1. Risk Management Association Long Island Economic Update What Lies Ahead? Dr. Martin R. Cantor, CPA Long Island Center for Socio-Economic Policy www.martincantor.com February 7, 2014

2. Long Island’s Future Workforce Is Leaving The Region The Millenials - Long Island Births 1980-1999 Long Island’s Young People - 2000-2012 Long Island Long Island Births % Household Decade Births Population Population Size 1980-1989: 331,700 2,609,212 12.7 % 2.99 1990-1999: 381,082 2,753,913 13.8 % 2.95 ========================================================= Ages 20-35 2000 498,126 2,753,913 18.1 % 3.02 2012 476,626 2,831,072 16.9 % 3.04 =========================================================

3. ALL LONG ISLAND JOBS ARE NOT CREATED EQUAL SHIFT FROM HIGH PAYING TO LOW PAYING JOBS, 17,211 Manufacturing Jobs Lost Dropped from 8.1% to 6.4% 1900 jobs lost in 2013 9,284 Construction Jobs Gained Increase Sandy Related Increased from 6.4% to 6.7% 18,933 Finance, Insurance & Real Estate Information Tech Jobs Lost Dropped from 13.7% to 11.6% Lower Paying Service Sectors 65.7% 2000 Workforce -69.7% 2012 (ALL DATA FROM US Census 2000-2012) SUMMARY 2000-2012 HIGHER PAYING LOWER PAYING JOBS LOST: JOBS GAINED: 36,144 99,579 Total Jobs Gained 67,362 (5.1%) 17

4. Long Island’s Declining Economic Strength The Results of Workforce Shift From 2000-2012 (Real Dollars Adjusted for Inflation) $1.5 BILLION LOSS in Buying Power (2000-2012) $1,250 PER PERSON REDUCTION in Spending 2.8% Loss of GRP During Great Recession (2005- 2010) $500 MILLION LOSS in GRP (2008-2011)

5. Long Island’s Eroding Labor Force Between 2000 and 2012 Fewer Long Islanders Over 16 Years of Age Working Percent of the labor force not employed increased 181.6% from 2000 - from 3.8% to 6.9% Percent of over 16 population in labor force increased by 2.6% (64.2% in 2000 unchanged since 2010-65.9%) Percent of over 16 population employed decreased by.8% from 2000. (61.3% in 2012)

6. Unrest in Long Island’s Manufacturing Sector LONG ISLAND FORUM FOR TECHNOLOGY STUDY: 34% MANUFACTURING FIRMS LIKELY TO LEAVE (1,200 Companies) 56% Agreed that the manufacturing sector would contract over the next five years Resulting in: 25,000 ADDITIONAL HIGH PAYING JOBS LOST and $1.25 BILLION in ANNUAL WAGES LOST Just this alone over 30 years = $37.4 BILLION LOST

7. 2012 Long Island Family Income (stated in 2000 dollars) Median 2012 Family Income: Nassau County $80,208-Decreased 1.3% from 2000 Suffolk County $71,222- Decreased.5% from 2000 Per 2012 Capita Income: Nassau County $30,274-Decreased 5.8% from 2000 Suffolk County $26,360-Decreased.82% from 2000

8. Long Island Family Income Distribution – 2012 The Wealthier Got Wealthier Family Income % LI Increase Family Income Bracket Families (Decrease) 2012 from 2000 Below$10,000-$24,999 6.3% (30.4%) ( 9.1% - 2000 ) $25,000-$49,999 12.3% (32.0%) (18.1 - 2000) $50,000-$99,999 28.1% (28.7%) (39.6% - 2000) $100,000-$199,999 38.0% 43.9% (26.5% - 2000) Over $200,000 15.3% 130.1% (6.7% - 2000)

9. Between 2000 and 2012 Long Islands Population Increased by 2.8% While Over 60 Year Olds Increased by 90,000 (+18.7%) 20 to 60 Year Olds Increased by 9,350 (+.62%) Under 20 Year Olds Decreased 22,000 (-2.9%) LONG ISLANDS GROWTH DEPENDS ONTHE RETENTION AND ATTRACTION OF THE YOUNG WORKFORCE Long Island is Aging

10. Long Island’s Economy: Where Do We Go From Here -Hurricane Sandy- Nearly $2 billion in short term spending -multiplier of $1 billion = $3 billion economic activity. -LI housing prices have bottomed out-dropping 56 % between 2005 and 2012: Sales prices increased by 1% since 2010. -LI home sales fell - 49,000 homes selling for $30.3 billion in 2005 to 23,287 homes selling for $13.6 billion in 2012: 22,642 homes sold in 2013 for $8.1 billion -LI foreclosure notices increased from 6,249 in 2005 to 13.132 in 2012. Have leveled off in 2013. -LI Rental housing decreased by 7.8% since 2010 to 18.4% of LI housing. -New York City/Long Island Gross Regional Product 2011 increase of.08% (to $1.28 trillion) lags behind national 1.66% increase

11. Hurricane Long Island’s Economy: Where Do We Go From Here CONCLUSION -Long Island Economy slowly recapturing the 3.3% Gross Regional Product lost during Great Recession. -The process will be slow-LI is now a low multiplier service sector economy spin off lower paying secondary jobs. -Higher paying manufacturing jobs (6.4% of 2012 workforce 8.07 in 2000) will leave region for less expensive places, causing loss in the secondary jobs that they create. -Fewer Long Islanders in workforce with fewer working. -Lower family and Per Capita income in high cost region. -Housing prices will take time to rebound-prospective purchasers are earning less income and young people are leaving the region. More homes sold for less $.