In May of this year Marin County’s unemployment rate dipped below 2% (1.9%) for the first time in 20 years (also 1.9% in May 1999). If you are an elected official or policymaker the low figure should please you, signaling that almost all your citizens that want a job have a job. Business owners are on the opposite end, fretting over a tight labor market that could mean a raise in wages, prices and potentially lower profits. There is a third category of people that are impacted: residents that rely on local goods and services. Have you noticed an increase in the cost of things lately or has the service at your favorite eatery slumped because they don’t have enough staff?
The Marin Economic Forum has been conducting a “business retention and expansion” (“BRE”) project in Marin County to measure the health of our local businesses. We have already talked with over 40 businesses and without a doubt the #1 issue for all of them is staffing. This is not news for most of you but here is what is newsworthy: the labor shortage bears all the characteristics of another issue we refer to as a “crisis,” housing. Labor, like housing, is a supply and demand issue. Labor, like housing, is tight because there is not enough supply of workers. But here is why I also consider the labor shortage a crisis: Unlike housing, our labor supply is diminishing.
Marin County imports a huge percentage of its workforce (63%) and our population demographics show less than 10% of our residents are aged 18-34. Meanwhile the proportion of older adults, those who will leave the workforce, is growing at an increasing rate. We only have one university and one community college here that graduates an average of 1000 students a year; that is less than 1% of our labor force even if all those graduates got jobs in Marin.
Of concern is that we know the current labor shortage is due in part to lack of housing so one crisis is exacerbating another. Worse, unlike housing, where at least a half-dozen, well-informed advocacy groups are trying to address the issue, there are no leading advocates to address our “labor crisis.” To be fair, the construction industry has acted with new training programs and the Marin County Office of Education is working at the high school level to expedite students into careers should they choose that path. But residents should be aware that we are approaching structural issues with our labor force, including lack of talent and programs to secure a labor pipeline.
Compare Marin with other regions around the country also facing labor and housing shortages and you see more aggressive action: the hospitality sector in Seattle is investing serious money in “upskilling” employees so employers can do more with less, Colorado Springs is filling jobs in manufacturing, IT and child development by providing accelerated training to underemployed and undereducated people in the community, and in Wisconsin, where the population has been stagnant and getting older, the State has invested over $1 million in a marketing campaign to attract millennials from urban centers like Chicago, selling a high quality of outdoor life. These regions were driven to address their labor shortages and did so. What are we doing in Marin? Not enough
On Friday June 21, 2019 State Senator Mike McGuire (D-District 2) addressed the MEF Board of Directors meeting held at BioMarin, San Rafael, to provide an update on several key issues for the California and Marin economy. California’s significant role in the world economy (ranked 5th) is well known but most residents may not understand how that relates to funding for public goods and services.
In the field of economics there are a lot of funny terms. Remember just a short while ago we were all talking about “quantitative easing?” There is another funny term, “Location Quotient” or “LQ” that I think Marin residents should know about.
LQ is basically a way to compare a region’s economy to the nation by measuring the concentration of things like occupations, industry presence or even demographics. LQ is measured with a number (a ratio actually) against the benchmark of “1” for the national average. An LQ measurement above 1 suggests a higher concentration of something, say architects, compared to other regions. The assumption is that an LQ measure greater than 1 means that occupation, or industry has a relatively more significant role in a region. Take the city of Detroit; the automobile manufacturing industry has a LQ over 10 (!) demonstrating its huge importance to that city’s economy and its residents relative to other places in the U.S.
The table below shows the LQ for ‘occupations’ in Marin. This means that for the sectors presented, there is either a high concentration or low concentration of those jobs in Marin compared to other regions. I chose “occupations” because it is important to understand the jobs we have here in Marin compared to the nation.
Data Source: EMSI
Here are some of the interesting stories about the LQ measurements above and some related data:
The highest LQ score goes to occupations in the field of Arts, Design, Entertainment, Sports and Media. That would please most residents. However, that occupation also has one of the lowest median hourly wages at $21.81-just above the level of a “livable wage” for Marin.
The lowest LQ score, excluding the military, is in Farming, Fishing and Forestry which also has the second to lowest median hourly income at $14.71. Residents should be concerned that there are so few occupations in the ag sector, and they pay so low; the locally grown produce, meats and dairy we have come to love is at risk in the near future.
While “Personal Care and Service” has a strong LQ (1.64) and has experienced the most job growth of any of the sectors (+21% in 5 years), it has the second to worst median hourly income ($13.36), far below the “livable wage” number.
Two sectors that one would assume to have a high concentration in the tech-rich Bay Area are “Computer and Mathematical” and “Healthcare Practitioners and Technical”. However, both have LQ’s less than 1 in Marin. Unfortunately, these are also two occupations that are among the highest median hourly wages (>$42/hour). That suggests Marin is performing lower than the nation in terms of the concentration of these jobs. To me that means we have unfulfilled potential to increase the number of companies and jobs in those high paying sectors.
Overall, we can observe 11 sectors that have LQ’s greater than 1 but only 6 of them pay higher than a “livable wage” by Marin standards. So as far as occupation LQ’s telling a story about the uniqueness of the Marin economy, one might say we have a higher concentration of lower paying jobs and that occupations in two of the best paying sectors have a lower relative concentration in Marin than the national average. That should be perceived as a problem; the occupations we have aren’t necessarily the occupations we need given the high cost of living and our assets, which includes a highly educated population. Strictly going by occupation LQ, Marin has work to do.
The Bay Area is the most expensive place in the world to build an apartment building, office tower, hospital, warehouse or school.
And it’s not even close — the region is 13 percent more costly to develop than second-place New York, according to a new report by UK-based consultant Turner & Townsend.
“Another dubious award for the Bay Area,” said Russell Hancock, CEO of the non-partisan, regional think-tank Joint Venture Silicon Valley.
The report blamed high costs on a combustible mixture of high demand, labor shortages, steel tariffs and rapid economic growth.
Even as the expanding Bay Area economy demands more homes, offices, roads and transit projects, rising costs could threaten development, forcing project delays or changes in size and scope.
The Marin Economic Forum (MEF) enables Marin’s stakeholders to collaborate on improving the County’s economic vitality.
It’s our job to watch the economy and interpret the risks and opportunities for our residents and businesses.
Marin County is not a large economy, but it is a successful one. Over 64 percent of our population is employed and the median household income is almost double the national average.
We are fortunate to have important sectors like food and beverage manufacturing, agriculture, life sciences, and creative industries.
Low unemployment rates in Marin County and across the state and country are creating difficulties for employers to attract and retain new talent and high costs of living foster other challenges, according to presenters at a conference put on by Marin Economic Forum.
Presenters at Tuesday’s event put on by the nonprofit economic development organization in San Rafael included Robert Eyler, director of the Center for Regional Economics at Sonoma State University, and Craig Nelson, who chairs the San Rafael-based Nelson Family of Companies.
No recession before 2020 at the earliest and higher Marin home prices in 2019 were among the predictions made at an event sponsored by the Marin Economic Forum this week.
“Right now it seems unlikely that we would have a recession before the end of 2020,” said professor Robert Eyler, head of the economics department at Sonoma State University and the forum’s chief economist.
“I think next year will be a little trickier,” he said. “In 2021, I’m not sure yet; the clouds have yet to part for me.”
An estimated 300 people turned out for the breakfast meeting Tuesday at Embassy Suites Hotel in San Rafael. Eyler spoke to the Independent Journal about his findings on Wednesday.
We are pleased to announce Craig Nelson as our keynote speaker for Forecasting the Future event on Tuesday January 29th, 2019.
Craig Nelson is the Chairman of the Board of the Nelson Family of Companies and iWorkGlobal. He joined Nelson in 2001 as General Counsel. He led the Nelson staffing units from 2005 through 2011 as Executive Vice President. Craig served as Chief Executive Officer from January 2012 through September, 2013.
Marin Economic Forum SAN RAFAEL, CA, November 15, 2018 – Former Bay Area business owner and economic development expert Mike Blakeley has been hired as the next Chief Executive Officer of the Marin Economic Forum (MEF). Mr. Blakeley, grew up in Marin County and comes to the MEF after 15 years with Nathan Associates Inc., a global economics consulting firm where he recently served as a Managing Director. In this role Mr. Blakeley was responsible for implementation of large-scale economic development programs in emerging markets funded by country donors, including the U.S. government.
SAN RAFAEL, CA, November 15, 2018 – Former Bay Area business owner and economic development expert Mike Blakeley has been hired as the next Chief Executive Officer of the Marin Economic Forum (MEF). Mr. Blakeley, grew up in Marin County and comes to the MEF after 15 years with Nathan Associates Inc., a global economics consulting firm where he recently served as a Managing Director. In this role Mr. Blakeley was responsible for implementation of large-scale economic development programs in emerging markets funded by country donors, including the U.S. government.
