Transcript Imperial Valley 2007 … Economic Growth … Here It Comes!

Kern County . . .
Economic Strength & Key Issues
John Husing, Ph.D.
Economics & Politics, Inc.
Chief Economist, IEEP
After Losing 8.71 Million Jobs …
U.S. Jobs Almost All The Way Back
California Economic Cycle
2008-2010
-1,066,400
2011-2014
+1,315,558
2014 Up 2.0%
+287,726
Kern County: Job Growth Far More
Than Double The Recession Loss
2010-2014e = +40,171
Two Ways Economies Grow
1. Gold Mine Theory … Historic Scenario
Secondary Tier
Primary Tier
Growth of Economic Base: Jobs
Economic Base:
Changing Importance
Falling
Rising
Kern County Ranked 3rd In U.S.
Petroleum Production, 2013
Oil & Natural Gas Production
Declining
143.2
141.7
150.2
143.3
159.9
148.1
139.3
Natural Gas (mcf)
154.8
154.5
162.3
165.0
166.2
178.6
170.2
179.7
176.7
184.8
185.2
193.1
Oil (bbl)
191.6
209.5
198.8
221.9
200.9
220.0
209.0
216.4
Millions
209.8
Oil & Natrual Gas Production
Kern & Tulare Counties, 1999-2012
Fracking?
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
Source: CA Department of Convervation, Oil & Gas Division
2010
2011
2012
Oil Prices Plunging:
Fracking Targeted by Saudis?
Key Need: Work With Moderate Dems & Reps
to use Poverty Issue to Fight Off
Environmentalists
Military Spending
DOD Civilian Expenditures
2000-2010: 21.5%
CPI:
39.5%
DOD Employment Changes
Key Need: Kevin McCarthy Is
House Whip – Protect Local Sector
Kern County Agriculture Soaring
Huge Increase in Value of Kern
County Agricultural Production
2000-2013: up $4.56 Billion
206.4% v. 39.5% Inflation
Key Needs: CA Water Policy;
U.S. Trade Policy
2.“Dirt” … Beginning Scenario!
A. Affordable Housing & Population Serving Jobs
Kern County
Kern Co. Home Price Advantage
BUILD FREEWAYS & THEY’LL COME
Don’t Build Them & They’ll Come
Anyway!
New Home Permits: Nearing 1990s Levels
CA Regulatory Policy (CEQA) Hampers Job Growth
Population Growth: Recovery Gaining
Speed
2010-2014
Kern Co. up 4.0%
California up 2.9%
Home Sales Flat
Median Home Prices:
Strengthening
Key Need: Work With Moderate Dems & Reps Using
Poverty Argument to Reform CEQA
Taxable Trade: Spectacular!
40% Beyond
Pre-Recession Peak
Taxable Sales Growth Rates
Key Need: Potential Retail Sales Thru
e-Commerce Fulfillment Centers
Industrial Growth
Location
Industrial Market – 3rd Tightest
In Surrounding Markets
Industrial Lease Rates
Third Least Expensive of Nearby Markets
750,000 Sq. Ft.: Kern Co. Would Lease for $3.60 million a year. In L.A. County, it would be $5.58
million. Kern Co. would be -$1.98 million or -35.5% less expensive.
Mfg. & Logistics Workers Are Paid
Less Than In L.A., More Than Most Nearby Areas
California Just 1.3% of
U.S. ManuNeeduring Job Growth
CA Regulatory Policy Has Essentially Stopped
ManuNeeduring Growth
Key Need: Work With Moderate Dems & Reps Using
Poverty Argument For Regulatory Reform
Logistics
Los Angeles
Long Beach
Panama Looks Like Less Of An Issue Than It Has
Deep Water Ports Handle
Largest Ships
Best Land Side Infrastructure At Ports
So. California’s Goods Handling Complex
Alameda Corridor
Interstate Rail
High Tech Warehousing
I-5 & SR 58
National Rail & Highway Links
Port Container Volumes
Fulfillment Centers
E-Commerce Growth Rates
Year Over Year by Quarter
Beware: CA Regulators Now Plan To Reduce Truck
Trips By Impacting Logistics Growth
Key Need: Work With Moderate Dems & Reps Using
Poverty Argument For Regulatory Reform
Office Market
One of the Tightest Office Market
In The U.S.
Office Lease Rates: Low
Physician Coverage
An Issue In Many Places
Health Care Demand Set To Explode
People Without Health Insurance (2013)
155,955 (18.7%)
People Will Age, Already 55 & Over
168,289 (19.5%)
Population Growth Will Resume (2000-14) 211,439 (32.0%)
Key Need: Work With Moderate Dems & Reps Using
Poverty Argument to Reform CEQA
Attacking Economic Difficulties:
Central Spine of California
Poverty: All People
Poverty: Children Under 18
Adult Education An Issue
Sectors Where Growth Is Needed
• Minimum Education Requirements To Enter The Sector
• Skill Ladders Up Which Workers Can Migrate to Better Paying Jobs by
On The Job Learning or Short Course Training
• Average or Median Pay Scales That Provide Middle Class Life Styles
• Job Growth Occurring
Sectors With High School or Less
Education To Get First Job
Average Pay By Sector
What Is California Regulating To Death
• Mining, Oil & Gas
• Manufacturing
• Construction (CEQA)
• Logistics (Wholesale Trade, Warehousing, Trucking)
In The Name of Public Health:
State Is Cutting Off Job Growth In Sectors Marginally
Educated Workers Need To Move Out of Poverty
BUT …
Poverty A Public Health Issue
1. Socio-Economics (Poverty, Lack of Jobs)
40%
2. Population’s Behaviors Related To Poverty
90%
3. Access to Medical Care An Issue for the Poor
30%
4. Environmental
10%
20%
Source: Different Perspectives For Assigning Weights To Determinants of
Health, University of Wisconsin, Public Health Institute, 2010
Policy Thoughts
1. Regulators Should Include Cumulative Impact On Job Growth When
Impacting Blue Collar Sectors
2. Cost of Regulation Must Include Public Health Costs Imposed by
Stopping Jobs Growth Leading To Middle Class Incomes
3. Allow Fracking As Long As Health Effects Mitigated
4. Reform CEQA
5. Encourage ManuNeeduring By Creating Appeals System Not Controlled
by Regulatory Agencies
6. Have Legislative Analyst’s Office Continuously Looking At Impact of
Regulatory Agencies on Poverty
7. Congress Rein in EPA’s Attempt To Lower CO2 Limits
Attacking Economic Difficulties:
We Need An Inland CA Coalition of Dems & Reps Whose
Residents Are Being Hurt By Regulatory Over-Reach
Kern County Has A Strong Story To Tell
• Strong Base In Petroleum & Natural Gas
• Strong Agricultural Base
• Employment Level Has Recovered From the Great Recession
• Well Placed For North-South Logistics
• Population Growth Speeding Up
• Southern California’s Most Affordable Housing
• Good Labor Costs
• Low Space Costs
• Available Land
www.johnhusing.com