New York Fed President John C. Williams traveled to the Southern Tier region of New York State in October to hear from stakeholders about local economic conditions. He met with economic development officials, business owners, nonprofit and community leaders, and academics and students during this two-day Second District regional visit.
The Southern Tier, which consists of eight New York State counties, is a largely rural landscape with two main population centers: Binghamton and Elmira. The region draws its name from the extensive border New York shares with Pennsylvania. While accounting for about 13 percent of New York State’s land area, the Southern Tier contains just over three percent of the state’s population and produces about two percent of its GDP. This regional visit took us to four counties: Schuyler, Steuben, Chemung, and Broome. Here are themes that emerged over two days of meetings and discussions:
Momentum in Primary Industries
Stakeholders across industries said the manufacturing sector is strong, and the region has been successful in growing and diversifying this and other core industries, including agriculture and tourism. The region has a history of expertise in transportation manufacturing—specifically railcar production—while investment in new energy technologies has resulted in innovation and strong demand for products and related services. Representatives of railcar manufacturer CAF USA said the company recently supplied its products to customers in Kansas City and Maryland, with railcars for Boston currently in the production line. Meanwhile, there has been an increase in investments in renewable energy over the last several years, making clean tech a driver of the Southern Tier economy. Despite this momentum, business leaders said investments in the electric grid, increases in labor supply, and more affordable housing are needed to support business operations and future growth and innovation in the region.
Both business leaders and community stakeholders were optimistic about opportunities to build on the growth of clean tech. The New Energy New York (NENY) coalition, led by Binghamton University, is positioning the Southern Tier as a destination for battery research and manufacturing after receiving a federal tech hub designation and government funding to build out a comprehensive battery tech ecosystem. Energy storage technology is a key part of the clean energy transition amid growing demand for domestic battery products, researchers and economic development officials said.
Across the region, discussion participants said tourism—while seasonal—plays a significant role in the region’s economy, given the presence of state parks, wineries, museums, and Watkins Glen International, a NASCAR racetrack in Schuyler County. Watkins Glen hosts racing events throughout the summer that attract many spectators. One study noted an annual economic impact of over $200 million, with high utilization of the region’s campsites and short-term rentals as spectators stay for several days.
Economic Challenges and Potential Solutions
Workforce: Stakeholders across the region noted that labor shortages in the Southern Tier have created barriers to growth and industrial diversification. High costs for transportation and childcare, limited adequate housing stock, and low wage growth have led to challenges in attracting and retaining qualified talent. Corporate leaders in the region said that employers have expanded their geographic scope for recruiting and have invested in transportation alternatives in an attempt to bring in workers from other job markets.
Representatives from the agriculture industry said it can be challenging to maintain a stable workforce in a seasonal industry. A seasonal work model often requires labor force retraining, as many workers move elsewhere for off-season employment, leading to high turnover. And those that remain employed for longer periods often commute from further distances where housing costs are lower, according to workforce development professionals. Agriculture representatives also said that both recruitment challenges and the industry’s rapidly aging labor force could have lasting implications for the region and the nation’s food supply. And business leaders in the dairy industry noted that labor has become the largest expense, while rising costs for utilities are putting pressure on farmers.
Anecdotally, stakeholders said generational gaps in attitudes toward work, combined with fallout from the pandemic, have led to a “disengaged” workforce, with many eligible workers opting not to seek full-time employment. Stakeholders across industries expressed concern that worker shortfalls will hinder future growth despite strong demand for their products and services. One manufacturing representative said that the firm’s ability to bid on future work could be curtailed if it is unable to attract enough workers to keep pace with demand.
Manufacturers and business stakeholders also said it is difficult to attract workers through channels associated with traditional four-year colleges. As a result, manufacturing firms have built partnerships with school districts, community colleges, and area universities offering micro-credentialing programs to upskill the workforce and leverage the region’s investments in industry.
Housing: The housing market in the Southern Tier has recently experienced rapid appreciation and escalating peripheral costs, such as utilities and insurance. Economic development leaders said that high construction costs have tamped down the supply of affordable housing, with all-in expenses exceeding potential sale prices. Developers have responded in some cases by creating rental properties to cater to demand from new entrants to the market, such as empty nesters. Municipalities and developers are also working to convert vacant offices, churches, and schools into housing, with the aim of revitalizing neighborhoods and increasing affordability.
Rural Poverty: Data from the United States Census Bureau shows almost a quarter of children in the Southern Tier region live in poverty. Nonprofit leaders said rising costs of food, childcare, and housing are leading to difficult choices for households, while some prospective workers are putting off employment decisions to address immediate family needs. Both business and community leaders said food insecurity persists in the region, and community leaders added that the “chronic stress” experienced by those living in poverty has contributed to the disengagement and challenges in the workforce.
Many also said there is a lack of mental health services for both children and adults in rural communities, as well as overall resource constraints for local nonprofit organizations in terms of funding, staff, and even physical workspace. Nonetheless, meeting participants noted collaboration among nonprofits to address community stresses and economic needs.
Looking Ahead
Economic development and business leaders across the Southern Tier highlighted growth in the region’s traditional industries of manufacturing, tourism, and agriculture, as well as newer areas such as clean tech initiatives. Challenges to this growth include rapid increases in the cost of living, imbalances in the housing market, and labor shortages in critical industries.
Shawn Phillips is the head of external engagement in the Communications and Outreach Group at the New York Fed. She is responsible for broadening and deepening relationships with civic, business, academic, and other stakeholders within the Federal Reserve’s Second District.
Craig Bradstock is a business operations specialist in the Communications and Outreach Group at the New York Fed.
Andrea Grenadier is an associate director of external engagement in the Communications and Outreach Group at the New York Fed.
The views expressed in this article are those of the contributing authors and do not necessarily reflect the position of the New York Fed or the Federal Reserve System.
