Has New York recovered from the Recession? Depends on your ZIP code.
Has New York recovered from the Recession? Depends on your ZIP code.
Throughout the presidential primary campaign, voter supporting both Donald Trump and Bernie Sanders have identified the lackluster recovery from the Great Recession as one of their top concerns. With the New York state presidential primary just weeks away, no doubt that issue will have traction here as well.
So, just how well is New York’s economy doing? Which New York? While New York City continues to attract billions of dollars in overseas real estate investment and Wall Street prospers, upstate cities are still reeling from globalization and the exit of tens of thousands of manufacturing jobs.
“It's a tale of two different states,” state Comptroller Tom DiNapoli told City & State. “We have seen overall growth in sales tax revenue, but in 30 of the 57 counties outside of New York City sales tax revenue was actually down for 2015. It was New York City that saw most of the growth in sales tax revenue.”
Indeed, relying on aggregate economic data to assess the economy’s health can present a rosier picture than what voters are actually experiencing on Main Street.
“We are finding the national economic numbers mask the facts on the ground on the 3,069 counties that we look at because that’s where people actually live,” said Emilia Istrate, the director of research for the National Association of Counties. “Nobody lives in the aggregate.”
Main Street is not the abstract aggregate
The National Association of Counties uses four criteria to determine the degree to which a county economy has recovered: annual change in the unemployment rate, post-recession job creation, a county’s gross domestic product, and median home price. So far, several years since the recovery kicked in, and only 214 of all of the nation’s counties – or just 7 percent – have rebounded on all four fronts.
Drilling down on New York’s county data, Istrate said that only New York City has made up for what it lost in terms of jobs during the Great Recession. “Meanwhile, in 24 of New York’s counties between 2009 and 2014, we actually saw wages decline while productivity went up,” she said.
According to the NACO data, eight of New York’s counties – Chautauqua, Clinton, Delaware, Fulton, Rockland, Schoharie, Sullivan and Tioga – have not seen a rebound on any four of the recovery indicators. Another 35 counties in only meet one of the thresholds, while 14 were batting 50 percent. Including New York City, no county in New York achieved recovery on all four parameters.
What’s clear from the data is that the Great Recession did more damage to local economies than is often reported by the national business press, which focuses heavily on the stock market and aggregate statistics like the national unemployment rate and job growth.
As Istrate sees it, each county has its own economic narrative – many of them with more structural challenges. “Some counties may have already been in decline well before the national recession,” she said.
In the Empire State, immigration part of the economic equation
One trend that factors into the well-being of New York’s Main Street economy is another hot-button 2016 campaign issue: immigration.
Historically, immigrants have made the Empire State a top destination. Demographers tell us that New York, California, Florida and Texas account for half of the 11 million unauthorized residents who now call the U.S. home. For New York, a state which has seen its congressional delegation shrink from 45 in the 1940s to just 27 today, the sustained wave of newcomers creates a dynamic mix of opportunities and challenges for the state's politics and economy.
According to the Migration Policy Institute, the number of both undocumented and legal immigrants that call New York home went from 2.8 millionin 1990 to 4.65 millionin 2014. No one knows precisely what percentage of those new arrivals are undocumented, but national statistics suggest that close to half of the nation’s foreign born have gone on to become U.S. citizens, while the rest are either here illegally or by virtue of being granted legal residential status.
A 2009 Pew Hispanic Center study found that one third of the children of the undocumented living in the U.S. are below the poverty line, while one fifth of the adult immigrants without legal status fall into that category.
In addition to a poverty rate that is roughly twice that of the rest of the nation, the undocumented are handicapped by a significant educational deficit. Pew reports that nearly half of the undocumented between the ages of 25 to 64 have not graduated high school, compared to just 8 percent for the U.S. population.
Immigrants have also come to account for an increasing portion of the children living in low-income households in New York, according to the Migration Policy Institute. In 1990 they comprised 28 percent of children in low-income households, but by 2014 they made up 43.3 percent of the 1.7 million children in New York who are living in challenging economic circumstances.
Poverty trends from one Cuomo to the next
The wave of immigration is only part of the 25-year arc of New York's economic erosion. In City & State’s county-by-county analysis of U.S. Census poverty data, it is apparent that, in addition to the traditional pockets of poverty in upstate cities and places like the Bronx, suburban and rural communities are also grappling with rising poverty and a greater demand on social services.
In the years since the late Mario Cuomo was governor, 58 of the state’s 62 counties have seen a rise in the percentage of adults in poverty. Fifty-nine counties also saw a jump in the percentage of children living in poverty.
In the aggregate, the state’s adult poverty rate went from 13 percent in 1989 to 16 percent in 2014, the year with the most recent data available. Childhood poverty rose from 18.8 percent to 22.9 percent over the same 25-year span. In some neighborhoods, childhood poverty approaches the 50 percent mark.
The only three counties to post a decline in both childhood and adult poverty rates were Essex County, Manhattan and Brooklyn. In both Essex and Brooklyn the decline was negligible, dropping less than a full percentage point over 25 years.
Manhattan’s poverty percentage dropped from 20.5 percent in 1989 to 11.7 percent in 2014. The borough’s incidence of childhood poverty declined even more dramatically, from 35.9 percent in 1989 to 23.5 percent in 2014.
But the improvement in Manhattan is not a reason to celebrate, according to one expert.
“That Manhattan poverty decline was the result of people being forced out by high rents,” said James Parrott, the chief economist with the Fiscal Policy Institute. “One of the things we have been looking at is the sky-high incidence of childhood poverty we are seeing in places like Syracuse, Rochester and Buffalo, where in some places it is above 50 percent.”
Poverty spikes in Rockland as locals confront a daunting challenge
In Rockland County, historically an upscale commuting hub for New York City, just 6.4 percent of residents were living below the poverty line in 1989. By 2014 that figure had more than doubled to 14.7 percent. The spike in childhood poverty in the county was even more dramatic, going from 9.7 percent in 1989 to 25.5 percent in 2014.
According to the United Way of Rockland County’s 2012 Community Needs Assessment Report, rising poverty has coincided with a significant increase in immigrants who don’t speak English but are fluent in Spanish, Yiddish, French Creole, Italian or Hebrew.
“In 2009, 22 percent of Rockland County’s population was foreign born with more than 50 percent entering the U.S. since 1990, and 26 percent since 2000,” according to the report. The analysis also found a significant increase in the percentage of residents under 18 years old, as well as a higher percentage of the population composed of people of color.
A major problem in the county is housing affordability, according to Mimi Vilord, the executive director of the United Way of Rockland County. “I have seen one home with five families living in it, one family in the den, another in the dining room and so on,” she told City & State. “It’s tragic.”
Vilord said social service agencies are also seeing an increase in the ranks of the “working poor.” “The child care workers” and other people in low paying service jobs “are all living paycheck to paycheck,” she said.
Demand is growing for the kind of services the United Way supports through grants to local agencies, even as donations are harder to come by. “Most United Way chapters get their money thanks to the support of work place campaigns,” Vilord said, “so when you lose big employers like Pfizer and Novartis that’s going to hurt.”
With both public and private-sector funding for poverty fighting tight, Vilord said her board has to be selective. “Everything we fund at this point has to have a skill enhancement component to help someone get out of poverty,” she said. “So if a food pantry comes to us for funding, they are only going to get it if, in addition to providing food, they offer something like English as a second language which will help people lift themselves out of poverty.”
The view from Albany
Reg Foster, president and CEO of the United Way of New York State, says federal poverty statistics fail to capture the widespread economic hardship throughout the state. “There are a large number of people above the poverty line, not eligible for federal aid, but well below what they need to cover their basic needs,” he told City & State.
This fall the United Way of New York will release results from a statewide survey of what the organization calls ALICE, Assets Limited Income Constrained Employed households. Unlike dated federal poverty formula, which does not account for spikes in housing and day care costs, the United Way's ALICE survey calculates what it costs locally to get housing, health care, child care, food transportation and taxes.
The United Way has already conducted comprehensive research in a number of states. In neighboring New Jersey, ALICE researchers identified 837,764 households that were above the poverty line but struggling to cover the basics. Including an additional 312,762 families living below the poverty line, some 37 percent of the Garden State’s households were facing economic distress on a weekly basis.
Supporters of Cuomo’s $15 minimum wage, which was incorporated in the state budget Albany just passed, say such a move is the most effective way to move people out of poverty. By some estimates the pay hike, to be phased in over the next few years, would benefit 3.2 million New Yorkers, including 1.1 million immigrants at the lowest end of the wage scale.
But E.J. McMahon, president of the Empire Center for Public Policy, says such a hike will be a job killer in upstate communities where businesses still struggle. McMahon also opposes Cuomo’s reliance on tax breaks to attract new businesses as a way to jump start a stalled economy.
“You shouldn’t have the state trying to pick economic winners and losers with billions in tax subsidies,” McMahon said. “You should be trying to foster a tax and regulatory environment that doesn’t smother the local entrepreneurs that are already here.”
But David R. Jones, president and CEO of the Community Service Society of New York, said that for hundreds of thousands of working New Yorkers, just having a job is not enough.
“An increase in the minimum wage to $15 an hour will particularly benefit these workers and their families,” he said. “Studies have shown that more than one-third of affected workers in the state would come from families below or near poverty.”
Poverty is on Cuomo’s radar. He is calling for the adoption of a United Way-sponsored program, the Rochester-Monroe Anti-Poverty Initiative, as a statewide model. The approach brings together businesses, religious institutions, schools, civic groups and even the poor themselves, all with the collective aim of eliminating poverty.
The $25 million program will direct individual $500,000 planning grants to 10 cities, including Syracuse, Binghamton, Buffalo, Utica, Troy and Albany. The cities will than have the opportunity to compete for grants from a $20 million fund that will have to be matched with private sector foundation funding.
However, some anti-poverty advocates think that the scale of Cuomo’s initiative is too small for the size of the challenge that’s been in the making for decades.
“If half the kids in Rochester, Buffalo, or Syracuse came down with a cold, the Legislature would call the CDC and declare an emergency,” said Ronald Deutsch, executive director of the Fiscal Policy Institute, “but because they are afflicted with poverty, they are ignoring it.”