economy option and the principal baccalaureate institution in Rochester is a large engineering school.

  • WigWag

    “My guess would be that it would have less of an impact because higher education in Buffalo consists of economy option and the principal baccalaureate institution in Rochester is a large engineering school.” (Art Deco)

    It is also worth pointing out that the Eastman School of Music (University of Rochester) is considered to be one of the best, if not the best Graduate School of Music in the United States. At the very least, it regularly competes with Julliard in New York City and the Jacobs School of Music at Indiana University as the top rated graduate program for music.

    It is a major New York State gem the importance of which should not be underestimated.

    For more go here,

    http://www.esm.rochester.edu/

  • Enrollment in baccalaureate institutions in the Genesee Valley currently stands at around 45,000. About a third are at the Rochester Institute of Technology. About 2% are enrolled at Eastman.

  • Corlyss

    I don’t believe it. I’ve a friend in Binghamton, an area that ought to be among the first to enjoy the benefits of new policies. He ain’t seein’ it no way.

  • Ed

    I’m not convinced some retail shops, a heart attack center for aging local residents and an expansion of a local university using higher-ed bubble funds constitutes a regional economic renaissance. Why would the Economist magazine do a PR commission for the local Buffalo Elk’s club?

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