The Buffalo Niagara region’s people problem is getting worse again – and that’s bad news for the region’s businesses.
New population estimates from the U.S. Census Bureau show that the region’s population has dropped by about 1% from 2020 through 2023. That’s a loss of nearly 11,300 people. At the same time, the U.S. population grew by 1%.
It’s a disheartening development after the 2020 census found that the region’s decades-long trend of declining population had, at long last, come to an end, and there was even a modest uptick in the number of people working here.
If you think of the economy as a big pie stuffed with money, a rising population means that pie is getting bigger, which means there are more – and bigger – pieces of that pie to go around. That’s a good thing – and that kind of underlying population growth has been a powerful stimulus for the national economy.
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But a shrinking population does the opposite. It means the size of the overall economic pie is getting smaller again. For businesses to grow, they have to steal customers from their competitors or expand outside the region.
“It’s been worse, but it’s not a picture of dynamism,” said E.J. McMahon, the founding senior fellow at the Empire Center, an Albany think tank. “It’s just kind of a flat landscape.”
Until the 2010s, a shrinking population was the norm for the Buffalo Niagara region, and it’s a big reason why the local economy has failed to keep pace with the rest of the country for decades.
So it was a big deal when our population started growing again during the 2010s, with the region adding 31,000 people.
Consumers account for about 70% of all economic activity, economists say, so it stands to reason that if you have more people – that is, consumers – more buying, more selling, more people working and more money circulating through the local economy will follow. More spending means it’s easier for companies to grow here. And it creates more opportunities for new businesses to open and tap into that expanded customer base.
Now, the new population estimates indicate that we’re heading in the wrong direction again. The good news is that the decline highlighted in the new estimates didn’t wipe out the entire gains of the 2010s – at least not yet. The region still has about 20,000 more people than it did in 2010.
But the trend is heading in the wrong direction. And the estimates indicate that the region continues to face some of the challenges it has grappled with for decades.
The population here is older, so we’re dying faster than we’re having babies. Over the first four years of the decade, that cost the region almost 6,300 people.
Immigrants, who drove the population growth during the 2010s, continue to be the biggest source of new people for the region. We added 5,600 immigrants from 2020 to 2023. But we also lost 11,300 people because they decided to move away from Erie and Niagara counties. At the end of the day, that’s a loss of almost 5,700 people.
“We didn’t get as many immigrants in 2020 and 2021 and that’s a pretty big reason why we weren’t growing,” said Fred Floss, a SUNY Buffalo State University economist. “Covid stopped that pipeline.”
The estimates indicate that immigration picked up again in 2022 and 2023, although not to the levels of the previous decade.
The population estimates also don’t tell us some important details, including the demographics behind the drop. That will come in future updates.
“Did we lose population because older people are leaving, or did we lose because young people are leaving?” Floss asked.
The younger population is especially important. They help fill spots at local colleges and universities, and those graduates have the skills and training that make them a sought-after part of the workforce. At the moment, the pool of available workers is still about 14,000 people smaller than it was before the pandemic, and that’s been a constraint on hiring during the recovery.
“The labor force is not increasing largely because the population is aging,” McMahon said.
But the news isn’t all bad. Erie County, for instance, still has almost 3% more people than it did in 2010, even after the estimated drop in population over the past four years. Still, only seven municipalities in Erie County – Amherst, Clarence, Grand Island, Alden, Orchard Park, Brant and Colden – had population gains from 2020 to 2023. Of those, only Alden, Amherst and Colden grew by more than 1%.
Niagara County, on the other hand, is down 3% from its 2010 level. No community in Niagara County gained population.
Floss stressed that the latest census data are estimates and shouldn’t be taken as gospel, although the downward trend is unmistakable.
To reverse the trend, it would seem the best chance is through immigrants. The influx of immigrants from places like Burma and Yemen were big factors in the population increase during the 2010s, Floss said. The region’s job growth, which has accelerated over the past year, also could help if it gives young people a reason to stay here, rather than seek better paying employment elsewhere.
“I wouldn’t panic quite yet, but that doesn’t mean we shouldn’t be trying to figure out how to bring in immigrants and how to keep our high school and college graduates here,” he said. “We need a strategy and a plan and it’s not going to happen by itself.”