Issues Tanks: The Empire State's Evolving Industry

In the 1950s, there were over two million manufacturing jobs in New York—the once hub of American Industry. But as early as 2009, only 25% of those jobs still existed as technology improved and companies relocated elsewhere.

Today, manufacturing is still one of New York’s largest industries providing one in three payroll dollars in upstate New York, while employing roughly 80,000 people in New York City. That’s according to Robert Ward the Deputy Director of the Nelson A. Rockefeller Institute of Public Policy in Albany.

Ward prepared a study on the state of the manufacturing industry in New York with the help of the Manufacturing Research Institute of New York State (MRI). He said that despite long continual stagnation in some parts of the manufacturing industry, high-tech sectors like electronics and computers are still growing.

“It’s a much more complex picture than we’re sometimes given to understand when people talk about a post industrial society,” said Ward.  He explained that many of today’s manufacturing companies are relatively small and highly specialized.

Historically, New York State was the national leader in manufacturing with the opening of the Erie Canal, Westward expansion, and both World Wars. But with the increasing global economy, many countries like China and Japan have surpassed U.S. manufacturing, making goods more efficiently and at lower costs.

Ward argues that New York--and the rest of the country--need to take action if they want to stay competitive in the global market.

“We need business leaders, workers, and an education system, that all unite to produce a continual process of innovation, a continual process of looking at how we can do things better and how we can make things better.”

He is not the only one who believes American Manufacturing needs a wake-up call.

U.S. Senator Kirsten Gillibrand of New York has made it one of her top priorities to bring manufacturing jobs back to America. Earlier this month she announced a “Made in America” competitive federal grant program that would provide new resources and tax breaks to small and medium sized manufacturers who invest in communities with high unemployment.

To qualify, states and local governments must have experienced a “seasonally adjusted unemployment rate of at least 10-percent for any six consecutive months from January 1, 2003 through December 31, 2010, or have experienced a cumulative decline in employment in manufacturing of 15-percent or more during that time period.”

The manufacturing companies must also specialize in high-tech and clean energy—which is good news for New York, as its high-tech industry has recently improved.

Computer and electronic manufacturing industries in New York increased their employment by nine percent from 2004 to 2008. Its jobs in information and communications technology have also increased with salaries averaging around $70,000.

While Ward does not believe tax breaks are incentive enough to create innovation and jobs, he does agree that manufacturing jobs should be protected.

“[Manufacturing] provides good pay checks for people who don’t necessarily have college degrees,” said  Ward.  ”Many skills that are very valuable in a manufacturing setting would not be valuable, necessarily, in other types of sectors.”

But not everyone agrees that manufacturing should be protected by the federal government.

Dr. Merrill Matthews is a resident scholar at the Institute for Policy Innovation, which advocates for fewer regulations and lower taxes. He said there is a reason companies left New York in the first place—too many regulations and high taxes. For him, this grant program will not spur innovation and create jobs in New York and other places blighted with unemployment.

“What you’re doing is taking money away from other tax payers, and other industries to try and encourage what [Gillibrand] thinks are the jobs that ought to be created out there, and that is not the best way to spur economic growth.”

According to Matthews, manufacturing is up in the rest of the country, but certain states like New York are doing terrible because of stricter regulations. He said the best way for Albany to improve its businesses climate is for lawmakers to ask “What do we look like in comparison to other states?”

Matthews argues that companies are looking for long-term understanding of costs, and short term government incentives will not provide stable jobs.

Politics asside, Robert Simpson, the President for the Center State Corporation of Economic Opportunity, takes a more positive stance on the future of the manufacturing industry in the Empire State.

“The economy in upstate New York has been challenged for the better part of several decades and is really influenced by the demographic trends that are happening at the national level,” said Simpson, “I think the reality is, our manufacturing industry in upstate New York, while it has struggled and gone through cycles, is relatively strong. Our manufacturers are performing well, they’re finding new markets, and we’re hopeful that though global competition and exports, our manufacturing industry can grow.”

Copyright 2011 WFUV NEWS