Riverside Labor Analysis. November 2018

Transcription

1 November 2018

2 The City of Labor Market Dynamics and Local Cost of Living Analysis Executive Summary The City of is located in one of the fastest growing parts of California. Over the period , the state s population grew by 9% and the population in the five-county Southern California region grew by 8%. Over this period, the population in grew by 25% and by 10% in the City of. The economy in the City of has rebounded well since the depths of the Great Recession. Since 2010, the city s economy has added 30,000 new jobs, a growth rate of 19%. This figure is roughly in line with the employment growth rate for the entire State of California. In August 2018, the city s unemployment rate had fallen to 3.8%, below the statewide average of 4.3%. This represents a significant decrease since the Great Recession, when the city s unemployment rate reached 15.8%. In 2017, employers in the City of paid an annual average salary of $48,816. In the same year, employers in the entire State of California paid an average salary of over $63,000 per year. These differences in wages can be explained by the industries in which the city specializes, relative to other locations. Relative to other places, the City of is specialized in educational services; warehousing and storage, and specialty trade contractors. While these industries pay salaries that are higher than the average salary paid by all employers in the city, each industry pays lower wages than the state s average. 2

3 The population of the City of has become more educated over the period , where the share of residents holding a bachelor s degree or higher has increased from 21% to 24%. However, the level of educational attainment in the city is lower than in the coastal communities of Southern California where 32% of the residents in Los Angeles, 40% of the residents in Orange, and 34% of the residents in Ventura hold at least a bachelor s degree. 73% of City of residents who hold a job commute out of the city for work. By contrast, 77% of the workers employed by City of employers commute in from out of the city. About 54% of the City of residents commute out of the county for work. Over 38% of these commuters earn wages greater than $50,000 per year. This figure is higher than the wage of the average job offered in the City of. House prices in the City of have increased by more than 250% since the depths of the Great Recession. Despite this increase, median house prices in the city are almost half the value of median house prices in Orange. While lower house prices might be considered an asset, homeownership rates are lower in the City of than in neighboring communities. Furthermore, household income net of mortgage costs is higher in the City of compared to many communities in Southern California. Overall, there are very encouraging signs for the city s economy, but there is some room for improvement. The following report details key aspects of the city s economy, within the context of the surrounding areas and the State of California. Introduction The City of ranks as the 12th largest city (by population) in the State of California. In 2017, close to 333,000 people called the city home. is the most populous city in the Inland Empire ( IE ), which is the fastest growing region in California, and has become one of the largest metropolitan regions in the U.S. By population, the IE ranks 13th nationally, and it is the 19th largest employment center in the country. Yet despite this strength, the region has faced, and continues to face, challenges. The region was one of the poster children for the Great Recession, when a combination of bad lending practices and unsustainable levels of building lead house prices to nose dive, businesses to lay off workers, foreclosures to spike, and left the public finances of local governments reeling. 3

4 The region has shaken off the worst effects of the Great Recession, yet some challenges remain. Among all metropolitan areas in the country, the IE ranks 322nd by per capita income. In a high cost state like California, incomes must rise in the region to improve the living standards of the local residents. The economy of the City of is the focus of this report. In 2016, the median household annual income in the City of stood at roughly $61,000, compared to the median household income in California of $63, 783 per year. Income levels in the city are partly boosted by the ability of its workers to commute into the communities of Coastal California, which are home to relatively well-paying jobs. In 2017, employers in the city paid an annual average salary of $48,816. In the same year, employers in the entire State of California paid an average salary of over $63,000 per year. Around 54% of the City of residents commute out of the county for work. The following report provides an overview of the labor force characteristics, commuting patterns, economic profile and residential affordability for the City of, California. The study will benchmark key metrics in these areas against equivalent measures in the surrounding communities of the city, and the broader Southern California region. The primary purpose of this study is to provide City leaders with key insights into the socio-demographic characteristics of the city s residents and economy, relative to other communities. The report will be divided into the following sections. First, the report will consider key demographics in relation to the city s residents, considering population growth in the city, the city s racial composition and levels of educational attainment. The report will then provide a high-level analysis of the city s economy and its industrial base. Third, the report will consider the commuting patterns of the city s residents, and examine commuting patterns into the city. Finally, the report will consider housing affordability in the city compared to other communities in the region. 4

5 Key Demographics The City of is home to around 333,000 residents, ranking it the 12th largest city in California. It is located in the Inland Empire, the fastest growing part of Southern California and among the fastest growing in all of California. Since 2005, the population in California has increased by 9%. By contrast, the population in has increased by 25% over this time. At the same time, the population in the cities of the Western Council of Governments ( WRCOG ) has increased by 24%, and the population in the City of has increased by 10%. Population growth has occurred due to a combination of more affordable housing costs compared to Coastal California, relatively abundant housing, and the growth of the logistics sector in the Inland Empire. is by far the fastest growing within the broader Metropolitan Los Angeles region. Over the period , the population in the five-county region of Metropolitan Los Angeles grew by 8% 1. 30% POPULATION GROWTH IN SOUTHERN CALIFORNIA Source: American Community Survey; Analysis by UCR Center for Economic Forecasting 25% 20% 15% 10% 5% 0% City of WRCOG Los Angeles Orange San Bernardino Ventura 1 All demographic data have been drawn from the U.S. Census Bureau s American Community Survey 5

6 Race As is the case in much of California, the City of is home to a diverse community of residents. In 2016, 51% of the City s residents were of Hispanic origin, while the white population was the second largest racial group in the city at 33%. Since 2005, the Hispanic population has grown from being 45% to 51% of the city s residents. At the same time, the white population has fallen from 38% to 33% of the community s residents. These changes are in keeping with broader trends in Southern California. RACIAL COMPOSITION OF THE CITY OF RIVERSIDE 2016 Source: ; American Community Survey; Analysis by UCR Center for Economic Forecasting 6% 7% The share of foreign born residents is lower in the City of compared to other White communities of Southern California. 51% 33% Hispanic Asian Black In 2016, around 23% of the city s residents were foreign born, compared to close to 35% in Los Angeles and 30% in Orange. PERCENTAGE OF FOREIGN BORN RESIDENTS In Southern California Communities, 2016 Source: American Community Survey; Analysis by UCR Center for Economic Forecasting 40% 35% 30% 25% 20% 15% 10% 5% 0 City of Los Angeles Orange San Bernardino Ventura 6

7 Educational Attainment The residents of the City of have higher levels of educational attainment than the neighboring communities of the WRCOG. In the City of, 24% of the residents hold at least a bachelor s degree, compared to 22% of the residents in the WRCOG. Residents in the City of also have a higher level of educational attainment than residents in the rest of the county (24% hold at least a bachelor s degree compared to 22% for the county). However, compared to other communities in the rest of Southern California, notably Los Angeles, Orange and Ventura Counties, the city s residents are less well educated (as measured by attainment of at least a bachelor s degree). The level of education in a given community is primarily a function of its industrial base. If an economy is creating jobs that require high-skilled workers, it will attract high-skilled workers to its economy. This process can become self-reinforcing, since as the share of high-skilled workers in a community grows, this will attract employers to the community in search of such workers. As will be described below, the City of currently specializes in industries that require relatively modest levels of educational attainment. PERCENTAGE OF RESIDENTS WHO HOLD AT LEAST A BACHELOR S DEGREE In Southern California Communities Source: American Community Survey; Analysis by UCR Center for Economic Forecasting 45% 40% 35% 30% 25% 20% 15% 10% 5% 0 City of WRCOG Los Angeles Orange San Bernardino Ventura 7

8 Age The residents of the City of are relatively young compared to other communities in Southern California. In 2016, the median age of a resident in the City of was 31.8 years, compared to a median age of over 36 in Los Angeles, Orange and Ventura Counties. MEDIAN AGE OF RESIDENTS BY SOUTHERN CALIFRONIA COUNTIES, 2016 Source: American Community Survey; Analysis by UCR Center for Economic Forecasting Los Angeles Orange City of San Bernardino Ventura The City of Economy The economy in the City of has rebounded well since the depths of the Great Recession. In 2010, employment in the city reached its lowest point, but has since added close to 30,000 new jobs. This represented a record high level of employment in the community, exceeding pre-recession levels by around 20,000 workers. The economy in the City of, like many communities throughout the U.S., is influenced by broader macroeconomic trends. A global financial crisis was at the root of the Great Recession, which led to significant economic hardship in the City of. Likewise, the City of benefits from the current health of the U.S. economy. For example, the health of the U.S. consumer increases the demand for physical goods, which increases the demand for logistics services in the IE. 8

9 TOTAL EMPLOYMENT IN THE CITY OF RIVERSIDE Source: American Community Survey; Analysis by UCR Center for Economic Forecasting 175, ,000 Total Employment 165, , , , , , Despite impressive growth in the number of jobs in the city, income levels remain below the income level for the entire State of California. In 2016, the median household annual income in the City of stood at roughly $61,000, nearly $5,000 or 9.0% below the statewide figure of $63,783. Median household income in the City of is comparable with the median income level of the residents of Los Angeles, and San Bernardino Counties, but significantly lower than the income levels of the residents in Orange and Ventura Counties. MEDIAN HOUSEHOLD INCOME In Southern California Communities, 2016 Source: American Community Survey; Analysis by UCR Center for Economic Forecasting 90,000 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10,000 0 Los Angeles Orange City of San Bernardino Ventura WRCOG 9

10 In August 2018, the unemployment rate in the City of stood at 3.8%. This represents a significant decrease since the Great Recession, when the city s unemployment rate reached 15.8%. The unemployment rate in the city is significantly lower than the statewide level of 4.3%. THE UNEMPLOYMENT RATE IN THE CITY OF RIVERSIDE Source: California Employment Development Department; Analysis by UCR Center for Economic Forecasting Unemployment Rate Jan-00 Oct-00 Jul-01 Apr-02 Jan-03 Oct-03 Jul-04 Apr-05 Jan-06 Oct-06 Jul-07 Apr-08 Jan-09 Oct-09 Jul-10 Apr-11 Jan-12 Oct-12 Jul-13 Apr-14 Jan-15 Oct-15 Jul-16 Apr-17 Jan-18 Industry Profile Economic activity in any economy can be broken down into broad industrial categories. The most fundamental measure of activity by industry is employment. Within the City of, health care and social assistance is the largest sector of the economy, accounting for 15% or nearly 25,000 of the job s in the city. Education is the second largest employer (14%), followed by local government which accounts for 12% of the jobs in the city 2. That these sectors lead employment in the economy is a function of secular trends that have created growing demand for healthcare services, as well as the City of being home to the University of California,, and various county and local government offices. Healthcare and social assistance has been the fastest growing sector in the city since 2008, adding over 5,000 jobs. Again, this is due in part to secular demographic changes. Within the healthcare sector, hospitals account for roughly one third of all employment. While offices of physicians and offices of dentists together account for another third of employment in the sector. Within the social assistance sector, the majority of city employment is found in individual and family services, such as child and youth services and services for the elderly. 2 All industry data have been compiled from data provided by the California Employment Development Department 10

11 The government sector has shed around 1,200 jobs, while the loss of jobs in the information sector is surprising, since the sector has been expanding in California and at the national level. INDUSTRIAL COMPOSITION OF THE CITY OF RIVERSIDE ECONOMY 2017 Source: California Employment Development Department; Analysis by UCR Center for Economic Forecasting Number of Jobs by Sector Sector s Share of All Jobs Change Since 2008 Sector Wages Accommodation and food services 12,918 8% 2,322 19,689 Administrative and waste services 12,798 7% 4,676 25,845 Arts, entertainment, and recreation 1,285 1% 16 22,021 Educational services 24,534 14% 1,101 41,989 Finance and insurance 3,764 2% ,312 Government 21,022 12% -1,265 65,606 Health care and social assistance 24,840 15% 5,465 44,632 Information 1,602 1% ,284 Management of companies and enterprises 978 1% ,154 Manufacturing 9,662 6% ,706 NR/Construction 17,217 10% 3,988 55,923 Other services, except public advertising 4,525 3% ,005 Professional and technical services 4,887 3% ,570 Real estate and rental and leasing 2,216 1% ,161 Retail trade 16,209 9% ,691 Transportation and warehousing 5,962 3% ,816 Unclassified 494 0% ,325 Utilities 117 0% ,866 Wholesale trade 5,979 3% ,034 Total Jobs 171,011 48,816 A key dimension of any economy is the extent to which it specializes in particular industries relative to other locations. Location quotients are a common measure to gauge a city s industrial strength relative to other communities in the national economy For each industry, a location quotient indicates whether a city is more specialized or less specialized in a given sector compared to the communities in the rest of the nation. If the location quotient for a given sector is greater than 1, this means the city has a greater share of employment in this sector than the national economy, and a smaller share than the nation if the number is less than 1. The table below displays the ten sectors in which the City of has the greatest strength relative to other communities in the U.S. 11

12 INDUSTRIAL SPECIALIZATION IN THE CITY OF RIVERSIDE 2017 Source: California Employment Development Department; Analysis by UCR Center for Economic Forecasting Location Quotient Wage ($) Total Employment Educational Services ,692 21,096 Warehousing and Storage 3 54,541 3,651 Specialty Trade Contractors ,106 11,802 Heavy and Civil Engineering Construction ,366 2,168 Crop production ,991 1,023 Social Assistance ,951 6,325 Wood Product Manufacturing , Utilities , Plastics and Rubber Products Manufacturing ,451 1,134 Motor vehicle and parts dealers ,330 3,169 Rental and Leasing Services , Industrial specialization is a significant factor in determining the wealth of any city or state. Those cities that specialize in high-paying sectors will have high income levels. For example, the communities of Silicon Valley specialize in high-paying, high-tech jobs, which drives up income levels in the region. By contrast, regions in the Midwest that specialize in the agricultural sector tend to have lower income levels. The City of has a pronounced specialization in educational services, warehousing and storage and specialty trade contractors. This specialization is due to the presence of UC, and the IE s proximity to the ports of Los Angeles and Long Beach. Together, these three sectors account for over 20% of the city s private employment. While these sectors pay around the average or above average wages compared to the city average wage, by the standards of the rest of the state, they pay quite modest wages. The average wage in the state of California is around $63,700, for example. None of these three sectors pay wages higher than this figure. For wages to grow in the City of, its industrial base would need to transition into higher paying sectors. 12

13 Commuting Pattern in the City of There are two datasets that allow for the analysis of commuting patterns in a given community. The U.S. Census Bureau s Longitudinal Employer-Household Dynamics (LEHD) enable the analysis of city-to-city commute dynamics. While these data allow for the analysis of commute patterns at a detailed geographic scale, they provide limited information about the demographics of commuters. The U.S. Census Bureau also releases the American Community Survey (ACS), which provide data on county-to-county commute patterns. While these data lack geographic detail they provide more detailed information on the demographics of commuters. Both datasets will be employed in this analysis to provide a more complete snapshot of commute patterns in the community. Commuters Out of The City of In 2015, approximately 121,000 residents in the City of held employment. Of this total, nearly 88,000 workers commuted out of the City of for work, while 31,000 City of residents remained in the city for work. To put this another way, 73% of City of residents who hold a job commute out of the city for work. This is not uncommon. Cities are not closed economies and in the State of California, the majority of residents live and work in separate communities. This is, in part, because individuals tend to be more mobile with respect to their place of work than they are with respect to where they choose to live. SHARE OF THE CITY OF RIVERSIDE WORKERS WHO LEAVE THE CITY FOR WORK 2015 Source: Longitudinal Employer-Household Dynamics; Analysis by UCR Center for Economic Forecasting 6% 7% 27% 51% 73% 33% Remain in City for work Commute out of City 13

14 MOST COMMUTED TO CITIES FOR CITY OF RIVERSIDE COMMUTERS Source: Longitudinal Employer-Household Dynamics; Analysis by UCR Center for Economic Forecasting Most Commuted to Cities Number of Commuters Share Commuting to Destination Corona 7,628 9% San Bernardino 4,682 5% Ontario 4,623 5% Los Angeles 4,400 5% Jurupa Valley 3,172 4% Moreno Valley 2,989 3% Rancho Cucamonga 2,807 3% Anaheim 2,599 3% Fontana 2,574 3% Irvine 2,259 3% Total Approximately 60% of the city s residents who leave the city for work commute out of the county. The average commute time for such workers is roughly 48 minutes. More than 24,000 workers commute to San Bernardino and nearly 32,000 workers commute to Los Angeles and Orange Counties. By contrast, in Los Angeles only 23% of workers commute out of the county, while 43% of workers commute out of Orange. 14

15 Commuter Earnings and The Industries in Which They Work Due to limitations on data availability it is not possible to get an accurate estimate of the wages earned by commuters out of the City of or the industries in which they work. For example, the LEHD groups commuter wages into three broad categories. Those who earn less than $15,000 per year, those who earn between $15,000 and $39,999 per year and those who earn more than $40,000 per year. Those commuters who earn more than $40,000 make up the largest share of workers who leave the city for work, accounting for 39% of the total. This figure includes workers who commute within and out of the county. EARNINGS FOR OUT OF CITY COMMUTERS Source: Longitudinal Employer-Household Dynamics; Analysis by UCR Center for Economic Forecasting 23% Earn Less Than $15,000 39% Earn $15,000 - $39,000 Earn More Than $40,000 38% The ACS data tell us that over 38% of City of residents who commute out of the county for work earn wages greater than $50,000 per year. Since employers in the City of pay wages of around $48,000 per year on average, the data suggests that many of the city s outbound commuters travel further distances in search of higher paying work. Only 23% of the residents who commute out of the city earn less than $15,000 per year, reinforcing the idea that workers are less likely to travel greater distances for relatively low paying work. Again, the data are quite limited in relation to the industries in which commuters travel to for employment. Industries are divided into three broad categories: goods producing, services industries and trade, transportation and utilities sectors. Goods producing industries are comprised of the natural resources, mining, oil and gas extraction, construction and manufacturing sectors of the economy. 15

16 Services industries include retail, information, finance and insurance, real estate, professional and scientific services, administrative support, education services, health care, and accommodation and food services. The transportation and utilities sectors include transportation and warehousing and utilities. 56% of the workers who commute out of the city work in the services industry; 20% work in goods producing industries, and 25% work in the trade, transportation and utilities sectors. SECTORS OF WORK FOR OUT OF CITY COMMUTERS Source: Longitudinal Employer-Household Dynamics; Analysis by UCR Center for Economic Forecasting 25% Services Industry 56% Goods producing industries 20% Trade, Transportation and Utilities Sectors Commuters in to the City of In 2015, City of employers employed around 145,000 workers. Over 111,000 of these positions were held by people commuting into the city for work from other communities. This means that 77% of the workers employed by City of employers are from out of the City. Again, this is not uncommon within the context of Californian commuting patterns. This number has increased since 2008, when roughly 100,000 workers commuted into the city. Since 2008, the percentage of workers who commuted into the city has increased from 75% to today s figure of 77%. 16

17 ORIGIN OF WORKERS EMPLOYED IN THE CITY OF RIVERSIDE ECONOMY Source: Longitudinal Employer-Household Dynamics; Analysis by UCR Center for Economic Forecasting 23% From outside of the City From within the City 77% ORIGIN OF WORKERS EMPLOYED IN THE CITY OF RIVERSIDE ECONOMY Source: Longitudinal Employer-Household Dynamics; Analysis by UCR Center for Economic Forecasting Most Commuted from Destinations Number of Commuters Share Commuting to Destination Moreno Valley city, CA 11,235 10% Corona city, CA 4,725 4% Jurupa Valley city, CA 4,408 4% Los Angeles city, CA 4,084 4% San Bernardino city, CA 3,801 3% Fontana city, CA 3,481 3% Perris city, CA 2,492 2% Rialto city, CA 1,979 2% Rancho Cucamonga city, CA 1,965 2% Other 73,365 The highest contributing communities to the City of come from the surrounding communities, except for the City of Los Angeles, from which around 4,000 employees commuted to the City of in For example, over 11,000 workers commute from Moreno Valley to work in the City of. 44% of the people commuting into the City earn more than $40,000 per year. 17

18 21% of workers commuting into the city earn less than $15,000 per year, and 35% of the workers commuting into the City earn between $15,000-$39,999 per year. Over 50,000 workers commute to the City of from out of the county. Close to 28,000 workers commute from San Bernardino, close to 16,000 come from Los Angeles, and nearly 10,000 from Orange. Cost of Living in the City of Since the depths of the Great Recession, house prices in the City of have more than doubled. Yet house prices in the city remain low relative to the coastal communities of California. Housing Prices In the wake of the Great Recession and mortgage meltdown, the median house price in the City of fell to $173,000. By the second quarter of 2018, house prices in the city had rebounded to $397,500, 2.5 times greater than the Great Recession lows. 18

19 Today, the fundamentals of the housing market in the City of are stronger than they were prior to the Great Recession. House prices are being driven by rising incomes and the lack of housing supply, while tight lending standards have ensured that only credit worthy borrowers can become homeowners. In fact, national data show that the average credit scores of those obtaining home loans has consistently been rated as very good, averaging over 760 every year beginning in These factors should help the city to avoid the type of crash witnessed during the Great Recession. MEDIAN HOUSE PRICES IN THE CITY OF RIVERSIDE Source: Zillow; Analysis by UCR Center for Economic Forecasting 450, , , , , , , ,000 50,000 0 Jan-08 May-08 Sep-08 Jan-09 May-09 Sep-09 Jan-10 May-10 Sep-10 Jan-11 May-11 Sep-11 Jan-12 May-12 Sep-12 Jan-13 May-13 Sep-13 Jan-14 May-14 Sep-14 Jan-15 May-15 Sep-15 Jan-16 May-16 Sep-16 Jan-17 May-17 Sep-17 Jan-18 May-18 House prices in the City of are more affordable compared to the coastal counties of Southern California. However, they are somewhat more expensive than in the neighboring cities of the Western Coalition of Governments and other communities of. MEDIAN HOUSE PRICES IN SOUTHERN CALIFORNIA COMMUNITIES IN 2018 Source: Zillow; Analysis by UCR Center for Economic Forecasting 800, , , , , , , ,000 0 City of Los Angeles Orange San Bernardino Ventura WRCOG 3 Federal Reserve Bank of New York, Quarterly Report on Household Debt and Credit, First Quarter

20 As these data would suggest, median mortgage costs in the City of are more affordable than in the nearby coastal cities, but more expensive than in neighboring communities. For example, in 2016 the median mortgage in the City of was around $1,800 per month, compared to around $2,300 in Los Angeles and around $2,600 in Orange. MEDIAN HOUSE PRICES IN SOUTHERN CALIFORNIA COMMUNITIES IN 2018 Source: American Community Survey; Analysis by UCR Center for Economic Forecasting 3,000 2,500 2,000 1,500 1, WRCOG Los Angeles Orange San Bernardino Ventura City of Yet, because industries in the City of pay lower wages than those in the coastal communities, the average homeowner in the City of is not always better off than a homeowner in other parts of the coastal communities, once housing costs are taken into account. One way to measure differences in the cost of living across communities is to consider the income of workers net of housing costs. In the chart below, median annual mortgage costs have been subtracted from median household income. According to this measure, homeowners in the City of do not perform as well as homeowners in Orange and Ventura Counties. Los Angeles performs particularly poorly on this measure, where incomes are not high enough to offset high housing costs. On average, residents in the City of are significantly better off than residents in Los Angeles, once the cost of housing is taken into account. 20

21 INCOME NET OF HOUSING COSTS Source: American Community Survey; Analysis by UCR Center for Economic Forecasting 90,000 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10,000 0 Los Angeles Orange City of Income after Mortgage Payments San Bernardino Annual Mortgage Cost Ventura WRCOG Home ownership rates are lower in the City of than in other communities in Southern California. Home ownership is determined by house prices, income levels and the availability and cost of mortgages. Homeownership rates are likely lower in the City of because of the higher cost of housing relative to its neighboring communities, and its lower household incomes compared to the coastal communities. HOMEOWNERSHIP RATES IN SOUTHERN CALIFRONIA COMMUNITIES IN 2016 Source: American Community Survey; Analysis by UCR Center for Economic Forecasting Los Angeles Orange City of San Bernardino Ventura WRCOG In relation to the rental market, rent burdens measure the share of a household s income that is spent on rent. Among Southern California communities, rent burdens range from 33 percent in Orange, to around 36% in the communities of the Western Coalition of Governments. In the City of the rent burden is around 35%, which is similar to the rent burden in neighboring communities and the rent burden in Los Angeles. 21

22 Conclusion This report has detailed a number of key metrics pertaining to the City of s workforce; local commute patterns; affordability, and the nature of the city s economic base. There are a number of positive signs for the city s economy: the city s economic base is centered on growing industries such as Health Care, Education, and Logistics. It is adding people as well as jobs, and housing is affordable relative to many other parts of Southern California. Furthermore, the city has an unemployment rate much lower than the statewide average. Yet there are areas where the city s economy can improve. The city s economy pays lower wages than the average in the rest of the state. There are two primary ways that economic indicators can improve in any location. The first is through educational attainment: better educated and skilled residents earn higher wages. The primary way in which a city can attract higher skilled workers is through improving local amenities and services, such as improving schools. The second is by nurturing the city s better paying industries and attracting more of such industries, consistent with the city s job base. Better paying industries can provide employment opportunities for local workers and enhance their ability to earn higher incomes. If the City of seeks to improve economic indicators in the community, it should focus its attention in these areas. 22

23 900 University Ave. Anderson Hall CA Telephone Web UCREconomicForecast.org