Report: Rochester among the most 'recession-resistant' cities in the U.S.

A recent report names Rochester one of the top cities in the country when it comes to economic resiliency in the face of a future recession.

Smartasset.com released their yearly rankings for America’s most recession-resistant cities last week, tabulated through nine different metrics to find a final score. Rochester ended up with a final score of 74.8 — good for the 13th best score out of the 264 largest cities in the country.

Employment, housing and social assistance were the three main categories surveyed by Smartasset’s team. Rochester scored well in the first two categories, but was brought out of the top 10 thanks to its “social assistance” score — calculated by factoring in “the percentage of the population relying on public assistance, average annual amount of assistance per household and state rainy-day funds as a percentage of state expenditures.”

Rochester’s ability to weather the worst impacts of a recession was most recently demonstrated in 2008, when the Great Recession gave the United States its worst economic downturn since the 1930s. The city’s unemployment rate rose from 4.1 percent to 6.3 percent during the nineteen months of recession (December 2007 - June 2009), nowhere near matching the national jump in the same timeframe (5 percent - 9.5 percent, before reaching a peak at 10 percent in October ‘09). 

Half of the 12 cities ranking above Rochester are located in Texas (including Frisco, the no. 1 ranked city on the list). Notable Midwestern cities in the top 10 include Cedar Rapids, Iowa (no. 2) and Sioux Falls, South Dakota (no. 10). Rochester was the only Minnesota city in the top 25.

The Clinic’s Impact

A large part of Rochester’s economic stability lies in the stability of its largest employer, Mayo Clinic. Clinic spokeswoman Duska Anastasijevic said the financial crisis of the late ‘aughts’ hurt Mayo’s bottom line, but didn’t deal an incredibly serious blow. 

“The bigger impact to Mayo from the great financial crisis was to our investment portfolio,” said Anastasijevic. “Importantly, however, we did not have liquidity problems and never had to actually sell investments to raise cash. We basically just waited for the markets to go up again, which they did quite sharply beginning in mid-2009.”

Mayo has roughly tripled its annual net income since the peak of the economic downturn,  from $333 million in 2009 to just over $1 billion last year. The Clinic has also expanded its reach through a system of affiliated hospitals known as the Care Network, embarked on joint ventures in England and the United Arab Emirates, signed on to long-term partnerships with tech giants like Boston Scientific and Google, all while taking the first steps toward, perhaps, the most significant initiative yet — the development of a Mayo Clinic platform.

If current financial concerns over coronavirus (mixed an ongoing oil price war) send the American economy back into a tailspin, Anastasijevic says Mayo’s continued growth in the 2010s would better the organization to get through hard times.

“Is Mayo better able to handle a downturn today? From a financial perspective, yes, because we have a much bigger and more liquid balance sheet than we did in 2008,” said Anastasijevic. “From an operating perspective, we can apply the learnings of what strategies worked for us in 2008 and could re-implement the measures that worked well back then.”

Isaac Jahns is a Rochester native and a 2019 graduate of the Missouri School of Journalism. He reports on politics, business and music for Med City Beat.

Cover photo licensed through Getty