Economists: Northrop Grumman job loss exemplifies a sad fact of life on LI
Monday's devastating announcement from Northrop Grumman that it would transfer most of its remaining Long Island jobs to California and Florida exemplifies an unfortunate fact of economic life here: the steady loss of good jobs, being replaced by others that pay less.
Economists say that creates a vicious cycle. A growing percentage of the population has less disposable income to spend at other businesses, spending that would, in turn, produce a multiplier effect of economic growth and job creation.
"We have a situation in which we have job growth that is slow, but whatever jobs we are getting tend to be relatively low-paying, and yet we are in a high-cost area," said economist Pearl Kamer of the Long Island Association, the region's largest business group.
The Island's challenge, she said, is to develop higher wage jobs and at the same time try to reduce the costs of living and doing business here.
In the 12 months ended Dec. 31, for example, the Island had a net gain of 2,700 nonagricultural jobs, according to the state labor department. It said 900 jobs were created in retailing, 3,100 in health care and social assistance, and 2,800 in administration and support, waste management and remediation. All combined to overcome losses in government jobs and manufacturing. The latter includes most defense and aerospace jobs.
The Island's defense industry has been losing jobs since the peak of the 1980s Reagan administration defense buildup, when it employed as many as 80,000. That number had fallen to 31,000 in 2006. Total employment, public and private, on Long Island now is about 1.3 million.
The 550 remaining in Bethpage, mostly engineers but also program management and business development personnel, are to form a "center of excellence" for electronic warfare -- a longtime specialty at Grumman before and after the 1994 Northrop takeover. It includes the jamming of enemy ground radars and communications to help safeguard friendly aircraft.
A relatively bright spot in the local jobs picture has been the manufacture of pharmaceuticals, vitamins and other consumable health products. In the past year, eight companies in that industry have announced plans to hire 834 people on Long Island. As a group, the companies employ 5,135 locally. At the largest, NBTY, the new jobs are in production, online sales and marketing.
"There are growing industries," said Kamer, "but not enough high-paying jobs."
The labor department says aerospace engineers on Long Island earned a median annual salary of about $112,000 a year in the first quarter of 2012, the most recent date for which data is available.
In a study last year for the Long Island Forum for Technology, Long Island economist Martin Cantor wrote, "A major factor keeping Long Island in the economic doldrums is that the region is becoming more of a service-sector economy. More jobs are being created in the lower-paying retail, health care and tourism sectors, while the higher-paying manufacturing and construction industries continue to shed jobs."
With James T. Madore