“And which retirement plan do you want?” Retirement?!! As a newly appointed Assistant Professor of Economics at Potsdam College of SUNY, I was 28 and starting my first real professional job. I was being asked to make a decision that would have little impact on my life for 37 years.
I was offered two options: The first was the NYS Employee Retirement System (ERS). If I stayed in state service and retired at age 65, I would be eligible for annual benefits equal to 70.5% of my final average salary (defined as the highest salary earned in three consecutive years). My contribution would have been 3% of salary for the first ten years. The remainder of the cost would be paid by the state. This is what is called a “defined benefit” retirement plan. Regardless of what happens to the invested money, NYS promises to pay out a specified benefit for as long as I live. Read more »
In Triumph of the City, Harvard economist Ed Glaeser attempts to explain why some cities—think New York or London or Bangalore—have prospered, even as the cost of communication has plummeted. The “death of distance” suggests the death of cities. Why do some defy the prognosis?
Glaeser reminds us that cities are “density, proximity, closeness. . . . [T]heir success depends on the demand for physical closeness.” He asserts that electronic communication is not a substitute for face-to-face contact (a proposition anyone who has endured a few conference calls will accept). Even sophisticated “virtual meeting” suites fall short. (Maybe it looks like Nathan is in the same room, but you can’t go out for a beer after the meeting.) Read more »
Despite issues weighing down the US economy –fiscal stress in Europe, continued high unemployment, and gridlock over federal fiscal policy – the Rochester, NY economy is a bit of a success story. As summarized in a recent Wall Street Journal article, Rochester, “ticks many of the standard Rust Belt boxes” yet has held relatively steady through the recession.
As a participant in the Rochester Downtown Rotary’s annual economic forecast luncheon, I was pleasantly surprised by the generally upbeat expectations of my fellow panelists. Moderated by Sandy Parker, head of the Rochester Business Alliance, it included Steve Babbitt, chairman of the board of the Greater Rochester Association of Realtors; Brad McAreavy, president of the Rochester Auto Dealers’ Association; and Clayton Millard, first vice president of wealth management at Merrill Lynch.
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“What (or whom) should we occupy?” has become shorthand for a bit of communal soul searching. We know that our economy fails to measure up. For some the pain is very personal, “Why can’t I find a job?” or “Must I work so hard for so little?” or “Why can’t employers see what I see in my daughter or my son?” Or one step removed, “What do we do about single moms stuck in a continuing cycle of poverty?”
We want answers. We blame globalization or automation or the school system. Or we blame government or regulation or some shadowy conspiracy. And we blame each other. The Occupy Wall Street movement blames the greed of the rich and powerful and their agents in government. The Tea Party movement blames the power of Big Labor—and their agents in government.
What we want changed depends on who we think is guilty. The Tea Party wants less government. The Occupy movement wants more. Read more »
Last week, we issued a report through Govistics – a project of CGR – ranking U.S. states by average 2010 state worker salaries. New Jersey and New York topped the list, followed by California, Alaska, Maryland and Connecticut. All had average state worker earnings of over $50,000. Indiana, Missouri, West Virginia and the Dakotas rounded out the bottom of the list, with average salaries of less than $35,000. Of the six top-paying states, all but Connecticut saw an increase in state worker pay from 2009 to 2010, with New York state workers seeing a 3.4% increase in their paychecks. Of the bottom five, all but Indiana saw increases in state worker pay.
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Pessimism about the economy comes easily to most of us. We’ve been told that it takes fewer muscles to smile than to frown. Nonsense. Pessimism is our natural state.
And when the Rochester economy outperforms the state consistently over a three-year period, we suspect either mischief or incompetence: Someone at the Department of Labor made a mistake that will soon be discovered. Yet while the rest of the state has been shedding jobs since September 2008, we’ve pretty much held our own here in Rochester. Read more »
Governor Cuomo set November 14 as the deadline for the state’s ten regions to submit economic development strategies. Led by Wegmans CEO Danny Wegman and University of Rochester President Joel Seligman, many in our community are working furiously to articulate plans, goals and measurable objectives.
While we hope to be one of the winning regions—earning a promised $40 million in state support—the process itself has already been valuable. In my 20 years here, I cannot recall a time when leaders of business and government from the Finger Lakes’ nine counties have gathered to talk about what makes our economy successful and what might make it better. The process would have been even more valuable had it been less of a fire drill—a February deadline would have been better, although still ambitious—but we can be proud of the diligent efforts of the Council members and participants in eleven workgroups. The plans they have developed are a testimony to the vitality of particular economic clusters and the many vital economic institutions in the region.
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In its release of 2010 estimates for Monroe County, the Census Bureau confirmed what we perceive: We’re all worse off.
As year-to-year variation is less reliable, I compare the 2010 American Community Survey estimates to the 2000 Census—the “long form.”
- Median household income fell about 20% over the decade. Adjusted for inflation, the 2009 figure reported in the 2010 report—about $45,000—is 78% of the nearly $58,000 figure from 1999.
- Per capita income didn’t decline as much—about 9% to about $27,000 (from an inflation-adjusted $29,000).
- The increased incidence of poverty is also troubling:
- Family poverty rate from 8.2% to 11.1%
- Poverty rate for families with children under 18 rose from 13.1% to 18.6%
- Similarly, persons in poverty rose from 11.2% to 15.4% but children in poverty rose even more, from 15.5% to 22.2%
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Last Christmas my father-in-law asked for investment advice. Folks he’d been reading were recommending gold. “Gold?” I responded. “No, I’d definitely stick with the stock market. Gold is up 30% since the start of 2010—hard to believe it’s going to keep rising. Corporations are profitable. And they’ve got cash. Besides, Congress just passed that payroll tax cut. I’m not placing any bets on 2012 or 2013, but 2011 should be a decent year.”
Good thing I’m spending THIS Christmas with MY family. If you’ve been hiding under a rock, the stock market hasn’t had a good couple of months (although prices were stable or rising until May)—As I write this, the Dow Jones Industrial Average is down 4% since Christmas. And gold? Up 34%.
Growth in employment—already anemic—ground to a halt in August. GDP growth for the second quarter was first estimated at 1.3%, which was mildly depressing this long into a “recovery.” Then it was revised down to 1.0%. Although few indicators have slipped into reverse, none have shifted out of first gear and many, like employment, are slowing, not accelerating.
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It was Governor Cuomo’s father, Mario, who famously declared that you “campaign in poetry, but govern in prose.” Part of the poetry of the campaign was the usual rhetoric around job creation—Candidate Cuomo pledged to focus the resources and energy of the State of New York on the economy, particularly Upstate.
The Regional Economic Development Councils is the vehicle by which Governor Cuomo is translating that bit of campaign poetry into energetic prose. The concept comes partly from Cuomo’s tenure at HUD, partly from a similar venture launched by the first Governor Cuomo in the late 1980s. The concept has merit—by appointing key leaders to ten councils across NYS, he is engaging the state’s leadership in a manner that is largely unprecedented. With Lt Governor Bob Duffy as the chair of every council, he has assured both that council members participate and that the state agency representatives show up and provide support.
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