22 Cities like Utica, N.Y., prime for a double-dip recession
"With chances of a national double-dip recession now estimated at about one in four, several metro areas will probably experience their own downturns in the first half of 2011," said economist Andrew Gledhill, who wrote the report.
Gledhill identified the 22 markets listed below as having the biggest chance of a double-dip recession because their economies are linked to manufacturing or they've lost whatever industry it was that created the city to begin with.
I've lived in a couple of these cities, and I was the editor of the daily newspaper, the Observer-Dispatch in Utica-Rome, N.Y., for several years. During that time -- about 15 years ago -- I got to know the region's problems well. I suspect that they are no different today than they were then, and that they are probably similar to those facing the other 21 cities on this list.
Utica is a scenic area on the edge of the Adirondack Mountains. The skiing is great. When I lived there, there was even a municipal ski hill with a little lift in the middle of town. My children loved it. But the city schools were a physical and educational disaster. The suburban schools -- a few hundred yards out of the city -- were OK -- not as good as the schools my kids attended in New Jersey, but good enough, in large part because parents were involved and cared.
There were almost no good jobs in the area and the reasons were more complex than you might have suspected. One big problem was that businesses were loathe to locate there because they couldn't attract skilled employees willing to live in the area. It was too isolated, too cold and too expensive.
Property taxes on my very ordinary $125,000 house were more than $6,000 a year and garbage pickup was extra. Sales taxes levied on everything were 8.5%. State taxes were almost 9%.
When I left to take a job elsewhere, I couldn't sell my house. I still owned it seven years later when I accepted an offer that was $35,000 less than I paid. And that was in 2003, when the rest of the country was enjoying a housing boom.
Could smart people turn Utica-Rome around? Maybe. Certainly, the high-speed rail line from New York City that has been discussed off and on for at least three decades would make the area less isolated and potentially more attractive. But when there's not enough money -- despite high taxes -- to keep the roads in good repair and scrape the 125 or so inches of snow off of them every year, the possibility of high-tech investment seems unlikely.
Here's what Moody's said about the rest of these troubled areas.
- Missoula, Mont. - Western city with a timber industry highly exposed to domestic housing market
- Salem, Ore. - Western city with dependence on timber and food-processing industries
- Idaho Falls, Idaho - Western city with a high reliance on government funding
- Lake County-Kenosha County, Ill.-Wisc. - a rust belt city with exposure to manufacturing
- Lafayette, Ind. - Rust belt city with limited industrial diversity
- Wichita, Kan. - low industrial diversity and below-average earnings
- Hot Springs, Ark. - resort city with a shortage of well-educated workers
- Pine Bluff, Ark. - Southern city with negative migration trends and no clear economic driver
- Little Rock, Ark. - Southern city with no clear economic driver
- Wichita Falls, Texas - poor demographic trends and exposure to the energy industry
- Akron, Ohio - Midwestern city with poor population trends and exposure to rubber and plastic industries
- Charleston, W. Va. - Mining center with low education levels
- Macon, Ga. - Southern city with exposure to manufacturing
- Gadsden, Ala. - Southern city with exposure to manufacturing
- Gulfport-Biloxi, Miss. - Tourist city, hurting after hurricanes and oil spill
- Mobile, Ala. - Southern city with a low-skilled workforce and high consumer debt
- Lebanon, Pa. - Mid-Atlantic city with low education levels and an aging workforce
- Springfield, Ohio - Midwestern city with a declining population and heavy exposure to energy-intensive manufacturing
- Wilmington, N.C. - beach town with high economic volatility and low-paying jobs
- Anderson, S.C. - Southern city with low education levels and exposure to manufacturing
- Athens-Clark County Ga. - Southern city with exposure to manufacturing