From 1900 to 1960, employment in New York State grew slightly faster than in the rest of the nation, but since 1960 it has lagged substantially behind the national rate. This slowdown in employment growth has created many short-term problems and has serious implications for long-range planning of state policy. This chapter will compare the employment growth trend in New York State to that in the United States as a whole and to those of other geographic regions. These comparisons will provide some perspective on the underlying nature of the growth problem in the state. In the last section in this chapter, we will present the results of a study of the increasing industrial diversification among the states and regions of the United States. These results indicate a trend toward greater diversity among state economies. Several possible explanations for this trend are identified, and the implications for New York State are discussed. Finally, the chapter concludes with a brief survey of the policy alternatives available to the state in light of our conclusions about the long-run nature of the employment problem.