After Gov. Cuomo banned fracking in New York in December, he promised residents in the state’s Southern Tier that he would provide them with new government investments to jumpstart economic activity in their depressed region, including millions of dollars to attract “clean energy businesses and jobs.”
But already, according to upstate press reports, Cuomo’s modest initiatives have stalled. This week, CapitalNewYork.com reported that the state cut in half the money it will devote to luring new energy companies to counties that border Pennsylvania west of the Catskills.
At the same time, businesses in the region’s wood-products industry — another area the state promised to help jumpstart — said they’ve yet to meet with anyone from New York government about public investments in the region.
The slow start to the Southern Tier revival plan follows on the heels of news last month about the underwhelming launch of the much-hyped Start-Up NY plan to boost the state’s economy through small tax-free zones around college campuses.
In its first year, the program, backed by a whopping $47 million advertising budget, created just 76 new jobs.
None of this should be a shock to New Yorkers, because government has a lousy record of picking winners — especially around here.
The state and federal governments have poured billions of dollars of economic-development money into depressed upstate areas over the decades, with little impact.
Indeed, back in 2004 the Buffalo News estimated that its city had garnered more government-redevelopment aid per capita than any city in the nation since the 1970s but had virtually nothing to show for it and remained one of America’s poorest places.
Gov. Cuomo added another billion dollars in 2012 to Buffalo.
Upstate residents, especially in the Southern Tier — places like Broome, Chautauqua, Chemung and Tioga counties — can be excused if they feel frustrated by government’s ineffective response.
While energy deposits from the Marcellus Shale sit locked underground in New York counties that yearn for prosperity, thousands of wells are pumping out oil and gas from the same energy field in Pennsylvania.
Call it a tale of two economies.
In New York, every one of the six core counties along the Southern Tier has fewer jobs today than at the start of the 21st century, according to the Bureau of Labor Statistics’ county employment and wage database.
Broome County has lost about 11,000 private-sector jobs, about 13 percent of its total, in that time. Chautauqua has seen about 4,300 jobs, or 9 percent of its total, evaporate during that period.
When jobs disappear, wages stagnate. That’s also true in the Southern Tier, where those who have jobs struggle to stay ahead of the game.
In Allegany County, the average annual private-sector wage has jumped 31 percent to $33,667 during this era of job loss. Sound impressive? Not really. Those gains are below the rate of inflation, meaning workers have lost buying power.
In Broome, the average wage has increased by 26 percent, again not keeping pace with rising prices.
Contrast this with the three core counties in Pennsylvania that have the bulk of Marcellus Shale wells along the border — Tioga, Bradford and Susquehanna. Every one of them has more jobs today than back at the start of the new century, and wages have risen robustly.
In Susquehanna, the average private-sector wage rose from a mere $20,476 before the fracking boom began to $36,989 last year.
That’s a startling 37 percent premium over the pace of inflation. In Tioga the average private-sector wage is up 58 percent to nearly $36,000 since the turn of our century — giving workers real salary gains.
Nor is Marcellus the only source of local energy riches. The Utica Shale has similarly generated widespread investment in several thousand wells in Pennsylvania counties west of Marcellus. And Utica also stretches into New York state.
What’s happening in New York, where the government’s predictable efforts at state-sponsored capitalism produce underwhelming results, contrasts sharply with what we see in Pennsylvania.
It also reminds us that government is best at economic development when it gets out of the way and lets the private sector perform, as it has done in the Keystone State.
Steve Malanga is a senior fellow at the Manhattan Institute.