04/19/23 1

Coachella Valley 2011Competitiveness?

John Husing, Ph.D.

Economics & Politics, Inc.

After Losing 8.36 Million Jobs …U.S. Job Creation Is Crawling Back

+23.1%

VV Pattern of Likely Recovery

UUxx

Fear Causing Consumers Confidence To Dive Again

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So. CA Job Change, 1991-2011e

-488,700 -794,400-9.2%

+4.2%

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Inland Empire Job Change, 1984-2011e

+20,600

-167,900-13.0%

-0.6%

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Coachella Valley, Job Changes

-1,879

-14,121-13.0%

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2nd Worst National Unemployment Rate

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What About the Future?

… Look At Competitiveness

Labor Cost: 6th Lowest of 9 Markets

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Labor Force Quality: 8th Lowest of 9 Markets

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Office Space Cost: 5th Lowest of 9 Markets

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Industrial Space Cost: Lowest of 9 Markets

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Natural Gas: 3rd Lowest of 9 Markets

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Electrical CostHighest of 9 Markets

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Home Prices8th Lowest of 9 Markets

Indio 5th Lowest of 9 Markets

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Water Surprisingly Inexpensive

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State Taxes

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State

Business Income Individual Income Sales Tax Gasoline Property TaxUnemployment Tax

(Avg)

California 8.84% 9.55% 8.25% 46.1 $1,397 3.85%

Oregon 7.90% 9.00% 0.00% 25 $1,167 3.60%

Nevada 0.00% 0.00% 6.85% 33.1 $1,344 2.83%

Arizona 6.97% 4.24% 6.60% 19 $1,139 3.05%

Texas 0.00% 0.00% 6.25% 20 $1,600 4.66%

Colorado 4.63% 4.63% 2.90% 22 $1,322 2.70%

Washington 0.00% 0.00% 6.50% 37.5 $1,257 3.50%

New Mexico 6.40% 4.90% 5.13% 18.8 $589 2.72%

Utah 5.00% 0.00% 5.95% 24.5 $846 4.75%

Highest Highest Highest Highest 2ndHighest

2ndHighest

Policy Conflict:

Environment vs. Jobs

State Regulatory Environment

Public HealthBlue Collar Sectors

Bring Rising Asthma Asthma & & CancerCancer Risk From Airborne Toxics

Social Justice

Blue Collar Sectors Hurt Modest Income Families Living Near

Factories, Rail Yards, Ports, Freeways

California Solution

Single Issue Regulatory Agencies

CA Air Resources Board

South Coast Air Quality Management District

CA Environmental Protection Agency

CA Water Resources Control Board

& More

Two Results1. Air Quality Is Improving

BlueBlue Collar Collar Work Is Much of Our Workforce’s Best Chance To Reach The Middle ClassMiddle Class

2. Downward Pressure On Blue Collar Jobs

Few Training BarriersFew Training Barriers To Beginning Employment

Mining ($96,996) Blue Collar

Manufacturing ($47,933) Blue Collar

Logistics ($46,665) Blue Collar

Wholesale Trade ($43,492) Median Blue Collar

Construction ($41,453) Blue Collar

Retail Trade ($28,840)

Gaming ($28,385)

Hotel/Motel ($24,019)

Agriculture ($22,793)

Eating & Drinking ($15,132)

$13,000 Gap

Results Of Job Suppression

• Unemployment Higher Than It Needs To Be

• Underemployment A Constant Difficulty

• Lack of Access to Jobs Leading to the Middle ClassLeading to the Middle Class

• Health Issues of Poverty

• Divorce

• Spousal Abuse

• Drug & Alcohol Abuse

• Suicide

• Lack of Timely Medical Care

Public Health Issues!

Over 60% Of These Populations Also Stopped Their Educations With High School or Less Schooling

Suppressing Blue Collar Jobs Is Also A Social Justice IssueSocial Justice Issue

Clean Air, Asthma & Cancer

Are Health & SocialHealth & SocialJusticeJustice Issues

Lack of Blue Collar Jobs & Poverty Are

Health & SocialHealth & SocialJusticeJustice Issues

Public Policy Dilemma

After Years Of Focus on Concentrating Solely On The EnvironmentConcentrating Solely On The Environment

Job Creation Is Our Forgotten PriorityForgotten Priority!!

Competitiveness

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Coachella Valley C

California F-

Gold Mine Theory

Primary Tier

Secondary Tier

Economic Base Grades

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•Competitiveness D thanks to CA•Construction•Hotels & Conventions•Tourism•Tourist Shoppers•Agriculture•Clean Tech•Creative Arts•Distribution•Retirees•Health Care•Manufacturing

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Existing Homes Sales Remain Strong … Thanks To Short Sales/ Foreclosures

New Homes Sales Headed For A Record in 2011 … Thanks To Short Sales/ Foreclosures

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Existing Home Prices Stable Between 2002 & 2003 Level

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New Home Price Back To 2004Level … Well Above Existing Homes

Foreclosures Issue1,086,305 HomesIn Inland Empire

35.4%All Homes

Assessed Valuation

… Next Move Is UPUP?

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Soaring CV Housing AffordabilitySets A Record & Drives DemandDemand

64%

14%

Competitive Housing Prices

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Economic Base Grades

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•Competitiveness D thanks to CA•Construction D-•Hotels & Conventions•Tourism•Tourist Shoppers•Agriculture•Clean Tech•Creative Arts•Distribution•Retirees•Health Care•Manufacturing

Wheeler’s Desert Letter

Hotel Rates, Coming Back!

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Corporate Meetings & Conventions Coming Back

2nd quarter 2011 Coachella Valley hotel occupancy up 14.8%

Average room rate up 5.4% Palm Springs Desert Community Convention Bureau

Labor Day hotel occupancy is 25% higher than 2010

Airport Volume Flat

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Need More Flights To Compete With Phoenix-Scottsdale

Increased Tourist Options: Thermal Motor Sports Park

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Retail Sales … Stronger This Year!

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Economic Base Grades

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•Competitiveness D thanks to CA•Construction D-•Hotels & Conventions C+•Tourism C+•Tourist Shoppers C•Agriculture•Clean Tech•Creative Arts•Distribution•Retirees•Health Care•Manufacturing

High Value Crops

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Agricultural Production: A Record

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Economic Base Grades

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•Competitiveness D thanks to CA•Construction D-•Hotels & Conventions C+•Tourism C+•Tourist Shoppers C•Agriculture A•Clean Tech•Creative Arts•Distribution•Health Care•Retirees•Manufacturing

Clean Energy Initiatives

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DemandProperty Assessed Clean Energy

Financing (PACE)Palm Desert Municipal Program

AB 811Net Metering

DevelopmentSkill Training To Work In the

IndustryElectric Vehicle Production

Economic Base Grades

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•Competitiveness D thanks to CA•Construction D-•Hotels & Conventions C+•Tourism C+•Tourist Shoppers C•Agriculture A•Clean Tech C-•Creative Arts•Distribution•Health Care•Retirees•Manufacturing

Creative Arts

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Major Films & Important CommercialsAre Already Shot in the Coachella Valley

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Value of Filming Activity Coachella Valley

  Coachella Valley Riverside Co. Share

2006 $11,892,591 $24,225,500 49.1%

2007 $10,174,750 $15,336,750 66.3%

2008 $11,705,000 $13,551,000 86.4%

2009 $4,732,000 $9,639,200 49.1%

2010 $11,019,500 $16,479,750 66.9%Assumes Coachella Valley equal to lowest share of 2007-2009Source: Inland Empire Film Commission

Economic Base Grades

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•Competitiveness D thanks to CA•Construction D-•Hotels & Conventions C+•Tourism C+•Tourist Shoppers C•Agriculture A•Clean Tech C-•Creative Arts B-•Distribution•Health Care•Retirees•Manufacturing

Logistics Links

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Key Transportation Links

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To East

To Mexico

To East & Mexico

Distribution: Back to 2001

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Economic Base Grades

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•Competitiveness D thanks to CA•Construction D-•Hotels & Conventions C+•Tourism C+•Tourist Shoppers C•Agriculture A•Clean Tech C-•Creative Arts B-•Distribution D•Health Care•Retirees•Manufacturing

Facilities & Medical Staff

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Health Care Employment:Continued Growth

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OSHPD

Age Distribution: Young & Old

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19.3 vs. 10.4%

27.6%

Economic Base Grades

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•Competitiveness D thanks to CA•Construction D-•Hotels & Conventions C+•Tourism C+•Tourist Shoppers C•Agriculture A•Clean Tech C-•Creative Arts B-•Distribution D•Health Care A-•Retirees•Manufacturing

Is the Past … the Future?

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No Longer Just This

Active Baby Boomer Retirees

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Now This

Economic Base Grades

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•Competitiveness D thanks to CA•Construction D-•Hotels & Conventions C+•Tourism C+•Tourist Shoppers C•Agriculture A•Clean Tech C-•Creative Arts B-•Distribution D•Health Care A-•Retirees A•Manufacturing

Manufacturing Jobs, 2011Back To 1997 Level

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Setting Conditions For The Future

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•Competitiveness D thanks to CA•Construction D-•Hotels & Conventions C+•Tourism C+•Tourist Shoppers C•Agriculture A•Clean Tech C-•Creative Arts B-•Distribution D•Health Care A-•Retirees A•Manufacturing D

Over All Grade

C- to C

Other Key Current Facts …

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Population Growth Has Slowed

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Academic Performance

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What Jobs Grew?

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Crime Per 1,000 Residents

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2010, 2011

When Will “Normal” Start To Return?

x2012

If Mortgages Fixed! x2015-2016

Not

x

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www.johnhusing.com