This post was written by Brian Crandall, who writes the blog “Ithacating.”

Ithaca, N.Y. — As cities and towns across Central New York and the Finger Lakes region struggle with budget deficit, the city of Ithaca appears to – yet again – be an oasis surrounded by reality.

But does that perception align with reality? And if it is true, why is it true?

We’ve tried to answer all your questions about Ithaca’s economy and unemployment rate – and how they might change in the future – in 7 easy questions.

1 – What’s the unemployment rate in Ithaca? How has it changed recently?
2 – It seems like Ithaca’s economy has held up a lot better the last couple of years than its neighbors’. Is that true?
3 – Why is Ithaca’s economy doing better than those of many of its neighbors?
4 – Aside from the universities, who are the big employers in Ithaca? How are they doing?
5 – If Ithaca is doing so well, why does it seem like there’s so much poverty? 
6 – What are the biggest problems currently facing the Ithaca economy?
7 – What are the major long-term threats to the Ithaca economy?

(Did we miss your question? If so, email me at jstein@ithacavoice.com.)


1 – What’s the unemployment rate in Ithaca? How has it changed recently?

As of March 2014, the U.S. Bureau of Labor Statistics and the New York State Department of Labor determined that Ithaca and Tompkins County have a 4.4% unemployment rate, which is the lowest in New York State by a wide margin. For comparison, in March 2013, the unemployment rate was 5.0%, and in March 2012, the unemployment rate was 5.6%. Like many communities, Ithaca continues to recover from the late 2000s recession, but still has yet to reach pre-recession levels; the unemployment rate was only 3.2% as recently as the spring of 2008.

Back to the questions


2 – It seems like Ithaca’s economy has held up a lot better the last couple of years than its neighbors’. Is that true?

Yes. When compared to neighboring metropolitan areas (Rochester, Syracuse, Binghamton and Elmira), Ithaca’s economy has consistently had the lowest unemployment rate. Perhaps more importantly, over the past decade, Ithaca and Tompkins County represented the only metropolitan area in upstate New York whose employment totals showed significant (>5%) growth over the past decade, with about 7,700 more jobs now located in Tompkins County (for a total of 70,000).

Back to the questions

3 – Why is Ithaca’s economy doing better than those of many of its neighbors?

Being home to Cornell University, Ithaca College and TC3 has its advantages.

The large employment base in education was less impacted by the recession and, perhaps contrary to those rough economic times, educational employment grew substantially.

Ithaca has been lauded by its peers for its success in leveraging its local brainpower into for-profit endeavors, resulting in the attraction of outside investment capital, and spurring the growth of local high-tech businesses.

Furthermore, Ithaca has successfully utilized its natural and cultural amenities to grow its hospitality and tourism sector. If there’s any “secret” to Ithaca’s success, it’s in having bountiful local resources and using them to the community’s advantage.

Back to the questions


4 – Aside from the universities, who are the big employers in Ithaca? How are they doing?

Outside of Cornell and IC, the largest employers are the Ithaca City School District, Borg-Warner Automotive (a manufacturer of automotive engine and transmission components), and the regional hospital, Cayuga Medical Center. The ICSD has struggled in recent years to restrain its budget, which has resulted in a number of staffing cuts. Borg-Warner has about 1200 employees locally and the number in its Lansing facility has remained steady over the past few years. However, on a regional level, they have struggled like many upstate manufacturers, closing a facility in neighboring Cortland County in 2012, which resulted in a loss of 158 jobs. Cayuga Medical Center has added jobs in recent years, and launched an expansion and renovation last year. In summary, Ithaca’s other large employers run the gamut from growing to holding steady to shrinking.

Back to the questions


5 – If Ithaca is doing so well, why does it seem like there’s so much poverty?

On the individual level, Ithaca’s poverty rate is notoriously hard to gauge; college students who aren’t working are considered to be in poverty based off income thresholds.

If one uses families in poverty as a way to try and filter out most students, Ithaca is above the national average, and usually higher than New York’s state average as well. Ithaca has struggled to adequately deal with poverty.

Back to the questions


6 – What are the biggest problems currently facing the Ithaca economy?

Ithaca faces several threats to its economy. In recent years, the community has suffered substantial losses in the manufacturing sector. The biggest single case is the loss of nearly 500 jobs at the now-defunct Emerson Power Transmission, which began layoffs in the late 2000s and closed permanently in 2010. Manufacturing employs about 3400 people locally, and further losses could stunt local economic growth. Another concern is that although education has traditionally been the biggest driver of employment growth, it has decreased its headcount over the past year. On a broader scale, the area is trying to lessen its pervasive underemployment issue, where workers have education and skills beyond that needed for their job.

Back to the questions


7 – What are the major long-term threats to the Ithaca economy?

Looking further ahead, perhaps the biggest threat to Ithaca’s economy is the much-feared “higher education bubble”. Cornell might have enough prestige and ongoing research to make it through an extended downturn in the higher education system, but schools with less research and less name recognition, such as Ithaca College and TC3, may have a much tougher road ahead, and this could cause serious pain to the local economy. In consideration of another trend in the future of higher education, the growth of Massive Open Online Courses, or MOOCs, pose a threat through the resulting loss of dollars as students no longer need to live in Ithaca to attend class. Lastly, and this isn’t relegated to Ithaca, the increased automation of job duties could result in many lower-skill jobs being automated right out of the employment count. Long story short, Ithaca’s over-reliance on its institutions of higher education puts it at serious risk moving forward, and the region will need to find ways to diversify its economy in order to succeed in the upcoming years.

Back to the questions

Brian Crandall

Brian Crandall reports on housing and development for the Ithaca Voice. He can be reached at bcrandall@ithacavoice.com.