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An economic “hope story” in Buffalo, New York

Kai Ryssdal, Nela Richardson, and Maria Hollenhorst Oct 31, 2022
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In Buffalo, there is "the sense that low-wage workers are doing better than inflation," says Nela Richardson of ADP, walking down Elmwood Avenue with "Marketplace" host Kai Ryssdal. Brandon Watson

An economic “hope story” in Buffalo, New York

Kai Ryssdal, Nela Richardson, and Maria Hollenhorst Oct 31, 2022
Heard on:
In Buffalo, there is "the sense that low-wage workers are doing better than inflation," says Nela Richardson of ADP, walking down Elmwood Avenue with "Marketplace" host Kai Ryssdal. Brandon Watson
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We spend a whole lot of time on Marketplace talking about the macroeconomic big picture — jobs, interest rates and demand in this economy. 

Marketplace host Kai Ryssdal talks with Nela Richardson, ADP’s chief economist, at a coffee shop in Buffalo, New York
“Marketplace” host Kai Ryssdal and Nela Richardson, ADP chief economist, started talking nearly a year ago about how to tell the story of inflation. Above, they chat in a Buffalo coffee shop. (Photo by Brandon Watson)

But data doesn’t always match up with how people feel. So, at this peculiar economic moment — with inflation higher than it’s been in 40 years, the Federal Reserve raising interest rates and many businesses still evolving from pandemic disruptions — we’re dedicating this episode to one street: Elmwood Avenue in Buffalo, New York. 

In late October, Marketplace host Kai Ryssdal met up with Nela Richardson, a regular contributor to Marketplace and chief economist at the payroll processing company ADP, at a cafe on the corner of Bidwell Parkway and Elmwood Avenue. 

Richardson and her colleagues at ADP have access to gobs of data about jobs, wages and workers. Almost a year ago, when it became clear that inflation might not be so transitory after all, Ryssdal and Richardson started talking about where we could go to tell the story of this economic moment. One city they talked about was Buffalo. 

“It’s a small market with a growth story, and, to me, that means there’s a hope story here,” Richardson told Ryssdal. “What our data showed us is that this is one of the places where low-wage workers are actually seeing gains.” 

Across the country, wages for low-paid workers have risen faster than wages for higher-paid workers over the past couple of years. Richardson and her colleagues at ADP noticed that trend was particularly prevalent in cities where wages started from a lower level. 

Of the 53 U.S. cities ADP included in an analysis of recent U.S. wage growth, Buffalo was among the clearest examples of this phenomenon.

“Buffalo is one of those places where you just don’t make a lot,” Richardson said. “[But] something happened over the last two years — that very low wage accelerated by 40%.”

For some workers, rising prices have outpaced those gains. “But yeah, there is hope here [in Buffalo] in the sense that low-wage workers are doing better than inflation, and that’s not true everywhere in the country,” said Richardson. 

To see what that looks like on the ground, Ryssdal and Richardson spoke with small business owners along a 1-mile stretch of Elmwood Avenue in Buffalo. 

A Taste of Soul

Khilialah Reese and her restaurant, Taste of Soul, are relatively new to Elmwood Avenue. “I was cooking out [of my] house, and we were selling on Facebook,” Reese told Ryssdal and Richardson. “I took all that money and I bought a food trailer.”

Khilialah Reese, owner of Taste of Soul, a restaurant on Elmwood Avenue in Buffalo, New York. (Photo by Brandon Watson)
Khilialah Reese, owner of Taste of Soul, started out cooking from her house and selling on Facebook. (Photo by Brandon Watson)

Across the country, entrepreneurship spiked during the pandemic. In Erie County, where Buffalo sits, nearly 10,000 new businesses launched last year — a 34% increase from the year before. Now, all those new businesses are coping with rising prices and higher labor costs.

Reese opened her food trailer in early 2020. Eventually, that business grew into this restaurant.

She currently has five employees but said she needs more. “I have a lot of people that want jobs, but they’re saying they want like $19 to $22 an hour — I can’t afford that,” Reese said. 

Campus Wheelworks

Ethan Johnson is one of three co-owners of a bike shop on Elmwood Avenue called Campus Wheelworks. He helped steer the company through the COVID bike boom of 2020 and the supply chain issues that followed.

Ethan Johnson, one of three co-owner of Campus Wheelworks. (Photo by Brandon Watson)
Ethan Johnson of Campus Wheelworks says demand for some products has faltered as prices rise. (Photo by Brandon Watson)

Now the company faces another challenge: inflation. “One of our bikes we sell the most of is a Giant Escape,” Johnson said. “In 2021, it went for $460 and today, exactly a year later, it’s $605.”

Johnson said demand for some products has faltered recently as prices rise. “As we’re talking about how we want to evolve and recover from the situation we’re in now, we want to drive more of our business into the service part of our shop rather than the sales side,” he said.

An employee works in the service section of Campus Wheelworks on Elmwood Avenue (Photo by Brandon Watson)
An employee works in the service section of Campus Wheelworks on Elmwood Avenue. (Photo by Brandon Watson)

Everything Elmwood

Another mainstay of Elmwood Avenue’s small business community is Everything Elmwood, a retail shop one door down from Campus Wheelworks.

Gary and Kelly La Martina opened it in the 1980s when they were both in their early 20s. “We’ve kind of grown up based on what customers tell us they need and what they like,” said Gary La Martina. 

Gary and Kelly La Martina, co-owners of Everything Elmwood, a retail store in Buffalo, NY
“In order to survive, we restricted our hours,” says Gary La Martina, with his wife, Kelly La Marina, above. (Photo by Brandon Watson)

Today, the store sells a wide assortment of gifts, jewelry, clothing, cards, coffee table books and more. In the 40 years they’ve been in business, the La Martinas have seen the street change around them. 

Recently, Everything Elmwood has struggled with staffing issues, high freight costs, and shrinking demand. “The customer base has kind of dwindled down a bit,” Gary said. “In order to survive, we restricted our hours.” 

After the onset of the pandemic, Gary and Kelly La Martina struggled to source inventory for their gift shop, Everything Elmwood. (Photo by Brandon Watson)
After the onset of the pandemic, the La Martinas struggled to source inventory for their gift shop. (Photo by Brandon Watson)

Put a Plant on It

Across the street from Campus Wheelworks and Everything Elmwood, Johanna Dominguez runs a store called Put a Plant on It. 

“I have never seen this many plants in my life,” Ryssdal said after walking inside. “This is actually a bit low for us,” Dominguez laughed. “We often have a lot more.”

Johanna Dominguez, owner of Put a Plant on It. (Photo by Brandon Watson)
“At the end of the day, plants are a luxury item,” says Johanna Dominguez, owner of Put a Plant on It. (Photo by Brandon Watson)

The store’s checkout counter sits behind a maze of living inventory. A humidifier pumps steam into the air. Pretty much every surface in the 1,000-square-foot retail space is occupied. 

“At the end of the day, plants are a luxury item,” Dominguez said. “A lot of people, I think, are willing to spend more money on an experience, and that’s one thing we work hard to give people here.”

Put a Plant on It is stuffed with living inventory
Put a Plant on It is stuffed with living inventory. (Photo by Brandon Watson)

Put a Plant on It opened during the summer of 2020. Dominguez said she’d been eyeing the location for a while and jumped at the opportunity when it became available. “I took that as a sign that maybe I should do something crazy and open up a business in the middle of a pandemic,” she said.

Click the audio player above to hear Ryssdal and Richardson’s conversations with Elmwood Avenue small business owners.

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