New York’s Suffolk County Economy: Not so Hot?

Representative Lee Zeldin likes to claim that he has contributed to a “booming” economy resulting in jobs in his district (the eastern part of Suffolk county).

Lets examine this for a minute.

First, jobs

umemployment graph

This is the graph of unemployment since the housing crisis (the last major recession) in 2008.  While unemployment came down from 10% to just under 5% under Obama, it went to just under 4% under Trump.  5/6 of the recovery (83%), as measured by reduced unemployment, occurred during the Obama years and 1/6  (17%) of the recovery occurred under Trump.

Similar numbers apply to Suffolk county.  But what is the job growth in Suffolk county,  compared to the rest of the state of New York?  Well, it is nothing to brag about.  For instance, job growth between Dec 2016 and Dec 2017 on Long Island (Nassau & Suffolk) was 12,500 jobs representing 0.9% job growth.  Compared to the rest of the state or to NY City those are measly results: For NY State there were 156,800 new jobs representing 1.6% job growth over the same time period.  And if you assess job growth for the period of Dec 2014 through Dec 2017 (the period that Zeldin has been in office), it is 0.934 %.  By comparison job growth during the prior 4 years (when Tim Bishop was in office), was 1.425% (Suffolk county total employment numbers).

If job growth had been average on Long Island (equal to the NY State average), we would have had 22,220 new jobs between Dec 2016 and Dec 2017, not 12,500.  The shortfall: 22,220 minus 12,500 = 9,720 jobs are in fact jobs we could have had, if we had just “average” job growth.  Those are 9,720 jobs we lost.

Second, taxes.

Voters are not stupid. The republican tax cuts benefited primarily businesses and the super rich.  The average person in Suffolk county might see a difference in either direction by a few hundred dollars for their federal taxes. The big issue, however, is SALT (State and Local Tax) deductions.  These are now no longer fully deductible.  And we won’t see the effects until 2019.  Here is a simple calculation.  If my NY State taxes are 10,000 and my local taxes (realestate/school taxes) about 15,000, for a total of 25,000 SALT deductions, I can still deduct 10,000, according to the new Republican tax plan, so I will have to pay taxes on the remaining 15,000.  At a tax rate of 30% that is about $5000 additional taxes.  Our taxes in Suffolk county will therefore rise substantially, specially in communities in Western Suffolk where real estate taxes are high.  Zeldin tried to weasel out of this, but in the end he supported the Rep. tax bill and did not fight for his constituents. Amazing that he is now listing the new tax law as one of his achievements!  Thanks Lee!

Third: Wages

According to the U.S. Bureau of Labor Statistics’ most recent data, average weekly wages in Suffolk and Nassau are close to the national average of $1,109 per week: Suffolk $1,217, Nassau $1,242.  But importantly wages have been stagnant and not growing. Slow wage growth indicates that the U.S. economy has not yet fully recovered.

This graph shows lagging employee pay since 2010 while corporate profits are soaring!

Screen Shot 2018-09-06 at 3.39.46 PM

From: “Paychecks Lag as Profits Soar, and Prices Erode Wage Gains” NY Times.

Wage stagnation in Suffolk county is real.  For instance average weekly wages grew by 0.4% between the 2nd quarter of 2016 and 2017.  That compares to 2.3% growth in New York State and 3.2% growth nationally.  Suffolk county was ranked 315th in a national survey of comparable counties. This does not compare well with other NY State counties:

Monroe, N.Y. 92
Bronx, N.Y. 114
Kings, N.Y. 148
Oneida, N.Y. 156
Dutchess, N.Y. 168
Erie, N.Y. 189
Orange, N.Y. 189
Westchester, N.Y. 196
New York, N.Y. 215
Queens, N.Y. 215
Richmond, N.Y. 215
Broome, N.Y. 231
Onondaga, N.Y. 247
Saratoga, N.Y. 282
Albany, N.Y. 310
Suffolk, N.Y. 315
Rockland, N.Y. 336
Nassau, N.Y. 339

Fourth: the stock market

It is astounding that Republicans, like Lee Zeldin, are claiming credit for a soaring stock market.  They will mention the tax give-away to businesses (thus increasing profits), the abolition of regulations and hard-nosed trade wars with allies and others.  A bull run based on borrowed money and a soaring national deficit seems dangerous.  Add the inflation expected from the trade war.  Accordingly, the Warren Buffett Indicator predicts a stock market crash in 2018!  Perhaps Zeldin and company, should also be credited with the crash, when it happens?

The party of “fiscal hawks” has become a joke.  They can not claim to be fiscally conservative or responsible.  The national debt now equals $176,000 for each tax payer in the US.  Watch the dizzying numbers here! We all know what comes next: sanctimonious statements from Rep. lawmakers about how we need to cut Medicare, Medicaid, Social Security! Oy vey.

 

Relevant addenda:

1) my friend writes:

It is infuriating that Trump’s only accomplishment was to inherit a strong economy from Obama.

Cynical Republicans then gave a huge tax cut to the wealthy and a little one to the middle class. All conventional economic theory says that that will provide some fiscal stimulus for the economy through at least 2018, but at the cost of ballooning deficits and the inevitable Republican calls to cut Medicare and Social Security. Why are such simple economic ideas so hard to convey to the public?

2) An interesting piece in the NYT demonstrates how essential wages are.  Jobs per se, paying so little that you can not survive on them, will not solve the problem of poverty.

About D. Posnett MD

Emeritus Prof. of Medicine at Weill Cornell Medical College
This entry was posted in economics, economy, Employment, Labor, long island, Trump, Uncategorized, Zeldin. Bookmark the permalink.

One Response to New York’s Suffolk County Economy: Not so Hot?

  1. John Hooker says:

    These graphs and their significance are an absolute beauty in terms of reality check. Congrats David. This kind of stuff is key to winning! Let’s set the record straight!!!

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