Things are getting better
Three decades ago pop musician Howard Jones released a single whose title came to my mind while writing this column. “Things Can Only Get Better” is the name of that song, which perfectly embodies what Imperial Valley is now registering in terms of economics.
On Thursday, the Southern California Association of Governments, the largest metropolitan organization in our country, released results of a study that highlights economic factors in its member counties. The results depict a hopeful picture in terms of employment, poverty and business.
The report, prepared by Development Management Group, indicates that despite socioeconomic challenges due to the limited job opportunities in high wage industries and job-related transportation, investments in renewable energy and the EB5 visa program have helped the local economy. Green energy investment, in particular, has put the Valley second in California with 7,320 gigawatt hours, half of what is produced in Kern County and ahead of Riverside County. Our area has the potential to attract up to $20 billion in green energy investment in the next decade.
Meanwhile, the county’s gross domestic product has reached a record of $6 billion. Per capita GDP is around $31,000, comparable to South Korea, Spain and Italy. In terms of job opportunities, the study reports there has been an increase in the local labor force with the addition of Mexicali residents since the Great Recession, while local residents are emigrating to other areas where job opportunities are blossoming due to the economic expansion.
The association says healthcare, management, personal care, sales and transportation are the best labor areas in terms of total job opportunities. Healthcare, business and finance, as well as elementary school teachers, registered nurses, correctional officers and office managers are the opportunities with the best salaries.
Even though agriculture will remain as the main economic driver, this sector must address challenges like the minimum wage increases, a potential water transfer to San Diego, transportation costs and drought conditions in other areas of the state that might lead to an increased automation of production or emigration to Arizona and Mexico.
Another challenge is the trade war with China, which impacts seed production while purchasers from overseas are seeking other markets, which is increasing inventory and reducing prices. Livestock is also suffering due to price decline.
Thanks to the raise in the minimum wage and the opening of better job opportunities, household income increased 16 percent this year to $49,371. The percentage of residents with incomes above $150,000 doubled from 3 percent to 7.68 percent while households with incomes below $50,000 decreased from 56.31 percent to 50.44 percent. At the same time, poverty has decreased 10 percent.
Personal income has also increased 8 percent in the last year. However, residents without a high school diploma a lagging badly in income compared to those with a high school or college education. Currently, 31 percent of Valley residents 25 years and older lack a high school diploma, and 25 percent have only a high school diploma. Those in the former group have lost an average of $200 per year in income since 2008, while those in the latter have reported an average increase of $4,100. Projected over four decades, the gap will reach $160,000.
The report also says that the housing industry has remained stable, with construction, prices and sales steady, while foreclosure has decreased to a minimum.
In the meantime, property values have reached a record $12.8 billion and taxable sales were $2.7 billion.
Nevertheless, the Valley’s economy is stable, but not thriving, the report says. “There are no real factors that are driving real growth, and the region can be described as economically treading water.”
Continued progress is necessary if the local economy is to avoid being pulled into the undertow by a future recession.