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Rochester has one of the slowest-growing economies in the country. We ranked second-to-last in a U.S. Conference of Mayor’s report on metro economies. Rochester’s Real Gross Metro Product (GMP) actually shrank .8 percent in 2013. That places us above only Poughkeepsie.

The report predicts our average annual economic growth rate through 2020 will remain painfully slow at 1.7 percent. Employment in Rochester inched up only .5 percent in 2013. The report predicts Rochester will regain its pre-recession employment peak in the third quarter of this year. (We lost 18,500 jobs since 2008!)

City of Rochester Communications Burear

City of Rochester Communications Burear

This poor showing could be explained by something we often hear: “Rochester don’t experience the high highs or the low lows.” One could say we’re doing pretty well, considering the gigantic shift in our economy from one dominated by the Big Three to one dominated by small businesses and health and educational institutions. But at what point does that stop being an excuse?

There are some positives in the report. Rochester still has roughly the same size economy as Buffalo, a larger metro. (Our GMP is $47 billion. Buffalo’s is $47.5 billion. The two metros each have a 3.8 percent share of New York’s Gross State Product.)

Rochester has a sizable economy for a city our size. If Rochester was a country, our economy would be ranked between Ethiopia and Slovenia. If we were a state, our economy would be ranked between North Dakota and South Dakota.

The report notes that metro economies are important:

Metropolitan areas continued to be the beating heart of the US economy in 2013. They were home to 84% of the nation’s population, 86% of total non-farm employment, 87% of total real income, 90% of new housing starts, and 90% of real gross domestic product. And they are expanding: total metropolitan employment climbed by 1.9% last year, real gross product increased by 2.1%, and metropolitan area population rose by 0.9%, with each growth rate faster than that of the US.

Rochester – and other Upstate cities – are clearly not enjoying the same momentum as other metros. Why is growth so slow? What will it take to jump start our economy?

 

Links of the Day:

 

– The number of teen mothers has dropped 40 percent in Rochester.

– A lawsuit is planned in New York to challenge teacher tenure laws. One of the potential plaintiffs lives in Rochester. (In Rochester today, the governor said he had no position on a lawsuit, but said the teacher evaluation system he’s “pushing aggressively” addresses the issue of bad teachers.)

– Rochester has the most homeless school children among Upstate cities.

– Medical marijuana in New York is really complicated. For starters, you have to pay cash. 

– CSX opposes high-speed rail on its tracks.

– Experts question the benefits of going gluten-free for most people. Gluten-free food often has more sugar and less fiber and vitamins.

– Costco has been named the most LGBT company. A Costco store is slated to open in Rochester this fall.

– Wegmans assures Irish minister it will continue to carry Irish foods.

 

Tweets of the Day:

 

 

10 Responses to Rochester: Slow Going

  1. I think the #1 reason is something we can’t change… the weather. Every city on the top 10 is either in the Bay Area, Texas, or the Southeast, all areas with great weather. We have the low cost of living that all the Southeastern cities have and a lot of great stuff to do, but after a winter like the one we just had, I can understand the drive out (to further support this, the whole bottom 10 is in the northeast/ohio except El Paso – across the river from the most dangerous city in North America, and Wichita)

  2. June 25, 2014 at 9:13 am Orielly responds:

    If one travels 90 minutes from here west and crosses the Niagara River and heads to Toronto you will find there are about 50 construction cranes on the route once in Canada. Toronto is booming. Therefore, it would seem that weather has nothing to do with our economic plight.

    Clearly the reason is taxes. With High taxes needed to support lavish public sector retirement plans and with schools that overall rank among the highest in per pupil spend yet have middle of the road performance it looks like we are in bind this state can’t get out of … until these plans are corrected.

    Or the producers in this economy will continue to move out of state to escape taxes for businesses and workers. Our big draw is lots of fresh water and that so for ain’t attracting much.

    • Toronto is one of the southernmost cities with one of the warmest weather in the country that it is in (Vancouver is warmer, but also a lot rainer, but still booming). You can’t compare cities across borders or ignore a clear trend.

      Cost of living simply isn’t a major concern for many young people (otherwise SF, Dallas, and San Jose wouldn’t be booming). And the stats are based on the metro area, and while the RCSD may not be adequate, the suburban school districts around here are some of the best in the nation.

  3. If weather was the reason, Toronto wouldn’t be one of the fastest growing city in North America.

  4. June 25, 2014 at 10:52 am Adrian Martin responds:

    If taxes was the reason, there would be zero construction in Canada.

  5. June 25, 2014 at 2:29 pm theodore kumlander responds:

    High tax’s to support lavish public sector pensions. What a joke! the average public employee has a pension of 22,000 a year. The public employees you are talking about are the Administrator’s when former RCSD school superintendent. Clifford Janey was fired for incompetence he was given a 250,000 bonus. that is the lavish benefits you are talking about.

  6. I think people tend to stay near family and friends. There are still many retirees from the Big Three and smaller supporting businesses. There children grew up here and as long as there is a job for them, they will more than likely stay here. This will keep our economy steady for now. I don’t see any large growth in the future. What would make anyone think that? I don’t see any large manufacturing plants moving here. Health care will continue to be a major job market to service the baby boomers. Once they are gone, we could be in a world of hurt. Social Services also is a big part of our economy. Welfare recepiants and continued immigrant placements here fuel this job market. Of course, these jobs are all paid for by working people’s taxes. As the recepiants of welfare increase in numbers and the tax payers decrease in number, this will also put a hurting to this region. This will never end as the receiver of these benefits will increase in number and will have the edge in voting for politicians that promise free everything. The end is inevitable. You wonder why we are near the bottom in this study…. Be happy we even have an economy.

  7. June 30, 2014 at 9:50 am Shawn Pearsall responds:

    As a long time Monroe County resident and business owner who now resides in Northern NV I can explain this easily. In no certain order

    1) The weather. Period end of story…Toronto is on the North side of the lake and does not get the lake effect clouds, so there’s a huge difference, it’s not the snow and cold, it’s the lack of sun close to six months a year.

    Reno has 265 days a year of sun compared to Rochester’s 160. Reno considers cirrus clouds as “partly cloudy” so it’s close to 300+. 9% humidity in the summer (so when it’s 84 here it feels like 75-80 there)

    2) Taxes. My hopefully sold $200,000 house in Fairport is assessed for $174K. I pay almost $7000 in annual taxes (Schools & Real Estate Combined). My Corporate tax is 6.65%, My State income tax is 9.25%, My sales Tax is 8.5% and we pay high gas taxes, tolls on the Thruway, etc.

    Mt $340,000 home in NV is assessed at $252K. I pay $2500 in annual Taxes. My Corporate & State Income Tax is 0% (Zero, nada, zilch) My sales tax is 7,5 and gas taxes are a bit lower, not much. There are no Toll Roads, No Potholes, No Salt (so you car, brakes, ball joints, tie rods, tires, etc. lasts for ever here) On an annual salary of ~$100K I would anticipate an annual take home saving of approximately $15-20,000 depending on your personal business / employment situation. Pay scales are about equal, healthcare is slight more due to Obamacare provisions.

    3) Hand Up verse Hand Out: Here they work together across many different lines to raise up the community. Not a lot of people asking for help from the Capital. In Rochester (business as well as community) their main avenue of fixing an issue is to ask Albany for help. Government will never be the answer, and the larger you make it, the more the Government will seek to sustain it’s size and shape.

    4) Economic development. Having lived in Rochester since 1980, I was always amazed at how little growth came from the local institutions. Coumo is now starting to push the concept, but seriously it takes Albany to force the issue? Why can’t you see that new ideas spin off from within the educational platforms. Set up incubators, spin ideas off, start kickstarter (google it) funding to take an idea from concept to market.

    I used to go to the annual RIT open house with my son. There they show off projects the students were working on within their class room structures. I saw numerous ideas that could easily be brought to market. When I asked the student what they were going to do with the idea, they all said the same thing (sadly…and seriously) “Oh this was what we did for a project last semester”. One group had a really marketable product, I volunteered my son as a beta tester. The students response was to simply offer the entire project source code to a kid they just met. When I objected and suggested the source code was the item of value, the professor interrupted and actual said this: “It was just a class project”. I never went back.

    The D&C ran a multiple page spread a few years ago, on the economic spin off’s created by the 57 local educational institutions. In their report they actually cited Lawn maintenance, window washing etc as part of the local success. That’s not my idea of economic development folks.

    With mindsets like this, there will be no spin off’s; no technology transference; No new growth for the area.

    You’re in a death spiral. The sooner you realize that Albany, the size of your Government and the lack of infrastructure for getting the new technologies from the lab to the market are your problems, the better fighting chance you’ll have.

    Maybe someone will invent a large fan to blow those lake affect clouds off shore…then you’ll see the light.

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