Don't listen to Chris Collins: There are 19,000 fewer jobs in Erie County since 2008

There are almost 25,000 fewer people employed in the Buffalo-Niagara Falls area than there were three years ago. There are more than 19,000 fewer people employed in Erie County than there were in 2008. The unemployment rate in Erie County was 7.7 percent in the summer of 2011, compared to 5.8 percent in the summer of 2008. These are the official statistics from Washington and Albany agencies that track such things. Nobody in their right mind says that the federal Bureau of Labor Statistics or the New York State Department of Labor makes things up.

But on September 16, Erie County Executive Chris Collins issued a press release claiming credit for “creating” thousands of new jobs.

“The local economy continues to grow at a strong pace,” the release states, “as thousands of new jobs have been created under the leadership of Erie County Executive Chris Collins.” The press release includes approving comments from Jonathan Dandes, the head of the business lobbying group the Buffalo Niagara Partnership. “According to the most recent employment report released by the New York State Department of Labor and reported by the Buffalo News, the Buffalo-Niagara region created more than 5,500 jobs in August 2011 alone.”

This is an arresting claim in a region that continues to lose population and that has not recovered the loss of more than 19,000 jobs since the 2008 global financial crisis hit.

There has indeed been an employment uptick from 2010, when July employment figures fell to the lowest level recorded at any time in the past 20 years. It’s great news that there are more people working in Erie County in July 2011 than in July 2010—just as it’s great news that the number of unemployed people in Erie County fell from a spike of 43,300 in January 2010 to 35,800 in July 2011. But there is something weird about a press release from a county politician who took office when there were more than 7,000 fewer unemployed people in his county.

The statisticians aren’t lying about the ongoing problem of anemic economic recovery in this area or in the nation as a whole. Washington says that 24,000 fewer people are working in Erie and Niagara Counties than in 2008, and that in Erie County alone, there are more than 19,000 fewer people working than there were three years ago.

According to the federal Bureau of Labor Statistics, in July 2008, there were 559,786 people working in the Buffalo-Niagara area. In July 2011, there were 535,497 people working in the Buffalo-Niagara area—a loss of 24,289 jobs. Loss of employment, not loss of work force, accounts for the drop in the number of employed persons since July of 2008. The labor force in Erie and Niagara Counties shrunk by about 14,000 from July 2008, when there were 594,286 people available to work, to 580,268 in July 2011. The unemployment rate in July 2008 was 5.8 percent; the unemployment rate in July 2011 was 7.7 percent. In sum, for the two biggest counties in Western New York, there are fewer people in the workforce, and more of the remaining workforce is unemployed than it was three years ago.

In Erie County alone, about 19,000 jobs have disappeared since 2008. The Erie County labor force shrunk by 3,000 people since July 2008 as folks either left the area, died, or just stopped trying. In July 2011, there were more than 35,800 unemployed people in Erie County, and over 9,000 unemployed people in Niagara County. Compare those numbers to July 2008, when there were 27,200 unemployed people in Erie County, and 7,300 unemployed people in Niagara County.

We still have a problem. In 2009, Congress enacted President Barack Obama’s so-called “stimulus” package, which sent more than $74.5 million to Erie County government to help Erie County stabilize public services and to invest in job-creating public works projects. Collins chose instead to plug his budget gaps, stowing most of the Obama money in his reserves, rather than to spend it on increasing employment in Erie County.

Is it fair to say that Collins’s decision not to spend the federal funds as they were intended resulted in greater unemployment, job loss and income decline than might have happened had he acted otherwise? That’s a policy question: There is ample evidence that $74.5 million in extra public funds could have created significant economic activity, i.e., jobs, depending on whether the spending had been directed to infrastructure or construction or direct income-support to individuals. What is not in question is that there are 19,000 fewer people working in Erie County in 2011 than in 2008, when he took office.

Also not in question is that more people here are poorer than they were before Collins took office. In the summer of 2008, there were 104,693 individuals out of the 908,000 people in Erie County who were receiving food stamps, which are only available to people whose incomes are low. In the summer of 2011, there were 143,722 people in Erie County receiving food stamps.

Are we missing something?

Since 2008, more people are poorer in Erie County. More people are unemployed than in 2008. Fewer people are employed in high-wage jobs than in 2008. Income disparity—the gap between rich and poor—is greater than it was.

Barack Obama and the Congress that held office in 2009 enacted various measures to help stabilize the national economy because in the months before Obama was elected, the actions of bankers and speculators had created an economic calamity. In 2008, the global financial crisis was set off when a Wall Street investment firm collapsed due to over-leveraging on junk mortgages. Some of those junk mortgages, according to a lawsuit filed earlier this year, were made by Buffalo’s own M & T Bank, which is accused of defrauding investors by teaming with Goldman Sachs to bundle up those mortgages and sell mortgage-backed securities as low-risk assets rather than as the worthless paper they turned out to be.

Autumn 2008 is when America and the rest of the world plunged into financial and economic crisis. If we take as our baseline July 2008 and track to July 2009 (employment tends to jump in summertime in this area), the numbers show how the Wall Street collapse hit the Buffalo area. In one year, the unemployment rate in Erie County went from 5.6 percent to 8.3 percent. The number of people working Erie County in July 2008 was 452,100; in July 2009, it was 437,800. In July 2010, the second year of the post-collapse recession, 431,900 people were working in Erie County.

Now, in 2011, the July employment figures are up slightly from 2010. There were 432,400 people working in July 2011—more than 1,300 more than in 2010. But compared to 2008, before the Wall Street collapse, Erie County is far, far behind what it was. There has been a tiny increment of recovery since the financial crisis hit—but employment in Erie County is short 19,000 of the jobs it had just three years ago.

Call it cynicism. Call it mendacity. Call it a cognitive disconnect, but don’t use such words in public lest you be regarded as Professor Obama’s wealthy critics think of him today—not as the timid and incrementalist protector of the financial class that he is, but as a dangerous socialist because of his occasional posturing against tax favors for the investor class. Here in Western New York, which has proved over and over again to be a national bellwether, the electorate that just endorsed Kathy Hochul because she endorsed taxing millionaires at higher rates than secretaries, and honoring the social contract with working people, is being told that the economy is growing, that jobs are back, that the industrial development agencies are doing a great job with public subsidies, and that night is in fact day.

The question for the electorate here now is whether the politics of the emperor’s new clothes will prove more convincing than a 43 percent increase in the number of food stamps recipients. Fantasy sells big among kids raised on Harry Potter and video games. Will it trump the adult experiences of unemployment and income loss?

Bruce Fisher is visiting professor of economics and finance at Buffalo State College, where he directs the Center for Economic and Policy Studies.