Economic forecast for San Joaquin Valley: Jobs up, wages down
06/04/2014 7:03 PM
06/04/2014 7:04 PM
San Joaquin Valley employment is climbing back to prerecession levels, but worker wages have declined, according to a business forecast by California State University, Stanislaus, economics professor Gökçe Soydemir.
“There’s an excess supply of labor … which gives companies tremendous buying power,” Soydemir said after releasing his mid-2014 forecast. “That depresses wages, and that’s what we’re observing.”
Average weekly wages dropped 0.04 percent last year in the eight-county Valley, which includes Stanislaus, Merced and San Joaquin counties.
Soydemir said “the forces of supply and demand” are putting downward pressure on wages nationwide, but “there’s no question it is worse here.” He doesn’t expect wages to go much higher anytime soon. For the next two years, the economist expects Valley wages will increase about 0.15 percent annually.
“The bright side is that employment in the valley posted an all-time high” last fall – reaching 1,613,166 – before dipping during the winter, Soydemir said. “That was very encouraging.”
“This accelerated performance is likely to continue through the latter part of 2014 and into the first half of 2016,” Soydemir’s forecast states. “Employment in construction grew the fastest in 2013, but the most remarkable growth was observed in retail trade employment. Average yearly growth in this category for 2013 was 3.74 percent, more than four times the 10-year benchmark growth rate of 0.83 percent.”
Other employment sectors posting high growth were: trade, transportation and utilities; leisure and hospitality; and wholesale trade.
“But some sectors are not going to recover soon,” he warned, noting that employment opportunities are lacking in information technology, government and financial activities.
For those seeking promising careers, Soydemir suggested “getting trained for jobs in the health industry; you can’t go wrong with that.” He said two-year technical schools can provide many of the medical skills that are in demand.
“Workers must acquire some type of skill,” Soydemir advised. “The demand for unskilled workers in the United States is very low.”
Soydemir cited agriculture as an example: “Farm labor is going to become in less demand because of machinery and a shift in crops.”
Ag jobs also may be at risk if the drought continues another year, he cautioned, saying water shortages are causing economic woes.
“Meat and dairy prices already have gone up because of the drought,” Soydemir said. Besides that, he said the Valley’s “inflation rate has been very low, about 1 percent.”
Soydemir’s economic forecasts are based on U.S. Bureau of Labor Statistics research. A copy of his most recent, 58-page report is posted with this story at www.modbee.com.
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