New report details Central Valley recession -- and recovery

MODESTO
October 23, 2009 12:01am

Silver linings are hard to find in the latest report on the economy of the Central Valley, this one from the Modesto-based think tank Great Valley Center.

“Overall, poverty and unemployment are high. There is a deficit of good jobs while the general population and those seeking jobs continue to grow. Whereas in the past we asked if Valley residents were able to afford buying and owning a house, we now measure how many families are losing their homes to foreclosures,” says David Hosley, president of the Great Valley Center.

The report, primarily authored by Amy Moffat, director of research for the Great Valley Center, makes five recommendations. The most important, she says, is to improve the quality of the Valley’s workforce.

“The labor force growth is still growing faster than job growth,” says Ms. Moffat, “but we also need to have that labor force educated.”

The other recommendations:

• Continue to support agriculture as a regional economic base

• Diversify the economy to meet the needs of a growing workforce

• Capitalize on the momentum surrounding the federal Recovery Act

• Know the needs of rural communities.

The Central Valley, which has seen decades of unemployment rates higher than the state averages, depends on government jobs more than any other type of employment, the report says.

“From 2003 through 2009, the Central Valley lost jobs in all goods-producing industries and gained jobs throughout the service-producing industries except information and financial activities,” the report says.

“This could be due to the current recession straining the goods-producing industries and forcing more employment in the service-producing industries,” the report says. “The largest industrial change in the Central Valley was in trade, transportation, and utilities with a loss of 46 percent of employed positions. However, the largest increase in the number of jobs was found in the educational and health services industry with an increase of 16 percent, about an increase of 44,780 jobs over six years. Government had the second largest number of jobs created during the same period (43,970).”

There are some bright spots in the report. One is tourism, which has become an important employer as well as tax-generators. Sacramento County generated the most revenue from the transient occupancy tax 2002 and 2007, nearly triple that of El Dorado and Fresno counties, the second and third highest ranked counties in the Central Valley, the report says.

“The overall revenue generated by the transient occupancy tax in the Central Valley in 2007 was more than $106 million, an increase of almost 28 percent since 2002. The increase suggests that tourism is becoming more valuable to the Central Valley, especially as other industries are losing jobs and retail sales decreased during this period,” it says.

Travel and tourism may have helped passenger volume at the Valley’s two largest airports—Sacramento International, which handled 86 percent of airline passenger volume in the valley, and Fresno Yosemite International, which sees 11 percent of the total. All other airports scrabble for a portion of the remaining 3 percent, the report says.