Shedding the `rust belt' image in much-maligned Buffalo, N.Y.. The once-flourishing transport city waits for economic upturn

The bright orange construction fences are down and the mounds of dirt are much lower on Buffalo's Main Street, where a not-quite-finished light-rail system has finally started carrying passengers. The transit line, touted as a way to bring people into the economically depressed Buffalo downtown, has brought some optimism. But there is still a sense of waiting in this once flush Northeast city.

At the turn of the century, Buffalo was a major manufacturing and grain town, as well as a transportation hub as the eastern-most port on the Great Lakes. Today it is a rust-belt city working hard to find a new identity as the hulking steel mills and grain mills sit quietly on its periphery.

Once the city's largest export was steel; in recent years it has been young people, a county political leader says.

Unemployment is still high, and few expect Buffalo to regain its former status. Mark McCarthy sells hot dogs, brownies, and hot apple cider from a cart directly in front of the new transit system near a Woolworth's store. He watches the ebb and flow of people.

``I cannot see [downtown Buffalo] improving,'' says Mr. McCarthy, who'd like to keep his stand open on weekends but says that people do not come downtown then. ``It's dying.''

Others see improvement on the way.

``Business has been going down,'' says Carmine Middione from inside the newsstand he has run for 11 years on the corner of Main and Court. ``But in the latter part of next year, when the [light transit] is finished, it will be a lot better. The economy is holding firm.''

Experts generally agree that the Buffalo area is making the transition from a depressed rust-belt economy.

``I think most of our `rust' is gone,'' says George Smyntek, an economist with the New York State Department of Labor. ``We are due for a period of stability.''

The key to stabilizing the economy in the area, say experts, is adaptability. Even while large employers such as Bethlehem Steel were closing shop, Buffalo was slowly but steadily gaining jobs in service and trade industry.

The State University of New York (SUNY) at Buffalo has helped tackle the dilemma through retraining programs and new projects such as an earthquake research center.

The Western New York Economic Development Corporation promotes the area's cheap hydroelectrical power and rich cultural life. And even union officials emphasize cooperation with city business leaders rather than rattling sabers over wages.

``Buffalo was a heavy-industrial city, and that's gone pretty well down the drain,'' says businessman Dick Collard of Willard Machine Corporation.

But at a Rotary luncheon, he also points to local successes. Mr. Collard picks up a small container of dairy creamer on the table.

``See that! Rich Products - he's a member of the Rotary,'' Collard says.

``We were at a moment of almost disaster,'' says Geraldine Kogler, associate director of the Regional Economic Assistance Center at SUNY. ``Now we are at a leveling off, almost a decision point.''

She sees mature industries - those that have stayed - trying to become more effective. And she says there is a boom of newer, entrepreneurial firms in fields like health research. A high-tech ``incubator'' at SUNY has spawned 17 new companies.

During the 1970s, Buffalo's manufacturing base declined while the service sector grew, so employment was flat. At the same time, a large number of baby-boomers and women began looking for jobs.

``The job market couldn't absorb them,'' says Mr. Smyntek. ``People moved to other areas that were growing.''

Between 1970 and 1980, the Buffalo region's population went from 1.349 million to 1.242 million. The decline continued, according to the US Census Bureau's 1985 population estimates, but the rate has slowed.

Because of two recessions since 1980, the number of manufacturing jobs has continued to disappear. In 1980, according to state figures, there were 133,500 manufacturing jobs. In 1985, there were 103,200.

And thus unemployment rates in the area have been mercurial. In 1974, the Buffalo region had 6.8 percent unemployment. It edged up to 9.7 percent in '80, and hit a high of 12 percent during the 1983 recession. People dropped out of the job market or left the area.

But the national recovery also had an effect in Buffalo, and the manufacturing base has been relatively steady since 1983.

The number of people in the labor force has risen steadily since April 1985, with the largest increases in the trade and service industries. Unemployment in September was 7.3 percent.

But as Smyntek points out, workers displaced from the heavy-manufacturing sectors have a hard time transferring their skills to other jobs, and structural unemployment is always higher than numbers indicate. There are fewer blue-collar jobs left, and many of these workers can only find jobs at fast-food wages.

George L. Wessel, president of the Buffalo AFL-CIO council, says people are not starving. But he feels sorry for workers over 50, who lost lucrative jobs at big plants and are not able to find work at commensurate wages. He points to people in the building trades who have been commuting to places like New York City to find work.

``When you get a job, it's only part-time,'' says one jobless steel worker in Lackawana, just south of Buffalo.

In addition to very real economic problems, Buffalo has had to put up with a national image problem. Johnny Carson makes jokes about the town, and most outsiders visualize snow and more snow when they hear Buffalo mentioned.

But those who have not left for other areas - and those who have come back - point with pride to the people of Buffalo, and the high quality of life. There is sailing on Lake Erie, the very respected Albright Knox Gallery, visiting artists an hour away in Chatauqua, N.Y., and pro sports teams.

Gerald M. Goldhaber, chairman of the department of communications at SUNY Buffalo, says the town needs to sell itself with what it has to offer. ``We are not Boston or Toronto, and we're not going to be,'' he says, ``But I think it's a great place to live.''