Thursday, February 20, 2020     Volume: 20, Issue: 51
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Santa Maria Sun / News

The following article was posted on February 11th, 2020, in the Santa Maria Sun - Volume 20, Issue 50 [ Submit a Story ]
The following articles were printed from Santa Maria Sun [santamariasun.com] - Volume 20, Issue 50

Central Coast economy still growing, but labor issues could hinder it long term

By CAMILLIA LANHAM

Skilled workers are getting harder to come by on the Central Coast, according to Mike Miller of Papich Construction, and it’s affecting how quickly the company can complete transportation infrastructure projects. 

Miller spoke up at the end of the end of the 2020 Economic Forecast hosted by the Santa Maria Valley Chamber of Commerce and Aera Energy in Allan Hancock College’s Severson Theatre on Feb. 10. 

The shortage has gotten to the point where construction companies have to poach each other’s labor forces, Miller said. Michael Lopez with Santa Barbara County’s local plumbers and pipefitters union, UA Local 114, chimed in, saying that the county needed to focus more on apprenticeship and trades programs and less on four-year colleges. 

But apprenticeship programs aren’t going to fix the issue, Christopher Thornberg from Beacon Economics said in response. 

“You’re dealing with basic labor force issues,” said Thornberg, who presented the 2020 forecast. 

Low labor force growth is an issue that Thornberg said could affect economic growth over the long term, as could the disconnect between actual economic issues and political rhetoric surrounding the economy. Overall, he said, all signs point to a good economy with steady (albeit, slowing) growth with no recession in sight. 

“Today’s economy is a Goldilocks economy. It’s not too hot, not too cold,” he said. “This is a good economy.”

The Central Coast region has experienced near record low unemployment rates—currently 3.5 percent in Santa Barbara County and 2.8 percent in San Luis Obispo County—but Thornberg said there’s also been relatively low growth in the labor force. 

“It’s not because you don’t have employers; it’s because employers can’t find workers,” he said. “With a lack of labor force growth, you’re not going to budge your economy ... it’s a body problem.” 

That body problem can be attributed in part to housing supply issues, he said. In order to achieve 2 percent growth in the labor market, cities and counties in California should be issuing permits for at least 250,000 units per year. However, he said, the state’s only doing half of that. 

“It’s a supply crisis. ... We don’t build enough units,” Thornberg said. “Lower income people have a problem. They can’t live here. It’s not that they can’t afford to live here. It’s that they can’t live here.” 

Because there’s a shortage of units, higher income residents are able to bid higher on available housing units than lower income residents. As a result of the housing “supply crisis,” Thornberg said lower-skilled workers are moving out of the area, and higher-skilled workers are moving in. 

The only city bucking that trend is Santa Maria, Thornberg said. The city has been steadily growing over the last 20 years, and he attributes that in part to housing prices, which are lower in Santa Maria than they are in other parts of the Central Coast. 

Over the long run, labor growth is going to be a big issue for the U.S. economy, he said. This is due to the number of baby boomers who will be retiring and leaving the marketplace as well as the much smaller number of millennials who will be able to replace them. One of the ways to increase the labor force, he said, would be through immigration policies that enable workers to migrate to the U.S. and fill those vacancies. 

That being said, though, he iterated that now is a good time for job training and job opportunity. 

“There are more job opportunities in the U.S. economy than there are people looking for work,” he said. “People aren’t suffering. ...This is the healthiest consumer spending market we’ve ever seen—in the last 30 years.”








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The entire county should operate as one Humane Society.

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