Rochester feels the recession, but economy still expands

On a recent afternoon, just a few minutes after Rochester's Community Food Relief opened, the line of people waiting for food stretches out the door. The emergency food center serves leftovers from commercial kitchens to anybody who wants it. There are no restrictions.

"I try and give them at least one sandwich for every person and we go through the fresh stuff first. So, sandwiches, salads, because you can't freeze these," said Aliza Rongstad, who was filling a paper bag with food for a waiting family.

The center is only open for 90 minutes three evenings a week. This January the center provided 3,700 people with a meal. That's 1,000 more than last year.

Lots of people are hurting in Rochester's economy, but it is still growing.

"Point-one percent is still above zero," said Jennifer Ridgeway, a regional economic analyst with the state.

Rochester is comparatively well off in this downturn, Ridgeway said. In the Twin Cities, job growth is down 2.4 percent.

"We're still in a far better position, at least through December, than the state and the nation. We'll see what comes out in January now that we've heard potentially of some layoffs."

Ridgeway is talking about rumored layoffs at IBM. The company has acknowledged jobs cuts are likely, but won't talk about many people will lose their jobs.

More than 4,000 people are employed at the Rochester campus, but IBM's workforce is a small piece of Rochester's economy. Health care employs about one-third of Rochester's workers. The Mayo Clinic is responsible for most of them.

Mayo, meanwhile, is only filling critical positions. Most openings are for nursing and lab tech work, said Shirley Weis, Mayo's Chief Administrative Officer.

"Mayo Clinic has three major missions, patient care: No. 1," she said. "But we have a heavy education and research emphasis also. And in those areas, we're stable or perhaps doing a little down-sizing based on normal attrition at this point in an interview."

Mayo has put off most of its construction and infrastructure projects for this year. About 100 contract and temp workers are being let go, but full-time employees are being kept.

The clinic's patient numbers are steady, but that may change as more people lose work, Weis said.

"There may start to be some softening of demand. As people lose their insurance, they are not as willing to get health care unless it is something really emergent," she said.

That could eventually trickle down to other parts of the Rochester economy like the hotels and restaurants. Seventy-five percent of their business comes from Mayo traffic,said Brad Jones, president of the Convention and Visitors Bureau.

Retail and tourism combined make up the second largest sector of the Rochester economy. Fewer people are coming to Rochester, he said, but those who are, spend more.

"It was a demographic shift, is sort of where we're going," Jones said. "International spending was up. We know people coming from the coasts and a little further away was up."

In late 2008, Saudi Arabian royalty spent more than $1.5 million in town in a week on luxury hotels and car rentals. That spending was nice, but it didn't employ the roofers, snow plow drivers and classroom assistants who have lost their jobs in Rochester.

Those are among the people waiting in line at Rochester's Community Food Relief Center.

Restaurants and hospitals have fewer leftovers to donate, which means the center has fewer meals to hand out, said Sandy Rammage, the center's board president, as she points to her freezers.

"Man, they were just echoing. There were five tubs of mashed potatoes, and a few entrees, that was about it. There was no soup. There was no bread, no sandwiches, no vegetables at all. It was pretty skimpy," she said.

Soon, even in the city with the state's lowest unemployment rate and some continued job growth, people in line for food will be turned away.

Click here to listen to an interview with Mayo Clinic Chief Administrative Officer Shirley Weis who talks about how the non-profit is managing expenses in light of a growing Medicare population.

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