The Surprise Economy: Why Has NY Been Outperforming the Nation?

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AUGUST 31, 2011

AUTHOR
Rockefeller Institute

 

Introduction

New York State’s economic performance has lagged the nation’s for decades — for so long, in fact, that New Yorkers have come to think this is somehow our natural condition. But here’s a surprising fact, one that’s gone almost completely unnoticed: The Empire State has been doing better than the nation overall, as the U.S. economy slowly, painfully tries to escape the grip of the Great Recession.

In fact, we’ve had four straight years — 2007 through 2010 — during which employment trends in New York were consistently better than the national average. The result: The state has 343,000 more jobs today than it would have had, if it had declined and “recovered” at the national pace.

For decades, we’ve asked ourselves two central questions about this state’s economy: Why does New York lag so far behind the rest of the nation in creating jobs? And what can we do to turn things around?

But the man-bites-dog story of New York’s performance before, during, and after the last recession suggests two new questions: Is it possible to explain why New York has done better? And, if so, will those insights help policymakers shape a successful strategy for job growth in the future?

Highlights
  • New York State’s private sector employment performance has been better than that of the nation for four consecutive years, as measured by annual gains or losses in 2007 through 2010. This is the most sustained period in which New York has outperformed the nation at least since the Great Depression.
  • New York enjoys an estimated 343,000 more jobs than it would have, if its private-sector employment gains and losses had matched the U.S. average over the past four years.
  • New York City was the only area of the state to gain jobs, but every region outperformed the nation, during the period.
  • The collapse of housing markets in many other areas of the country explains part of the difference in employment patterns between the Empire State and the nation as a whole. At the same time, New York’s comparatively slow population growth has continued to act as a drag on job creation.
  • Despite its better-than-average performance in recent years, New York State lost 90,000 jobs over the four years ending in 2010.

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