Actually, the city's share of the state's PRIVATE economy is up at a post-1970, over 60 percent. Then you'd have to add it the earnings of suburbanites that depend on the spending of commuters.
More specifically, the income that supports the state's tax base is concentrated in Manhattan, although the people earning the income may live on Long Island (or in Brooklyn). When that goes down, there is little else out there to pick up the slack. The independent suburban economic base has shunk (Gruman's about gone, not too many Baymen and Potato farms left) and Upstate has about the weakest economy in the U.S.
That's something we wonder about all the time. Unemployment is low, the population is aging, and no one wants to move or start a business there. It's certainly cheap enough. Housing prices are 50 percent below the U.S. average.