Rochester ranks worst for labor market vitality

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The Wall Street Journal recently published the results of its study of the hottest and coldest job markets in major U.S. metropolitan areas. It was not surprising to see Rochester on the list of struggling cities, but it was certainly dismaying to find that we ranked dead last.

Mark Armbruster

The study looked at recent jobs data for the 53 metro areas with populations greater than 1 million. It included average unemployment rate and labor-force participation rate in 2018 as well as change in employment and labor force for the fourth quarter of 2018 when compared with the previous year. It also looked at the difference in average weekly wage in the first half of 2018 compared with the first half of 2017. Rochester fared poorly in each of these categories.

Buffalo placed second to last, making Upstate New York even worse than Detroit when it comes to job market vibrancy.

Rochester was the smallest of the cities studied, but size didn’t seem to be an important performance factor, as New York City, Philadelphia and Chicago also placed on the wall of shame, among the bottom 10.

The typical scapegoats for these results, depending on your political persuasion, seem to be weather, taxes, or politics. However, none of these were unanimously conclusive.

Many of the hottest job markets were in the hottest climates. Austin ranked best, with San Jose, Orlando, Raleigh, Nashville and Dallas also on the list of the best job markets. However, climate can’t be everything, as colder locales including Salt Lake City, Boston, Seattle and Denver also made the list. Interestingly, New Orleans was the only warm-weather city on the worst performers list.

Most of the states in the best job markets were lower-tax states (including Texas, Florida, North Carolina and Tennessee), and most of the worst job markets were in high-tax states (like New York, Michigan, Pennsylvania, Illinois and Connecticut). However, there were notable exceptions, including Boston and San Jose.

Cities on both the best and worst lists came from a mix of red and blue states, indicating that political affiliation and policies cannot be solely credited or blamed for labor market vibrancy or lack thereof.

While there appears to be no “silver bullet” for why job markets are performing well or not, it is likely the intersection of all these issues, and others, matter. Upstate New York unfortunately is burdened by the trifecta of less desirable climate, high taxes, and political policies that often repel job-creating businesses and cause people to move out of state.

There are certainly exceptions to the doom and gloom, and Rochester has many notable attributes, including proximity to a number of higher education institutions, quality of life, and affordable real estate. However, without job growth, solid compensation, and qualified candidates to fill jobs, the health of our economy will continue to be suspect.

Unfortunately, we as Rochesterians have little control over these issues. Perhaps in time global warming will make our region more desirable, but upstate votes for politicians who will reduce taxes and limit regulation on businesses are dwarfed by downstate votes to the contrary.

That likely means we will continue to lose population, particularly among those who create jobs.

Mark Armbruster is president of Armbruster Capital Management Inc., a registered-investment adviser in Rochester, with $400 million in assets under management. He has given numerous talks on exchange-traded funds, alternative investments, and other financial topics to groups of professional investors and students around the country.

9 thoughts on “Rochester ranks worst for labor market vitality

  1. I find that getting a date in the calendar is the best way to arrange to get together. I generally like to meet for coffee downtown at Java’s at 8:30 am. I believe you live out in Mendon. I can meet for lunch or later in the afternoon in The Burbs. Please suggest several options. also it may be best for us to use email directly. I am at [email protected].

  2. FYI, as a non-profit seeking an Executive Director, we had 174 applicants for the position, many from out of state, the majority from out of the Rochester region — so the story isn’t all bad….

  3. So why don’t you write about what you’re doing to help rather than identify the problems that we all know we have? Absolutely nothing identified was “news.” Not did it pick up on certain nuances and complexities. I’d be more than happy to get together with you and catch up. We’ve met before. It would have to be downtown. Then I could show you the harbingers of change… where the puck is going. I’m tired of people whining and looking in the rearview mirror.

  4. I love the analogy of the burnt area after the fire, with small shoots of promise emerging. The fact is that Rochester has reinvented itself many times over its history, and the fact that it has been a place of invention and social change, with a deeply embedded tradition of arts and culture, bodes well for its future. The physical beauty of the surrounding lakes, mountains and farmlands and it’s historic architecture, and access to all of this are icing on the cake.

  5. If you did a survey of a medieval King’s castle and surrounding serfdom, you’d find the AVERAGE quality of life (income, life expectancy, non-living in pigshit) would be pretty low. Any bimodal curve will average to something likely nonrepresentative, this being a case in point.

    For Rochester, it strikes me as an even more that AVERAGE stats aren’t illustrative, and especially since you have a city where there were a few MAJOR employers that have now (mostly) disappeared. Yes, the average is horrible — and no one should discount that — but if you disaggregate you find certain sectors doing really really badly (Kodak?) and others doing well (Richard’s point).

    Again no one should be happy that the average is bad, it’s a sign that things need to get a lot better. But at the same time let’s discard average estimations, because they obscure the bright spots, and those bright spots are real and growing.

    I think of Rochester as a “devastated ecosystem,” a term of art for ecologists, it describes for example what a forest devastated by a fire looks like. Lots of dead burned debris but with new shoots rising out of the fertile ground that debris eventually creates. If you’re only going to take a birdseye view you’ll see burned logs. Look a bit closer and you’ll see a lot more.

  6. C’mon dude. You’re making me want to shoot myself for living in Rochester.
    As an entrepreneur and innovator, I view problems as challenges to seek solutions for. Numerous cities you identify on the Wall of Shame are doing quite well actually.

    • Richard,

      I have been in Rochester for many years, and I plan on being here for many more. However, the facts are the facts. While there must be reasons we all stay, there is much that could be improved. The first step to finding solutions is to admit that there are problems. Being unabashedly positive is not going to set us on the right path. I suspect the solutions will not come out of Albany, so it will be left to the entrepreneurs and innovators to address our challenges. Being able to identify them and discuss them is part of that process.

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