The Inland Empire is rapidly becoming the next low-wage warehouse mecca.
Sunday, March 8, 2015 – 12:00 a.m.
We’ve been hearing it for the past few years. All of those great warehouse jobs coming to the Inland Empire, an area with the nation’s highest poverty rate, will be the driver for the local economy.
Yep. The savior for the area.
Regional economists say it’s so. Therefore it must be. Right?
Wrong! The flood of low-paying, low-skilled jobs, into the Inland Empire isn’t a great event for housing.
Not at all.
Real estate prices have flattened, while new and previously-owned home sales have been rocky at best. Especially since the large inventory of distressed properties has been whittled down.
How would, as some are saying, a wave of jobs paying $10-$15 an hour can support the area economy, let alone give families enough income to purchase a decent, if any, home?
Let’s be polite and just say it’s going to be a challenge at best.
Local governments, looking for more property tax revenue, have been racing to re-zone and grant approvals for industrial and commercial logistics businesses to locate in what little open space remains. It’s escalated to the point that many cities are becoming land-locked.
According to research company Onboard Informatics; median Inland Empire household income for 2014 was $56,786. The median home sale price was $162,192.
Remember that wage growth has been pretty much non-existent. Nationally, the average hourly wage increased by just 3 cents in February. For the past six years wages have actually fallen.
With this type of demographic, who needs bad news?
Growth in the manufacturing sector, not the logistics, or even the hospitality sectors, could actually help the situation. All the cheerleading in world by politicos and community leaders won’t.
Area movers and shakers drone on and on about how the area needs a higher skilled, higher educated workforce. So far, it’s all been a bunch of talk. Make no mistake, any serious effort to solve the problem, if it were to actually happen, would take years, not months, to be realized.
In other words, you can’t have true economic growth with government, healthcare and gaming as the main drivers of Inland Empire employment.
Let’s also not forget the unfriendly tax climate in California. The highest taxed state in the Country.
Local jurisdictions have also done their share of pushing bond measures at voters. Bond measures repaid by property tax assessments.
Until something changes don’t expect a logistics industry-driven housing boom to be an economic force in the local area.
Central California is witnessing an explosion of high-tech jobs, while the Inland Empire is treated to an explosion of forklifts, warehouses and big rig trucks.