UC Riverside report has mixed news regarding jobs in the IE

By on December 11, 2017
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The good news is that the region has a lot of jobs and its economy is growing. The other half of the equation is that a lot of those jobs don’t pay well compared with other parts of the country.

Maybe the Inland Empire’s economic development agencies, and their respective cities, should try to develop a downtown area in the two-county region.

If they did, it might improve the region’s economy and make it a more attractive place to live, according to a study released by the UC Riverside School of Business Center for Economic Forecasting and Development.

That report, Job Concentration and the Inland Empire, uncovered some positive aspects about the two-county region’s economy. It’s the 13th largest metropolitan statistical area in the United States, with a population of approximately 4.5 million people.

It’s also one of the fastest-growing markets in the United States, having gone from the 23rd largest MSA in the country to its present ranking. Only Phoenix grew as fast during that time, according to the report.

The Inland Empire is also the 19th largest private sector employment market in the country, between San Francisco and Baltimore, with nearly 1.1 million payroll employees

Overall, the Riverside-San Bernardino County market is one of the largest and fasting growing economies in the United States, similar to Houston and Washington D.C. in economic growth, the report concluded.

But the Inland economy isn’t as solid as it appears to be. In the words of the report, the Inland Empire “is a large economy but doesn’t look like one.”

Yes, the Inland region has jobs, but many of those jobs don’t pay well: the average annual wage for a private sector job in the two-county region is less than $40,000, the lowest of any major submarket in the United States.

Also, the Inland Empire is too spread out, with no heavily populated urban core – a downtown – that attracts major employers. In most major metropolitan areas, high-income job sectors – professional services, finance, information technology – are located in populated areas that have high job density.

“The [Inland] region has not attained the same urban status as other places,” the report stated. “It does not have the name recognition that similarly ranked cities have, it’s not considered its own media market and you would be hard pressed to find the region included in lists of top cities to live, start or relocate a business.”

In raw numbers, the Inland Empire averages 647 jobs per square kilometer, which is the lowest job concentration rate among the country’s 48 largest economies. By comparison, Denver and San Diego average more than 2,000 jobs per square kilometer.

The report also found that, among the country’s 25 top employment markets, the Inland Empire is the only one that doesn’t have at least one major league sports franchise.

“In the words of Rodney Dangerfield, the Inland Empire gets no respect,” the report stated.

The report’s conclusions were not a surprise, said Christopher Thornberg, the center’s director and a founding partner with Beacon Economics in Los Angeles.

“The Inland Empire feels different from other markets, mostly because it doesn’t have a heavily populated downtown area,” said Thornberg, one of the report’s authors. “Orange County used to be the same way before it grew into a large urban market. Now they have big populations in Anaheim, Santa Ana and Newport Beach. The Inland Empire doesn’t have that.”

Much of the Inland Empire is plagued by slow-growth, meaning residents who will fight virtually any new development, even retail that will bring much-needed jobs and services to a community.

That approach, while probably justified in some instances, stunts population growth when it’s aimed at housing and scares away potential businesses.

“People believe the Inland Empire is an easy place to develop something but that’s not always the case,” Thornberg said. “There’s a lot of ‘not in my backyard’ sentiment out here. We have people who go to war trying to stop a Super Walmart. I lived in South Carolina for three years and I learned to love Super Walmart, because I could get anything I wanted there.”

Another factor that hurts the Inland Empire is its preponderance of warehouse-distribution and retail jobs, both of which tend to be low-paying and often temporary, the report noted.

At least one local economist agrees.

“I think that has more to do with [low-paying jobs] than not having a downtown,” said Jay Prag,  professor of economics and finance at the Drucker School of Management at Claremont Graduate University. “One of the biggest industries we have is logistics, and it’s a fact that a lot of logistics jobs are temporary.

“That’s not as good as having something permanent, but it’s better than not having any job. So it’s bittersweet.”