The Current State of the Herkimer County Economy

So I have been thinking about our region's economy and ways in which we could attempt to improve it from the local level, for it would be great to have some "home grown" growth.  With the current County Legislature elections in full swing it appears as though the focus isn't on the economy, rather candidates have been focusing upon the new jail and taxes.  These are two pressing issues, but you never hear the kind of talk that we need from our elected officials.  Even when economic growth is mentioned by a local politician it is often quickly followed by the phrase "lower taxes".  Meaning that to many local officials "lowering taxes" is a one trick pony to allowing our area to attract new jobs, thus, since there have not been any new jobs created recently, you can blame the high taxes.  It is a self-perpetuating cycle that needs to end.  

This rhetoric has gone on for as long as I can remember, and taxes have not, and physically cannot be lowered due to the fact that we have an aging population that demands government services.  When thinking about this the Herkimer Telegram, that fantastic publication known for its top notch investigative reporting (Donna Thompson may very well be the next Bob Woodward), gave me a story that I feel captures the uphill battle that we face in reinvigorating our economy.  The story focused on the fact that Social Security benefits are not going up this year because they are tied to inflation, and due to the terrible state of the economy, inflation has not risen.  But the real crown jewel in this report was the fact that it states the number of individuals in the Village of Herkimer who receive Social Security benefits.  Here is the breakdown:

-The Village of Herkimer has 7,498 residents as of the 2000 census (a number which may drop in next years count).

-According to the Telegram report 2,637 of those residents receive social security benefits, meaning that they are over the age of 62.

-414 individuals in the Village receive low income social security benefits, or "the social safety net"

-Thus a grand total of 3051 residents out of 7,498 (likely less) residents currently receive benefits, meaning that they are either too old to be working, or have come upon hard times (and most likely do not have the skills or training that a new employer would be looking for)

-This equates to over 40% of the Village's population receiving social security benefits!

Then, one has to factor in those who are in school still, under 18 or in college, and the labor force that you are left with is tiny.  Also having to be factored into the equation is the fact that Herkimer County is obligated to pay for a large share of medicare/medicaid payments on many of these people, as well as providing other social services, on top of the federal government providing a baseline fixed income from social security.

We currently are a community that is quickly draining government coffers without the ability to fill them back up on our own.  So when a local politician says that we need to lower taxes in order to entice a new businesses to move here, how does he/she propose to do so when 40% of the Villages population is currently receiving benefits from the government, and that number is likely to continue growing as young people move from the area.  And even if a firm did decide to move into the area because we had lower taxes, what workforce are they going to draw from?  Sure we do have an unemployment rate of 7.3%, which equates to some able bodies that can be hired, but according to the 2000 census there are only 750 people residing in the Village of Herkimer who have bachelor's degrees (15% of the population).  Thus, even if we did have lower taxes, we have no educated workforce to offer a company.  It was the fact that they had an educated workforce that allowed the Saratoga region to grab the AMD chip fab plant from Marcy.

To sum up our using the Village of Herkimer as a microcosm of the County as a whole:

-We have an aging population of which over 40% of are currently receiving social security benefits.  Because of this we will not be able to lower our taxes because our population has also been on decline, so it puts the burden of supplying County mandated services to these individuals that much higher per working individual.

-We currently do not have an educated work force to offer a company to come here even if we were to somehow find a magic bullet, say stop repairing all the roads in the county, to lower taxes.  Thus, there is still no incentive to move here vs. somewhere else where they are guaranteed to be able to find qualified workers.

Now that we have outlined the uphill struggle we have to achieve prosperity once again, lets look at the things that might make us attractive to an employer:

-Low cost of living.  A middle class wage goes a lot farther here than it does almost anywhere else in the country.  

-We are centrally located between New York City (4 hours), Boston (5 hours), and Montreal (4 hours).  Thus, if a company was to move, say a manufacturing facility to our region, they could quickly go back and forth to their headquarters if they are located in any of these cities.  This also would increase their quality of life, for it would make it easy to take a weekend trip to any of these places.

-We have a good infrastructure system with the ability to improve in the future.  We have roads, we have a rail link to major cities as well as for industrial applications, and we have education centers.  So if we were to attract a new industry, say the nanotech sector through the Marcy site, we could utilize our great community colleges to train our workforce to work with semiconductors.

While the numbers do point towards a bleak picture, we have the ability to improve our local economy if we are willing to talk about new and inventive ideas.  The easy political scapegoat of saying that the only way to attract business is through lower taxes will work no longer.  We need leaders who are willing to go out on a limb and suggest new ideas to people, to help find our niche.  New York State seems to have found a niche for our area in terms of the nanotech industry.  They are investing $45 million in Marcy to help make that niche happen in our area, much as it has in the Capital Region.  But we need to follow suit.  One of my future fears is that the nanotech industry will take off, but if we are not on board, that it will not enhance our quality of life.  IBM, AMD, and countless other companies have the ability to bring in their own workers if we do not provide an educated workforce, people travel far and wide for good paying jobs in places that are conducive to raising families.  This could potentially create a divide between the new workers and locals, something that no community needs.

So we need our leaders to step up and start talking about ways in which we can improve our future.  Herkimer County does have a place in the new economy, and we need to find, as well as support, whatever new area we decide to bring here.  The future is ready for the taking, and all we need are leaders who are ready to be innovators and bring new ideas to the table.