Niagara Falls Unemployment Rate highest in New York State

State’s monopoly on Park, failed Economic Development policies to blame

By James Hufnagel

The city of Niagara Falls suffers from some of the highest rates of taxation and poverty (nearly double the rate of childhood poverty), and from the highest rates of per capita violent and property crime of any city in the entire state. Now we’re adding another grim statistic to that list.

Despite the endlessly-repeated factoid that eight million tourists visit here every year, Niagara Falls has a chronically high rate of unemployment.

Not just high, but the highest rate of unemployment of any city in the state.

The unemployment figure for June, 2017 (the latest month available) for the city of Niagara Falls was a whopping 7.7%, by far the highest of any city with population above 25,000 in all of New York State, according to the state Department of Labor.

The next closest cities were Elmira (7.0 %) and Buffalo (6.7%).

The snapshot unemployment rate for New York State for June was 4.5%. So the unemployment rate for Niagara Falls was more than three full percentage points higher than the state for that month.

By way of comparison, the other two Niagara County cities, Lockport (6.0%) and North Tonawanda (5.0%) were at least in the neighborhood of most other economically-depressed upstate cities. And with Niagara County as a whole coming in at 5.6%, more than two full percentage points better than the city, you have to ask the question: Just WTF is wrong with Niagara Falls?

How does it happen that a city next to a world-famous tourist attraction, actually sharing its name, has such a high rate of joblessness? As a matter of fact, the highest in the state?

The answer is obvious.

Instead of parking downtown and patronizing local small businesses like restaurants, taverns and various retail establishments, the eight million visitors who come here every year access the state-owned and operated Niagara Falls State Park from two directions on a dedicated parkway. They park on one of 1500 parking spaces, get wet at Cave of the Winds and ride the Maid of the Mist, dine on burgers, fries and Cokes at Delaware North’s Top of the Falls restaurant, snack pavilion and food stands, purchase souvenirs at one of two gift shops, and then exit the park and leave the area with little need or reason to enter or spend money in the city of Niagara Falls.

According to New York State Parks, total revenues for Niagara Region parks from April 1, 2016 to March 31, 2017 were reported to be $25.2 million, nearly $20 million of which comes from Niagara Falls State Park alone. That’s approximately a fourth of the annual budget of the city of Niagara Falls, an amount that is vacuumed up by the state here and trucked away in bundles to bolster Albany’s bloated bottom line.

Money spent in a local economy results in what’s called a “multiplier effect” on economic prosperity. Can you imagine the economic multiplier effect of $20 million spent in downtown Niagara Falls, instead of being reaped from the eight million tourists and pilfered by the state?

We would be remiss if we didn’t also address the untold millions of dollars that the state and city have shoveled into “economic development” projects here over the decades, that have culminated in Niagara Falls’ dismal unemployment numbers.

Since 2010, the N.F.C. Development Corp., the city’s economic development agency, has authorized loans totaling $2.3 million, $455,646 in 2016 alone. Many of those businesses, including Yvonne’s restaurant on Third Street, Eddie Jay’s, Shorty’s Restaurant, Mary’s Soul Food and others, took some of that money and were soon shuttered.  It’s hard to succeed when everybody’s getting fed in the state park.

Then it was announced last week that the drive thru at the Dairy Queen on Niagara Street is in line for a $100,000 outright grant. Because nothing says economic development like another fast food drive thru.

Then there’s the $75,000 the city gifted to NFNY Hotel Management to help establish a TGI Fridays, a multinational casual dining chain that has over 920 other locations scattered around the globe, and the brace of Mayor Paul Dyster’s millionaire buddies, including but not limited to Craig Avery, Michael Lewis and Joe Anderson, who have also dipped their beak into the city’s largesse.

USA Niagara, a subsidiary of state economic development bureaucracy Empire State Development, has slathered many millions of dollars on various and disjointed projects here, also to little if any discernible effect on the unemployment rate.

Among its highly promoted, but never fully realized accomplishments in terms of economic impact and lessening unemployment here, are the Third Street Business District, the Buffalo Avenue Heritage District Revitalization Strategy, the Niagara Experience Center, the Conference Center Niagara Falls, the Downtown Niagara Falls Multi-Modal Access Program, the Robert Moses Parkway North and South Reconfiguration, redevelopment of the former Rainbow Centre Mall and something called Safe & Clean Niagara. Altogether over $100 million “invested” in downtown Niagara Falls, that may as well have been spent on the dark side of the moon for all the good it did.

So many millions of dollars spent to kickstart economic development in the city’s downtown, while Niagara Falls State Park, next door, rakes in the vacation dollars of millions of tourists every year, resulting in an unemployment rate that’s the highest in the state.

Why aren’t we electing government officials who are at least willing to open their mouth about this deplorable situation, the abysmally high rate of unemployment in Niagara Falls, which is the highest in the state?