Six of the 10 cities where wages have fallen the fastest this year are in New York. Average wages fell dramatically in Rochester, Syracuse, Albany, New York, Poughkeepsie and Buffalo – and the decline has been devastating on New York State’s finances, according to a study released last week from the Brookings Institution.
It is unusual, according to the Brookings study, even in the depths of a recession, for wages to fall. Usually, employers prefer to cut jobs than to cut salaries. But in New York City, wages fell 1.5% in the first quarter of 2009. Upstate New York suffered even larger declines in wages. Rochester wages declined 2.3%, and in Syracuse wages went down 2.2%.
These decreases in wages, combined with large layoffs is having a devastating impact on New York’s tax revenues. In May, personal income tax revenues were 44% lower than in 2008 according to State Comptroller Thomas P. DiNapoli’s office.
