Region’s Top Job Creators Survived Economic Downturn

From the 1.23.13 edition.

By Daniel Mintz

Press Reporter

 

The North Coast’s top six job-producing, wage-generating industry clusters appear to be recession-proof, according to information from a new county economic development report.

Released last week, the updated Targets of Opportunity report details the progress of six regional “industry clusters” that have consistently shown increases in job numbers and average wages – diversified health care, specialty food, flowers and beverages, building and system construction, investment support services, management and innovation services and niche manufacturing. Although prepared by the county’s Economic Development Division for the Board of Supervisors and other Humboldt agencies, the report assesses industry conditions for the entire five-county North Coast region. And it has found that employment trends are changing, favoring the six clusters.

“These fast-growing, high-wage industries are also knowledge-based, which indicates decreasing dependence on resource-based industries in the Redwood Coast region,” the report states.

The previous report was released in 2007 and used 1990 as a base year and 2004 as a comparison. The six clusters comprised 39 percent of the region’s jobs and 53 percent of its private sector payroll at the time.

Despite using a less economically robust base year and comparison span of 1995 and 2009, the new report details similar findings. Using data from the U.S. Bureau of Labor Statistics, the report concludes that the six Target of Opportunity clusters delivered almost 42 percent of private sector jobs and over half of its wages.

“These industries have grown faster than the region as a whole, despite the economic fluctuations and recent national recession,” the report states.

The new study “ends with the 2008-2009 housing bust and stock market collapse which prompted the most recent national recession, commonly referred to as The Great Recession,” according to the report.

The six clusters produced new jobs while the region generally lost them, the report continues. While the region only mustered a “slow increase” in average salaries, the clusters “substantially” increased them.

The largest cluster is diversified health care, which provided 11,810 jobs in the region in 2009. Its job growth rate was 18.5 percent compared to the region’s 6.1 percent loss. The average annual salary in the cluster – $29,794 – was 29 percent higher than the region’s.

Specialty food, flowers and beverages was the number two cluster, employing 9,393 people. But it offered only “marginally less job loss in comparison to the overall region” during the study period, due to irrigation problems with a “specific crop” in Siskiyou County and an associated loss of 570 farm-related jobs.

Conditions in this cluster are “volatile,” according to the report, due to water, energy and transportation issues.

But the building and system construction cluster weathered the housing bubble’s burst surprisingly well, generating a job growth rate of 16.7 percent. The third most job-producing cluster, its various industries employed 7,134 people. Building materials and supplies dealers saw stable conditions, lawn and garden supplies dealers reaped “significant growth” and residential construction firms experienced “job contraction” but “substantial wage growth.”

Soil amendment dealers are identified as a “growing sector” in the report, seeing a “dramatic increase” in its job numbers. Its high employment rate – six times the state average – “indicates that gardening, and likely marijuana cultivation, are driving this sector of the industry,” the report states.

The investment and support services cluster accounts for 2,578 jobs and saw an 8.9 percent job growth rate and high wage conditions. The Management and innovation services cluster employed 2,381 people and saw a robust 93.6 percent job growth rate while increasing wages by 27.4 percent.

Niche manufacturing wages nearly doubled and its job numbers increased by 45 percent.

The report also considers the condition of the region’s forest products and tourism industries, although they don’t meet job and wage growth criteria. According to the report, the forest products sector has been “shedding jobs” and tourist-dependent industries “do not meet criteria of increasing or offering higher than average wages” due to part time, seasonal employment scenarios.

Still, the forest products industry provides about 4,600 jobs in the region, with Humboldt and Mendocino counties being statewide leaders, and offers average wages that are 30 percent higher than the region’s.

The report only assesses private sector conditions, excluding a key contributor to the regional jobs base – the government sector. The report notes that “currently government occupations pay higher than private sector jobs in the region” but adds that “the fast growth of these high-wage Target (of Opportunity) industries could reverse this.”