Binghamton: A Case Study in Economics

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After accepting a transfer in the late 1970’s, my Dad’s father moved his wife and eight children to Binghamton, N.Y.  My grandfather’s decision to take this transfer is probably the reason that I am alive to write this post.  It is in Binghamton where my father met my mother, who grew up just outside of town.  The couple eventually moved to Washington, D.C. to seek better job opportunities, but our extended family still lives in this upstate New York city.  Because we travel up to my mother’s hometown every couple of years, the slow deterioration in this once typical American town is readily apparent.  But it wasn’t always this way.

In the mid-19th century  the Endicott-Johnson Shoe Corporation employed more than 20,000 people who produced more than 52 million pairs of shoes every year.  Broome County was also home to one America’s first major producers of photography film and equipment. Ansco preceded Kodak in the film industry and had been a fixture in Binghamton since 1901 when the company opened its headquarters there.  By April 2000, Brandenburg Industrial Service Co. began demolishing the former Ansco facilities to clear the land for development.  The Binghamton visitor center now holds one of the few reminders that Ansco ever provided jobs there.

Many of the problems in Binghamton started with the loss of manufacturing jobs in the late 20th century.  According to the New York State Department of Labor, about 34,100 people in the Binghamton Metropolitan Statistical Area held manufacturing jobs in 1990, but that number fell to about 12,000 by 2014.  One of the companies that must be addressed in Binghamton’s slow demise is International Business Machines (IBM).

In this millennium, IBM has continued to suffer with the creative destruction occurring in the information technology sector.  According to Binghamton University professor Clifford Kern, “As IBM gradually morphed from a computer maker into an IT services giant in the mid-2000’s, most of the company’s 15,000 local workers lost their jobs.”  The loss of these technology jobs have helped drive Binghamton unemployment up to 9.6%, or two points above the national average.  With little to offer newcomers, Kern said, “It’s (Binghamton) not attracting people for the quality of life nor for the weather.”

People naturally have an emotional attachment to their surroundings, and they are usually quick to defend their hometown when anyone suggests that it is no longer a great place to live.  (I’ve witnessed this first hand whenever I suggest that my hometown of Frederick and the state of Maryland in general is not the best place to raise a family.)  But even Binghamton residents are starting to see that this manufacturing powerhouse will not be coming back anytime soon.  According to a 2012 Gallup pole, residents of Binghamton are the least likely (27.8%) to say their city or area is getting better as a place to live.

Binghamton is a case study in economics that teaches a valuable lesson.  Once manufacturing jobs start to leave an economy, then they are difficult if not impossible to get back.  The United States has lost most of its manufacturing base in recent decades, and the situation portends austere conditions for much of the country.  Like my parents did in the late 1970s, Americans will eventually have to move their families to where the jobs are from where the jobs are not.