The hundreds of businesspeople, academics, and politicians who gathered to hear the UCSB economic forecast at Cal Poly the week before Thanksgiving are doing all right, at least by the looks of them.
"Aside from students perhaps, there's nobody in this room who makes less than $25,000," Bill Watkins, director of the forecast and headliner for the event, observed while talking about the salary spread in the county. He wondered aloud how anybody could make it in the area at that income level.
The county's median family income, according to the report, is $51,978.
While Watkins, an entertaining and quick speaker, worked to highlight the glimmers of good news amid the declining real estate market, sagging government sector, and generally stagnant local economy ("I'm here to tell you things aren't as bad as you think they are," he said), the weight from the day's slides and speakers seemed to indicate particularly bad news for those at the lower--or even average--end of the economic spectrum.
Consider this basket of economic fruits offered in the forecast:
Rents in SLO County have skyrocketed in recent months. Countywide, rents have gone up more than 11 percent in only six months. (One speaker, real estate economist Kirk Lesh, described that fact as potential good news for the real estate sector, noting that eventually rents will be so high people will decide to buy houses again.)
The only place that jobs are actually growing is in the tourism and retail economies. Both are areas in which low salaries prevail.
Two important demographic sectors--people younger than 15 and people between the ages of 35 and 45 (in other words, kids and their parents)--are fleeing the county. Their places are being filled by people older than 45, many of them retiring Baby Boomers. As the forecast notes, "It appears that the primary reasons for this migration are the high cost of housing and limited economic opportunity in Coastal California."
Real median family income in San Luis Obispo County has declined for three straight years, and the forecast sees that continuing in 2008 and 2009.
Economic growth overall in the county, even though 2008 is supposed to be better than 2007, is expected to lag behind that of the state and nation.
The second-largest private sector employer in the entire county is Albertsons, a grocery store. (PG&E is the tops, and they recently announced large layoffs locally.)
The state's overall budget prospects are dim, and if history is a guide, Sacramento is likely to turn to local and county budgets to help balance its own.
"Are you depressed now?" Watkins asked the crowd at one point.
All of those unpleasant facts are on top of whatever problems there are with California's high housing and living costs.
Wendell Cox of the Heartland Institute, who jousted over smart growth policies in a presentation with Cal Poly's Dean of the College of Architecture and Environmental Design Tom Jones, said there's essentially a $1-million bonus, over the course of a person's lifetime, to move from California to a lower-cost area such as Indiana.
None of those facts quashed Watkins' overall enthusiasm, however. He predicted 2.1 percent growth in 2008 for the county and slightly higher growth in the following years. The engine for that growth will be in the North County, especially Paso Robles.
In fact, several of the speakers worked to point out signs of hope in what seemed to be largely depressing statistics. Lesh, for example, noted that while foreclosure rates have spiked in SLO, they aren't as high as in the state or the nation.
Admittedly, he was giving his first major talk after only two months on the job as the project's real estate economist.
"I don't want to be doom and gloom or it might be my last talk," he said.
There was a lot of talk about being in "uncharted waters" and how "the confidence interval has grown" (in other words, they're less confident), but perhaps the good news in the report is that economic forecasting is an inexact science. The previous annual forecast had predicted a 2.8 percent rate of growth. Instead, it was .09 percent.
Managing Editor Patrick Howe can be reached at email@example.com.