The Forgotten New York
SCHENECTADY, N.Y.-"In Schenectady, Our Schenectady," the city song goes, "what a warm and friendly place it is to be," full of "stores and shops with all that one might need or wish to see."
Back in the 1950s, maybe. But the song, adopted by the city in 1995, expresses more hope than reality these days. Once known as "the city that lights and hauls the world," Schenectady has become a dim bulb and the first stop in a long, bleak road that runs through much of upstate New York, a countryside pockmarked with a series of eerie industrial relics and shuttered mill towns.
In sharp contrast to prosperous New York City and its suburbs, where multi-million-dollar Wall Street bonuses have helped fuel a booming economy, the poverty upstate led new Gov. Eliot Spitzer to compare it to Appalachia during his campaign for office last year. And while turning around this depressed region is not the only problem confronting Spitzer-who gained fame as a Wall Street dragon slayer during his tenure as the state's attorney general-it will be at the top of his agenda and among the most difficult to solve. "Like Rip van Winkle," Spitzer told those gathered for his inauguration last week, "New York has slept through much of the past decade while the rest of the world has passed us by."
No one needs to tell that to Bernard Lupi, 59, who looked out on State Street, Schenectady's main drag, recalling a time when his hometown was booming, with General Electric and the American Locomotive Co. employing tens of thousands of hard-working Schenectadians.
But American Locomotive shuttered its factory in 1969, and GE has slowly moved its manufacturing elsewhere. Bechtel is following suit. And the city is about to lose one of its two remaining hospitals. Mirroring the losses in Buffalo, Rochester, and other upstate cities, Schenectady's population has sunk to less than 62,000, from 92,000 in 1950. "I've lived here 58 years, and I've seen it when it was good," says Lupi, stirring his coffee. "But Schenectady is gone, and they ain't never gonna bring it back."
Anemia. Pessimism is rampant across upstate New York, a recent Empire Center for New York State Policy survey showed, with 35 percent of those in the western part of upstate saying they expected things to get worse over the next five years. Poverty rates hover around 30 percent in some cities. Property tax rates are among the highest in the nation. Unemployment rates are not historically high-around 4 percent in many upstate areas-but job growth is anemic. And the jobs being created tend to be both lower skill and lower paying than the ones that were there before. Crime and teen pregnancies are on the rise.
"One hundred years ago, upstate New York was the Silicon Valley of North America, with GE, Kodak, and Carrier [Corp.] air conditioning," explains Prof. Mitchell Moss of New York University's Robert F. Wagner Graduate School of Public Service. "Now we are left with the relics of this industrial age."
New York is one of the few states actually losing population, thanks in good part to people fleeing from upstate. One recent study found that the young adult population of upstate New York declined at nearly four times the national rate between 1990 and 2005. "If you are smart, ambitious, creative, and can produce, and are under 25, you get out of upstate New York as fast as you can," says Moss.
Spitzer has already announced plans to appoint an upstate development czar. He has also signaled a willingness to reform state worker's compensation and liability laws that businesses believe have fueled the flight of jobs south. Economists are also advocating a more focused use of state aid, which has been spent on a myriad of sometimes questionable projects. Case in point: Rochester's fast ferry to Toronto project, meant to revitalize the city, ended up costing it more than $10 million in less than a year. It was abandoned last month.
No one doubts Spitzer's task is daunting. Outgoing governor George Pataki, who is credited with bringing some high-tech jobs upstate, generally failed to gain much traction during his three terms. James Parrott, chief economist of the nonpartisan Fiscal Policy Institute, says that Spitzer has brought a "credible commitment" to fixing upstate, one that wasn't there before.
JoAnn Sifo, who opened up Chez Daisie CrÃÂêperie just off Schenectady's State Street early last year, is one of many upstate New Yorkers banking on that commitment to last. "Upstate has been neglected for so long it will take years to turn it around," she says. "We've been working for 10 years, and we only have a glimmer of hope." It will be Spitzer's job to give upstate trailblazers like Sifo something more.
This story appears in the January 15, 2007 print edition of U.S. News & World Report.