BUFFALO’S BUSINESS
David Robinson: Suddenly, recession really hits
Indera Mims knew it was getting harder and harder to find a job in the Buffalo Niagara region, even before last week’s bombshell that the local unemployment rate had soared to a more than 20-year high of 9 percent.
Mims has been looking for work since she lost her job at Tim Hortons last summer. She’s been trying to find work as a cashier, and even had a couple of interviews, but hasn’t had any luck. Now, the Buffalo resident is thinking about going back to school to learn new skills that could open the door to a wider range of jobs.
“I’m starting to get a little frustrated,” she said. “It’s been a long, drawn-out process.”
Local economists expect it to only get worse. We were fortunate for most of last year, dodging the early blows from the recession through the summer, mainly because our long-stagnant housing market didn’t collapse like it did in so many high-flying markets. That’s how we ended up with our strongest job growth in eight years during 2008, though the 0.8 percent increase in jobs was hardly boom-like.
But when the financial crisis hit last summer, sending Wall Street plunging and the credit markets into a seizure, our reprieve was over. Even though our economy is more diverse than it was in previous downturns, which tended to hit us first, harder and longer, there was no escaping the tidal wave of troubles that continues to build. By December, we were losing jobs by the thousands and the pace accelerated in January.
“It’s really the manufacturing side and the auto industry that are the biggest risks right now,” says Richard Deitz, regional economist in Buffalo for the Federal Reserve Bank of New York.
Factories, which were shedding jobs even when times were good, are cutting with renewed vigor now. The region lost 6.5 percent of its factory jobs over the last year, which translates into the demise of 3,800 generally good-paying positions that, for the most part, aren’t likely to ever return. More than one of every three local factory jobs has vanished since January 2000.
What caused the spike in the jobless rate was a “massive increase” in the number of people filing for unemployment benefits last month, says John Slenker, the state Labor Department’s regional economist in Buffalo.
“To me, the most striking thing of this is the speed in which the recession took hold here, once it hit,” he says.
As a result, there were 53,100 people who were without jobs and looking for work in January, a jump of more than 11,000 from December. More people were unemployed in the Buffalo Niagara region during January than in any other month in the last 20 years.
Combine the highest number of unemployed people since the 1980s with the fewest number of people who are working in 16 years, and it’s a recipe for jobless levels that the region hasn’t seen since it was reeling from the devastating collapse of the steel industry and the excruciating recession of the early 1980s.
Both Slenker and Deitz think the local job market will keep weakening. The jump in the nation’s unemployment rate to 8.1 percent and the loss of another 651,000 jobs across the country during February don’t bode well for the Buffalo Niagara region. We’ll find out for sure when the local job numbers for February are released less than three weeks from now.
“We have a very tight job market for people who have been laid off,” Slenker says. Statewide, about 28 percent fewer people who had been out of work managed to find jobs during January compared with a year ago, according to state Labor Department data.
“Western New York isn’t leading the recession this time,” Slenker says. “But we are catching up very quickly.”
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