Friday, April 18, 2008


Many people who visit this blog are former Gasport residents now living in some far-off land. Many, if not most, have left for purely economic reasons. That's topic of my column that ran in this week's newspapers. It was arguably the most popular one I've written yet. Here it is:

By Bob Confer

The chances are very good that you know someone who has left New York. According to the US Census Bureau, from July 2006 to July 2007 the Buffalo-Niagara region lost 5,166 people and since 2000 the Rochester area has lost over 7,300 of its citizens.

The numbers are staggering but they tell little of the toll on our society. Emotionally, it can be quite taxing for families to be torn apart by this mass exodus with many older parents and grandparents wondering IF they’ll ever see their children and grandchildren again. Socially, this loss of loved ones accounts for broken family units and a dampening of traditional values. For many of us, growing up with our extended families was the norm; most kin held to their roots and found a home in the area. Now, strong extended families have become a quant rarity, people abandoning their roots and, in their new homes, suffering from the lack of family members who were always there to lean on in times of need or to share special times with. Worse yet, their children grow up lacking the important guidance and loving care of grandparents, aunts, and uncles that many of us took for granted.

The underlying question of all this heartbreak and decay is a simple "why"?

The answer is always the same: these people left WNY because there’s nothing here for them. Long gone are the days when a long-term job that provided a decent wage and benefits could be readily found in the region. Unable to find such careers, workers have no choice but to find their American Dream elsewhere, typically in a far-away state where economies are healthy and their urban areas are growing at amazing rates.

To truly understand why this happening, the questioning should be taken one step further. People need to ask: "why have the jobs gone?"

The answer to this is that the great, large companies that once dominated our landscape have either closed shop or moved on to other states because through the years our elected officials have made it incredibly difficult to own and operate a business in the Empire State and be competitive. Thanks to high taxes, foolish regulations, a worsening energy crisis and an ever-growing government, the cost of doing business in New York is the second highest in the United States, second only to Hawaii, figuratively and literally an island unto themselves.

Last week I conducted my annual study of Confer Plastics’ financials to determine just how much money it lost by having its operations based solely in NY. I looked at seven key cost factors that our elected officials have control of or impact upon: electricity, natural gas, workers compensation, health insurance, auto insurance, gasoline, and property taxes.

With every one of those factors, NYS is much more expensive than the states which offer my greatest competition (Ohio, Indiana, Pennsylvania). Comp insurance costs 43% more here. They pay only 56% of what we do for property taxes. The one cost, though, that stands out the most is power since electricity is our third highest expense behind material and labor. Our foes pay exactly half of what we do. This is unbelievably frustrating since we have a natural dynamo - the Niagara River – right in our own backyard.

Taken in total, the seven factors amounted to a loss of revenues of $740,000 for my company versus what my competition pays. That means that the cost of doing business in NY (as a decrease in existing revenues) is 4%. This number is not unique to the plastics industry because the same cost factors are shared by any manufacturer regardless if it might specialize in metals, chemicals or automotive manufacturing. Competitively, this 4% mark-down is significant. Assume that a NY manufacturer makes a part that he could sell to a client for $100. His competition would come in at $96. If this is a high-volume part the client would definitely say "no!" to the NY manufacturer.

The businesses that stay here and try to compete under such circumstances face an uphill battle every minute of every day, looking for ways to cut costs while attempting to develop new technologies and processes without the monetary edge that our competitors have.

Many other business owners don’t have ties or roots as strong as mine and choose instead to wisely move to another state, one where it’s cheaper to do business. That’s why your loved ones left you. It was no fault of their own. They only sought what was best - despite the heartbreaks - and followed those businesses to prosperity, a place far away from New York and our sorry political/economic climate.