How well is the Northeast doing? Its $3 trillion economy, fueled by the Knowledge Economy centered on the cities of New York, Boston, Philadelphia and Washington, D.C, and the heavy lifting provided by still-vital manufacturing prowess, produces some 20 percent of the goods and services. Much of America’s wealth is produced here, and much value accrues here. Three of the nation’s wealthiest states, based on per capita income are here: Connecticut, Delaware and the territory of Washington D.C. Of the country’s 75 wealthiest counties by per capita income, 44 lie in the Boston-Washington corridor.
But look a little closer, and the picture turns less rosy. In 2012, the last full year for which economic growth is available, U.S. GDP grew 2.5 percent. It’s notable that every one of the 11 states that constitute the Northeast registered below-average growth. Maryland topped the regional rankings at 2.4 percent; the giant economies of New York and New Jersey both limped along at 1.3 percent; and Connecticut, alone among the 50 states, showed a negative GDP of -.1 percent.
Led by aggressive governors doubling as their states recruiters-in-chief, Texas and Florida—as well as other sun-belt states—have been siphoning off a substantial chunk of the region’s economy, luring a steady stream of corporate chiefs to expand or relocate in warmer climates. Not surprisingly, much of the nation’s job-creation activity has taken place away from the Northeast. When Bright.com, an aggregator of job postings and resumes, calculated which cities offered job hunters the most opportunities, greater Seattle topped the list. Greater Schenectady, alone among Northeastern cities, made the top 30.
Chiefs in the Northeast are increasingly beset by wanderlust, eyeballing states and regions around the country—and sometimes overseas—for expansion opportunities, or to relocate headquarters and operations entirely. It’s not just incentives and subsidies that draw them out of the region. Chiefs complain about such issues as aging infrastructure, punishing climates and housing costs that deter new or relocating employees. Tax rates are, and have long been, an irritant; of the 10 worst states on the Tax Foundation’s state business tax climate index, five are in the Northeast. Add to that such factors as unionization and government bureaucracy, and the pace of out-migration comes as no surprise.