High taxes, minimum wage holds upstate economy back, experts say
The Syracuse job market has been mixed recently, with some companies adding and others eliminating jobs in the area. While the national economy is booming, some experts say the outlook is not as good for upstate.
Before it even started, about 150 people were waiting in line at a job fair for defense contractor Lockheed Martin. Fred Manwaring of Port Byron, an electrical technician who works out towards Rochester, is trying to get a job closer to home.
“I heard about Lockheed on the news, figured it was a great opportunity to try to get into a company that really doesn’t hire a lot," Manwaring said. "I found out they’re hiring 200 people, figured I’d give it a shot.”
The company is hiring 100 positions in Syracuse and 100 positions at its Owego site. Systems Engineering Manager Matt Wilkowski said they are expanding their worker base because of new radar programs, upgrades and future work.
“When you take into account people starting to come into retirement age, as well as the contracts we have coming in, that’s what drives the need for the more people,” Wilkowski said.
The employment outlook in Syracuse is not as great in other sectors. Retailer Sam’s Club announced it is closing its Syracuse location, resulting in 150 layoffs. Smaller companies like Mark’s Pizzeria, closed 13 restaurants, mostly in central New York.
Carl Schramm, labor economist and Syracuse University professor said the economic woes of Syracuse are shared across upstate.
“The thing that holds New York growth back is the tax rates," Schramm said. "It’s harder to induce big companies to come to New York because the taxes are so high. My hunch is we’re going to watch more and more small companies collapse because the state has been very aggressive about minimum wages.”
Upstate’s minimum wage increased to $10.40 per hour this year and it is even more for fast food workers. Schramm said that will result in higher unemployment.
"Every time the state establishes a new regulation that the business has to comply with, they're not free," Schramm said. "The cost of complying with regulation is really significant. It's one of the reasons smaller businesses, brand new businesses, entrepreneurs are not starting as many businesses in New York at a per capita basis."
He said Syracuse should be made into a charter city, exempt from lots of existing state laws and obligations.
“It could get to restart itself as a different place with a different economy, and different rules that would make it much easier to do business in that geography,” Schramm said.
He said not much will change if upstate continues on its current path.