Albany, N.Y. – The Public Policy Institute, the research arm of The Business Council of New York State, Inc., today released a report showing the impact of manufacturing jobs in the state and how New York compares to other states across the country.
“Manufacturing continues to provide a significant share of private sector jobs and wages in many areas of New York State, especially upstate, with compensation well above average levels in virtually all parts of the state,” said Ken Pokalsky, Vice President, The Business Council of New York State, Inc.
Even so, the report illustrates that New York is still falling behind the nation in terms of manufacturing employment, especially during the post-recession recovery.
The new report, “Manufacturing by the Numbers,” measures manufacturing impacts and trends in both the New York State and U.S. economy, by focusing on jobs and payroll data.
“The Business Council began in 1914 as a manufacturers association, and manufacturing remains at the core of our membership,” said Heather C. Briccetti, Esq., President and CEO of both The Public Policy Institute and The Business Council of New York State, Inc. “This report should serve as a reminder to Albany that the state’s industrial sector continues to play a vital role in the regional economies of New York, especially upstate. Policy-makers need to evaluate how legislative proposals and regulatory mandates impact this sector, and consider approaches that help retain and grow manufacturing jobs and promote capital investments”
National Trends: Manufacturing employment has been on a steady decline in the U.S. for decades. New York’s manufacturing sector has experienced the same pressures, but the sector’s decline in New York has outpaced national trends. For example, from 2001 to 2017, U.S. manufacturing employment fell by 24.3 percent, while falling by 36.5 percent in New York.
More recently, U.S. manufacturing employment has increased each year since reaching its low point in 2010 following the national recession. At the end of 2017, total U.S. manufacturing employment was at 93 percent of its pre-recession level. However, this job recovery was not spread evenly among the states. Eight states, led by Michigan (+52,000) and Indiana (+9,600), actually had more manufacturing jobs at the end of 2017 than in 2008, prior to the national recession. The recovery in these states was led by, but not limited to, recovery and growth in the auto industry.
Unfortunately, New York (-86,000) is second only to California (-114,800) in its loss of manufacturing jobs when comparing 2017 to pre-recession levels. Other major industrial states, including Pennsylvania, Illinois, Texas and Ohio also have among the largest net losses in manufacturing employment over this period. Proportionately, however, New York’s loss was the greatest among the nation’s ten largest industrial states.
Regional Impacts in New York: Even with these recent trends, manufacturing continues to provide significant economic value to New York, and its regional economies.
In 2017, manufacturing directly accounted for 25 percent or more of all private sector jobs in eight New York counties, at least 20 percent of private sector jobs in 12 counties, and at least 10 percent in 34 counties. These counties tend to be mostly rural, upstate counties that have seen relatively little job growth in other sectors. In comparison, manufacturing represents just 5.9 percent of private sector jobs statewide in New York, and 10.5 percent of jobs in the United States.
At a time when economic development discussions often focus on high-quality, high-paying jobs, data show significant wage benefits from the state’s manufacturing sector as well.
Average wages for manufacturing jobs exceed average wages for private sector, non-manufacturing jobs in every county in New York State except one – New York (Manhattan). This manufacturing wage “bonus” is $30,000 or more in nine counties, $20,000 or more in eighteen counties, and at least $10,000 in forty-seven counties.
Moreover, the manufacturing sector provides more than 30 percent of all private sector wages in 12 New York counties, and more than 20 percent of all private sector wages in twenty-six counties. In these areas of the state, manufacturing remains the most significant component of the local economy.
State Policy Issues: From an economic policy perspective, New York State has a mixed record regarding its manufacturing sector.
Over the past decade, the state has adopted several legislative programs that are directly, if not exclusively, aimed at supporting the state’s manufacturing sector, including “RechargeNY” (a NYPA economic development power program); “single sales factor apportionment,” a method of calculating business taxes that favors businesses with in-state employment and capital; a zero percent net income-based tax rate for manufacturers subject to the state’s corporate franchise tax; a refundable real property tax credits for smaller manufacturers; and others.
At the same time, several of the state’s most significant policy initiatives that add costs and compliance burdens to business have an outsized impact on manufacturers. These include: the imposition of more than $1 billion in energy assessments; a high cost workers’ compensation program; real property taxes that range among the highest in the nation; and others.
These policy actions suggest that, while New York at times recognizes the value of individual manufacturers when they are making investments, adding positions, and announcing innovative new products, the state – and its Executive and legislative decision-makers – do not have a complete appreciation of the role that manufacturing, and manufacturing jobs have on the overall state or the state’s regional economies, and the impact that policy decisions have on this economically valuable sector.
The Public Policy Institute is working on additional reports that will focus on capital investments within and regional economic multiplier effects of the manufacturing sector, as well as similar reports on other key components of the state’s economy.
The Public Policy Institute of New York State, Inc. is a research and educational organization whose purpose is to formulate and promote public policies that will restore New York's economic competitiveness. The Institute accomplishes this mission by conducting timely, in-depth research addressing key state policy issues. Founded in 1981 and affiliated with The Business Council of New York State, Inc., The Institute is a non-partisan, tax-exempt, 501 (c) (3) organization. The Institute depends on the support of corporations, individuals, and foundations for its income, and does not accept any government funding.