There is no question that Upstate metropolitan areas have their problems. Once among the most dynamic and forward-thinking areas of the United States, the region has been living off the former prosperity generated by older companies, a prosperity that is passing away with those companies due to economic change. Employment has been kept steady by the growth of government and government-dependent sectors such as health care, and low-paid retail and services. The average private sector worker in the Upstate metro counties (Albany, Broome, Dutchess, Erie, Monroe, Niagara, Oneida, Onondaga, Orange, Rensselaer, Saratoga, and Schenectady) earned 11.4% less than the average for the United States in 2007. In the post-air conditioning “Sunbelt” era, an era ironically abated by Syracuse-based air conditioner maker Carrier (who even needs air conditioning up there?), the beautiful lakes and trees and abundance water of our northern interior states have been thought by millions of Americans to be less desirable than warmer, southern states that get more sunshine and less snow. So to be fair, I’ve compared the local government employment and payroll of the Upstate Metro counties with several other older, urbanized, cold-weather manufacturing-based counties across the country — Allegheny (Pittsburgh), Cuyahoga (Cleveland), Franklin (Columbus OH), Wayne (Detroit), Milwaukee and Hennepin (Minneapolis). In 2007, all had far fewer local government employees per 100,000 residents than the Upstate NY metro counties, with the exception of…
Cuyahoga (Cleveland), which had 5,200 full time equivalent local government workers per 100,000 residents, compared with 4,682 in the Upstate NY metro counties and 4,044 for the U.S. as a whole. All of the other counties analyzed, among the counties with the most total jobs (public and private) in the U.S., had between 3,500 and 4,000 local government employees per 100,000 people, and were at or below the U.S. average. I excluded Cook County (Chicago) from the analysis, because its scale and prosperity separate it from places like Rochester and Syracuse by too wide a margin. The Minneapolis-St. Paul metro area is also more prosperous than the Rustbelt average; Detroit has been in the past, but all bets are off on the future.
One wonders how the Upstate NY metro counties can afford all those local government workers. After all, the average level of private sector pay is lower there than in any of the other counties cited. Part of the answer is that Upstate NY has relatively high state and local taxes as a share of the income of local residents — though lower than in NYC, the Downstate Suburbs, or even the more rural counties Upstate. And part of the answer is money transferred from that city full of parasitic freeloaders, in the Upstate mindset that has gotten Upstate politicians elected for decades, which is the city I live in. Two of the categories where the Upstate metro counties employ far more local government workers than the U.S. average — public education and highways — have one thing in common, extensive NY state funding. Having the support of resources transferred from a (perhaps formerly) rich and dynamic region (while still being able to look down at its residents) is a luxury the Pittsburghs and Clevelands of the world do not have.
The Upstate NY metro counties had 1,826 full time equivalent public school instructional employees per 100,000 residents in March 2007, compared with 1,559 in the entire U.S., 1,348 in Allegheny County PA, 1,308 in Cuyahoga County, 1,472 in Franklin County OH, 1,112 in Wayne County, 1,349 in Milwaukee County, and 1,184 in Hennepin County. Note that all the other rustbelt counties are below the national average, as their stagnant populations provide fewer schoolchildren as a share of the population total than in high-growth metros. The Upstate NY metro counties had 930 full time equivalent public school non-instructional employees per 100,000 residents in March 2007, compared with 689 in the entire U.S., 549 in Allegheny County PA, 731 in Cuyahoga County, 630 in Franklin County OH, 789 in Wayne County, 536 in Milwaukee County, and 595 in Hennepin County. Public school employment in the portion of New York State outside New York City has been soaring for nearly 20 years, leading to constant demand for more education resources to be shifted away from New York City’s poor children to pay for it.
Upstate’s teachers earned 16.3% more than the national average, while its private sector workers earned 11.4% less than average. This pattern of relatively high teacher pay repeats in most of the rustbelt counties examined, excluding Wayne and Hennepin where private sector pay was above average and teacher pay was above average by about the same amount. Of course a downsizing school system would have a higher payroll per teacher than a growing one, as a result of having relatively fewer lower-paid recent hires. Pension and other retiree health care costs are also a crushing burden throughout the rustbelt, one that I believe will lead to extensive municipal bankruptcies. Growing areas can underfund their retiree promises and hide the costs, as long as government accounting rules allow them to do so. (Unfortunately the one thing Mayor Mike Bloomberg did for the future of this city is set aside money for retiree health care in the boom, and he now plans to spend that entire amount of money during his re-election campaign instead. Consider it yet another massive subsidy by future city residents to incumbent politicians.)
The Upstate NY metro counties had 172 full time equivalent local government highways workers per 100,000 residents in March 2007, compared with 100 in the entire U.S., 120 in Allegheny County PA, 107 in Cuyahoga County, 82 in Franklin County OH, 69 in Wayne County, 69 in Milwaukee County, and 135 in Hennepin County. The highway workers in the Upstate counties were also well paid relative to private sector workers there. To be fair, much of the New York State funding for local government road crews comes from gasoline taxes, and since Upstaters drive more than Downstaters, they pay their share of that money. And employment in the private Heavy Construction industry, which includes infrastructure construction and repair, is much lower in the Upstate metro counties than the national average, meaning local government employment may be higher upstate in this category solely because less work is contracted out.
Why is Cuyahoga County so high? It has an extensive public hospital system, public welfare employment, and judiciary employment; in the latter two categories the extra workers may be shifted to the local government rather than state government level due to the way employment is classified in Ohio. It has an extensive transit system, including a subway system, an extensive employment in parks, libraries, and public health. One might also note the local government Electric Power workers there, and therein lies a tale that may, unfortunately, become very relevant to communities throughout the nation, both urban and suburban, in the next few years.
Political types may know Dennis Kucinich as a left-wing member of the federal House of Representatives and highly unsuccessful candidate for President. But your author, who is more interested in state and local government, remembers Kucinich from his formative years, in the dark days of the 1970s, as the Mayor of Cleveland. As the economy and public services collapsed and taxes soared, Kucinich was pressured to sell the municipal electric utility, Muni Light, but he refused, fearing price gouging by a private monopoly. Cleveland became the first city in the country to go bankrupt, but now that a 1970s-like economy is returning, it won’t be the last. Obviously Muni Light was not sold, and although the decline of Cleveland continued unabated, now joined by the suburbs, the entire state of Ohio, the entire Midwest, and in short order the entire United States, Muni Light is one of the few good things the city has going for it. (Kucinich lost his bid for re-election, and not keeping track of this story, I had assumed Muni Light had gone under, but it didn’t).
Something to think about as New York’s elected officials propose selling public assets so they can spend all their future revenues right now, be popular, and bequeath an ever-greater disaster to the children of the damned. Does New York raise tax rates that are already the highest in the country, particularly at the local level? Cut services that are gold plated for some, but barely adequate for others (as in the city’s schools and subway rides)? Or default on debt and pension obligations shifted to us from the past, as Kucinich threatened to do, and oppose special tax deals and exemptions, as he did? Read about the bad old days here and here. Coming to an upstate, and downstate, community near you.