July 7, 2020-John Husing, Economics & Politics- Meeting via Zoom

 Tuesday, July 7, 2020

Member/Alternates Only Meeting

Virtual meeting via ZOOM


Present:   Deborah Barmack, Carole Beswick, Ann Bryan, Ken Coate, Sandra Cuellar, Kevin Dyerly, Louis Goodwin, Otis Greer, Milford Harrison, Scott Huber, John Husing, Fran Inman, Mark Kaenel, Lena Kent, Lowell King, Pam Langford, Bill Lemann, Dan Little, P.T. McEwen, John Mirau, Dan Murphy, Vikki Ostermann, Bansree Parikh, Steve PonTell,  Thomas Rice, Michael Rivera, Elizabeth Romero, Dan Schenkel, Kristine Scott, Paul Shimoff, Sol Teh, Pete Van Helden, and Ray Wolfe.

Guests: Megan Barajas, and Juan Herrera.

Announcements:  1) Inland Action is preparing to have hybrid meetings when it is possible to meet in person. The necessary equipment to facilitate Zoom and other meeting formats has been ordered. The Inland Action meeting room has been reconfigured to accommodate social distancing. The staff has created a protocol for moving forward. The determination to resume meetings will be determined by the conditions at a given time. Inland Action will not meet in August and would be prepared to meet in-person in September. Members will likely need to make reservations for meeting attendance to be sure that the room capacity is not exceeded.

Motion by R. Wolfe/Second by F. Inman/Passed:  Minutes from June 23, 2020

Members had been asked via e-mail to review the 2019 Tax return (Draft) on the Inland Action web site.

Motion by P. McEwen/Second by L. King/Passed:  Approval of 2019 Tax Return.

The Inland Empire Community Foundation has been proposed as a new member.  Michelle Decker, CEO would serve as the Primary Member.  Questions or comments should be directed to John Mirau. Carole Beswick or Deborah Barmack.  To learn more about the Foundation,  please visit their web site at https://www.iegives.org/about/iecf-overview/#iecf-overview A second announcement will be made July 14, 2020 and the membership will vote on July 21, 2020.

The Legislative Committee has recommended that Inland Action oppose SB 972 (Skinner).  Discussion ensued.
Motion by Legislative Committee/Passed: Inland Action will send a letter of opposition regarding SB 972.

Louis Goodwin, Chair presiding.

John Husing, Principal, Economics & Politics gave an updated economic presentation based on reported data from business activity during the COVID-19 pandemic.

Inland Empire job growth from 1991-2019 was strong, increasing 19.1% since “the great recession” of 2007.  However, the COVID-19 pandemic has had, and will continue to have, a severe effect on our economy.  Our population will likely continue to grow as surrounding areas are “built out”.

Congress and the federal government have poured trillions of dollars into the economy; but California has 3.0 million unemployed people.  State unemployment was at 16.3% as of May 2020.

Since having previously experienced quarterly gains of 2% plus in 2019, the gross domestic product (GDP) growth dropped to a loss of 4% in the first quarter of 2020.  Consumer spending has also dramatically dropped in the first quarter and gone to -7.6%.

Utility costs for business in California remain out of sync with the rest of the country and sit at 12.65 cents/kWH.  When compared to the next two highest states, Colorado at 7.13 cents and Wyoming at 6.77 cents/kWH, it is clear that retaining or encouraging companies to do business in California doesn’t make economic sense for many.

From April 2019 through April 2020 the Inland Empire has seen few job gains but many losses.  The change over this one-year period has been a loss of 150,700 jobs creating 14.4% unemployment.  Most heavily hit are low income positions in restaurant and retail positions.  The few gains were limited to the sectors of transportation/distribution (considered middle wage positions) and social assistance (considered low income positions).

Imports are down some 12.9% in the first quarter of 2020 due to COVID-19 and newly imposed tariffs.

Due to the decline in port volumes, powerful e-commerce and a shortage of land in valley areas, job growth in the logistics sector has been disappointingly low.  New predictions anticipate a gain of some 3,000 jobs by year end.

Since the Affordable Care Act (ACA) was enacted in 2010 we have seen a 56.5% drop in the uninsured.  Jobs in the health care industry have grown annually but have been unable to keep up with demand.  It is estimated that  currently each health care worker is caring for an average of 22.8% more patients than prior to the ACA.

Retail trade and consumer services have taken a big hit.  Covid-19 has closed stores and shut down personal services.  E-Commerce has negatively impacted in-store sales and there is a lack of available workers.  As businesses adapt to more people working from home the need for commercial space will decrease.  Technology, automation and artificial intelligence is in high gear and will be integrated faster than what was thought prior to the pandemic.

Home sales in the Inland Empire have seen slight increases, likely due to low interest rates.  Overall sales have remained relatively flat for the last few years.  Median priced new and existing homes here still have a substantial price advantage over other southern California areas.

The construction sector, which has lost almost 15,000 jobs as of April, has many challenges.  These include difficulty in permitting lots, CA Environmental Quality Act, very high prices, lack of supply and a shortage of skilled craft workers.

John Husing’s full presentation can be viewed at http://www.johnhusing.com/

A Q & A period followed.
Meeting adjourned at 9:04 a.m.