Ranking as New York’s seventh-largest employer, the University of Rochester, with some 32,000 workers on its payroll, employs more people in the state than Walmart, McDonalds or Home Depot.
That’s according to a just-released Center for Governmental Research study titled “University of Rochester & Affiliates New York State Economic Impact 2019” that traces UR’s impact on the local and state’s economy. (The annual report’s longtime compiler, CGR chief economist Kent Gardner, is a founding member and opinion editor of the Rochester Beacon and is a regular contributor to this publication.)
Based on 2019 data, the CGR study is the most recent in a series of annual reports on the university’s economic impact that CGR has done for the university since 2006, the first year UR outpaced Eastman Kodak as the Rochester region’s largest employer. It is a title the university has held since then.
It is a measure of how much and in what directions the local and state economies have shifted over that decade and a half that Kodak, which employed 50,000 in 2006 and now employs 4,500, does not appear on CGR’s 20-largest New York employers list.
Primarily due to manufacturing jobs like the ones Kodak and other local manufacturers, including Xerox Corp. and Bausch & Lomb Inc., shed, employment growth in the Rochester area had been weak for the previous five years, the U.S. Housing and Urban Development Department noted in a 2016 report. The region’s education and health care sectors picked some of the slack but left the area with relatively weak payroll growth—0.3 percent here versus 1.8 percent for the country as a whole, the HUD report found.
The news is not all bad, however, the CGR study finds. UR is a complex whose Medical Center includes the area’s largest health care system, medical, dental and nursing schools, and extensive research facilities. Along with the university’s smaller River Campus, the private university directly pays $2.2 billion in wages and spreads wealth indirectly in a number of ways.
Between 2014 and 2019, for example, UR spent an annual average of $324 million on capital projects including upgrades to facilities and new construction. Such projects translated to 4,300 jobs and added $327 million to area payrolls, CGR estimates.
Spending by UR students, many of whom come from outside the region, injects tens of millions of dollars a year among area businesses and supports thousands of jobs. According to CGR, UR students’ spending totaled $88 million in 2019 and supported 2,460 jobs.
URMC’s extensive research facilities bring many dollars in grant money into the community, $412 million in 2019 and an average of an average of $425 million every year since 2005 for a total of $6.4 billion in inflation-adjusted dollars between 2005 and 2019, the CGR study found.
Still, as the region’s overall employment base shifted away from a high-paying manufacturing sector to usually lower-paying service sectors, poverty in the region, especially in the city of Rochester, increased.
Between 2013 and 2017, the city’s poverty rate increased from 32.8 percent to 33.1 percent, moving Rochester from the fourth most impoverished among the top 75 U.S. metropolitan areas to third place, the Rochester Monroe Anti-Poverty Initiative’s 2018 report shows.
UR is doing its part to address such issues, says Peter Robinson, UR vice president of government and community relations. The university, for example, has a program that looks to steer purchases to qualified minority- and woman-owned businesses.
In the purchasing initiative, says Robinson, “what we really want to do … is to ensure that we’re putting our purchasing power back into the local economy wherever possible. That’s going to broadly benefit everyone in the community, but I think it’s going to especially benefit minority communities.”
Robinson adds that the university also provides subsidies to help employees who are first-time home buyers purchase homes in the city, especially in areas with high concentrations of African American and Hispanic residents. Local banks and the city of Rochester also chip in to help such purchasers make down payments. So far, the program has helped 500 buyers move from renting to home ownership in the city, Robinson says.
Not specifically represented or detailed in the CGR study is the extent of the gap between wages earned by UR employees like doctors, researchers, professors and administrators and lower-paid employees like clerical and janitorial workers and hospital staff.
UR, which recently instituted a $15-an-hour minimum wage, is trying to address that divide, Robinson says.
“The minimum wage is actually a starting point,” the UR vice president explains. “Obviously, the minimum wage can’t be static. We are going to continue to move that along as consumer prices go up, so that we don’t end up with this huge gap that becomes very costly to overcome.”
In addition, says Robinson, the university tries to see entry-level, minimum-wage workers as potentially stepping onto the bottom rung of a career ladder.
“What we need to do, and what we are committed to doing is creating career ladders for people we bring into the organization,” Robinson says. “For people who come in with fewer skills and are in less-skilled positions initially, we’re going to be offering educational pathways that are supported by the institution and opportunities to move into professional positions.”
UR’s Employment Impact (thousands of jobs)
The direct benefits the university brings in wages paid to its workers and the indirect benefits in “spillover” spending also benefit local and state governments, which collect income and sales taxes from UR employees, money spent by students and from workers by businesses that serve UR. According to CGR, UR generated nearly $300 million in sales and income-tax payments including $187.5 million directly attributable to the university and $114.6 million in “spillover” payments.
An owner of hundreds of millions of dollars’ worth of local real estate, UR has so far not agreed to make payments in lieu of taxes to local governments as do some nonprofits. And for the foreseeable future, the university intends to keep its policy of general abstention from such payments, Robinson says.
Such payments, known as PILOTs, says Robinson, are not “an approach that, we believe, is the appropriate way for a not-for-profit institution to make contributions back to the community.”
He adds that “raising the wages of low-paid employees seems to me a much more direct way, addressing the needs of the city’s population, (as well as) our purchasing strategies and services we provide in the city of Rochester. (UR is making) a significant effort to increase the presence of health care services in the city. Our investments and support of the city are really done through our mission of providing health care, providing education and our research programs.”
Will Astor is Rochester Beacon senior writer.