The Exodus of Young Adults and Businesses From Upstate New York - WHY?
July 23, 2006
It is shocking but true, upstate New York has experienced an accelerating exodus of young adults. From 1990 to the present, the number of 25-to-34-year -old residents in upstate New York has sharply decreased. In fact, in the 13 western counties which include Chautauqua, Cattaraugus and Erie counties, the population of young adults has decreased by more than 30 percent. This migration is turning many communities grayer, threatening the long-term viability of cities and communities, and raising concerns about the area's future cultural vibrancy and economic tax base. Clearly, western New York and the State as a whole have problems and fixing these problems must be placed front and center, and soon!
Upstate New York is most fortunate in that we have many energetic, innovative and eager small business entrepreneurs. We have an excellent work force, creative small companies, outstanding universities, most excellent natural resources, an adequate transportation infrastructure, and safe communities. These are all desirable elements for thriving economic development and growth. We have all the desirable ingredients. So, where and what is the problem and how do we fix it?
The key to any economy, and certainly this is true in upstate New York, is private sector manufacturing and business. In fact, in upstate New York, one in two jobs depend directly or indirectly upon private industry, business and manufacturing. It is true, the Empire State has its share of truly exciting growth stories, including the mix of industries known as "high tech" as well as sectors such as automobile accessories. Unfortunately, the overall cost of doing business in New York is the second-highest in the entire nation. Fueling this, are New York State taxes which are the nation's highest. This burden drives jobs to other states and hurts both employers and working families. New York State businesses pay one of every three dollars collected in taxes in the State. Further, the average cost of workers compensation in New York is the second highest in the fifty states. Add to this, employees' benefits, such as health insurance, leave time and over-time agreements along with unemployment insurance costs which, by the way, cost more in New York State than in most any other state in the Union.
The time must come when we entrust our support to the individuals who pledge to restore competitiveness in our State and renew the foundations of free enterprise. It should be no surprise that with mobile capital and labor which can easily transport itself nationally or even globally we must have a sound test for competitiveness before we pass any legislation or pass any budget. These are discouraging factors to any business entrepreneur looking for a home in western New York. Take for example: the steadily increasing cost of heath insurance is driven to a significant extent by Albany's hidden taxes on health care. Employers trying to buy health insurance for their employees are faced with a heavy surcharge that Albany tacked on to appeased New York City's hospital union leadership. This is appalling.
Unfortunately, manufactures and other businesses that consider potential locations across the country for new investment and jobs often express grave concern about New York State's reputation for allegiance to costly "down state" pro-union policies. It is a fact, manufacturers exit first the places with the highest costs: New York is at the top of the list. Consequently, upstate New York lost 182,000 manufacturing jobs during the past ten years--a rate of loss which doubles the national average. Once you lose job growth, you lose people. Parenthetically, it was six years ago that Senatorial "Candidate" Hillary Clinton promised to generate 200,000 new jobs for upstate New York. Since then, this region lost 40,000 jobs. We doubt the public sector could afford another 200,000 if that was her intention. So much for campaign rhetoric.
And then to multiply the problem, there have been government added taxpayer funded jobs resulting in costly bigger state government. Albany is aware of up -state's economic problems but its answer has been to take tax payers money and add more taxpayer -funded jobs. In fact, by and large, nearly all job growth in upstate has been in jobs funded by the taxpayers. And with every new government job, more money is deducted from paychecks for government. This is strangulating the tax payer and the business community. Realistically, the bigger government gets, the harder it is to downsize. And thus, this is the vicious cycle we are now experiencing in upstate New York. The free enterprise system is strangulated and dwarfed and the powerful fruits of the free enterprise system of adding growth to the economy are stagnated. Larry Kudlow, noted economist stated "the free market free enterprise system cannot grow without profits." We agree. "Profit" is an essential criterion to free enterprise as is the essentiality of "free enterprise" to a healthy vibrant economy. In short, creative energetic private enterprise is vital to a healthy growth economy. And that is the sum and substance of what we are losing.
One of the most renowned economic theorists of all time, Frederick A. Hayek said it well, when he stated "Human reason can neither predict nor deliberately shape its own future. Its advances consist in finding out where it has been wrong." And somewhere in the answer to what is wrong, one may find some solutions, such as: downsizing government, cutting taxes, decreasing taxpayer funded jobs, lower spending, and reducing the number of public supported entitlements. A place to start is to bring into balance the equality of influence of upstate legislators with their powerful downstate influential counterparts. We submit herein lies the rock hard truths of the exodus of our young adults and the migration of business from this region all of which contribute to the decline and struggles of the economic condition in upstate New York. That is how we see it FROM OUR PERSPECTIVE.