The Ithaca Economy, Part I: A Tale of Two Recessions

25 05 2015

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Ithaca’s economy has been growing in the past 25 years. Like any market, it’s also had its share of ups and downs – in particular, a recession in the early 1990s and a recession in the late 2000s. Nationally, the early 1990s recession was mild, especially in comparison to the Great Recession of the late 2000s. The 1990s recession only lasted 8 months on a national level (July 1990 – March 1991) and GDP loss was -1.4%. The Great Recession was 18 months (Dec 2007 – Jun 2009) and a GDP loss of -4.3%.

In Ithaca, these recessions played out a little differently.

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According to the Federal Bureau of Labor Statistics (BLS), after a peak employment of 53,100 non-farm jobs in October 1990, the economy sputtered and shrank, falling as low as 47,700 jobs in January 1992, and not surpassing the 53,100 high mark until October 1995. The first half of the decade saw no real growth in jobs numbers.  The Ithaca College Economic Index, which establishes a number based on local economic indices, further highlights the poor 1990s ecnomy. The way the index works is that the index value in January 1985 = 100; 101 means 1% growth since Jan 1985. The county grew at a rapid pace in the late 1980s, and the index was 135.32 in March 1989. But by March 1992, it was 115.75; the economy shrank 14.5%. The index wouldn’t go above 135 again until February 1999. By this measure, Ithaca and Tompkins County had a lost decade.

In contrast, the late 2000s recession had a pre-recession peak of 158.66 in January 2008, fell as low as 149.44 in March 2009, and a new all-time high was established in June 2010. The economy index contracted only 5.8% during the recession, and Ithaca recovered relatively quickly compared to many cities. The jobs total is hardly a blip, an averaged loss of 200 jobs in 2009 that were quickly recovered in 2010’s growth.

So, why the difference? That’s the $64,000 question. An oft-cited reason is that Tompkins County’s institutions of Higher Education are responsible – Cornell, Ithaca College and TC3 were less buffeted by the economic headwaters that made the recession as bad as it was. Cornell published a report in the late 2000s saying that its construction projects alone provided over 700 jobs. Visitors to the university and staying in hotels and eating at local restaurants was claimed to have created almost 800 jobs.

But the colleges were here in the early 1990s as well. And while Cornell eliminated 900 positions during the recession by retirement or layoffs, the job numbers suggest that other employers must have picked up the slack in employment.

One of the ways to try and figure this out would be to look at the breakdown in employment by sector as described by the BLS. Perhaps education didn’t play as much of a role in the 1990s recession, or other industries grew while Cornell’s rank were whittled down in the late 2000s. Part II will be examining the job sector breakdowns and running some calculations to see just what changed in the job totals, and when.


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2 06 2015
The Evolving Plans For West Hill | Ithacating in Cornell Heights

[…] map from the county, the majority of those late ’80s plans were never built, probably because the local economy tanked in the early 1990s. The four housing tracts in the middle of West Hill are still vacant today and under various […]

17 10 2015
News Tidbits 10/17/15: Pressing the Issue | Ithacating in Cornell Heights

[…] in Ithaca isn’t happening “for the sake of development” like in the 1990s, when the local economy was mired in recession. It’s happening because the Ithaca area has added 6,000 jobs in ten years, mostly in […]

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