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Is San Diego's Jobs Picture Dragging Down The Economy And Families?

Is San Diego's Jobs Picture Dragging Down The Economy And Families?
Heading into Labor Day, we bid an unofficial farewell to summer leisure and welcome the traditional beginning of the work cycle. In this stagnant economy, we'll continue to discuss job loss, an increased unemployment rate and, earning enough to make ends meet.

GLORIA PENNER (Host): All right, and so we’re going to wind up with this topic, Scott, and now that we’re on the threshold of Labor Day, yea, a three-day weekend! We bid an unofficial farewell to summer leisure and welcome the traditional beginning of the work cycle. But in San Diego County, this September we’re more likely to be talking about job loss, an increased unemployment rate to 10.8% and according to one just-released study nearly a third of working age households don’t earn enough for the basics. Scott, economist Alan Gin from USD just came out with his leading economic indicators for the county for July. His overall index is almost flat with some slight growth at .3%, that’s hardly anything. And he blames the stagnant economy on high unemployment and low consumer spending. But aren’t those the results of a stagnant economy rather than the cause of a stagnant economy?

SCOTT LEWIS (CEO, Well, that’s the chicken and the egg. I think that San Diego’s actually, from all indications, performing better than other places in California, if you can believe it. And that is largely because as some great research done recently from the National University Center for Policy Institute – I just get that a little confused.

PENNER: We have a lot of those policy institutes around now.


LEWIS: Right. Well, they made the point that, look, you know, San Diego saw, and this was incredible to me, a $1.9 billion increase in federal payrolls over the last year. And what that means is that as everything else is sort of crumbling, the federal government, through the military mostly, but not just the military, invested a ton of money in people’s salaries in San Diego, and that has kept us from falling in the same way that Phoenix and Miami have seen. For instance, those places lost upwards of 3% of total payroll in their metropolitan areas and then San Diego only lost 1.1%. And so you’re seeing this vast investment from the military and you have to conclude that, look, we’re being protected somewhat from this. What we’re seeing is not just a recession and the effects of that, what we’re seeing is the loss of our collective ATM as well. For years and years, we were living as a community off of the cash that we could pull out of the equity of our homes. Now, 30% of people who own houses owe more on those houses than those houses are worth and so this collective ATM that we had where we could go to the bank and say give us a home equity loan or give us a, you know, a loan on the equity of our property, that’s been lost and with it the ability to buy things, to expand our houses, to support the retail and construction sectors of this economy and so, you know, we have just – those service jobs, those retail jobs and those construction jobs are – have just been decimated and we’re only surviving the way that we are because the federal government is investing so much money here.

PENNER: But this study that I talked about…

LEWIS: Right.

PENNER: …not the Alan Gin study but the Center on Policy Initiative Study and…

LEWIS: Right.


PENNER: …I’m going to turn to John on this, says 3 out of 10 households aren’t making it. They can’t make ends meet. And so, you know, despite the federal infusion of money into San Diego, you still have 30% of San Diego households, according to the study, that aren’t able to pay their bills.

JOHN WARREN (Editor/Publisher, San Diego Voice & Viewpoint): Well, you know, this is not a totally new phenomenon here. What’s significant in this study is that it was done in conjunction with United Way and it comes at a time where we’re now beginning to look because the middle class and many people who were not affected in the past are now bothered. We see from the study that a single person needs to make at least $13.00 an hour when the federal minimum wage is $8.00 or they need to make a minimum of $27,000 a year to make it, and people aren’t making it even with folks working. And all of this comes on the heels of the allegations that we had earlier about the food stamp program and San Diego County not doing its best to get services out to people. And so it’s becoming a very serious issue in the sense that there’s a large element of our population, 229,000 households aren’t being, you know, are caught up in this. So the question is what do we do? And I think we really need a whole program dedicated to just this study.

PENNER: We do, and, you know, I was just warned by our director that we only have a few minutes left. I didn’t even get a chance to ask our listeners anything but I’m sure going to ask David a few questions. How much of this sort of discrepancy, let’s say, between what we earn in San Diego County, I mean, we’re $27,000 a year. In some parts of the country that would be okay. So how much of this discomfort of three out of 10 households not making it, how much of it can be attributed to the higher cost of living in San Diego combined with the lower wages?

DAVID ROLLAND (Editor, San Diego CityBeat): I don’t know the answer to that question but I agree with John…

PENNER: Take a guess.

ROLLAND: Well, no. I’m not going to take a guess.

PENNER: Okay. Okay.

ROLLAND: You know, I agree with John that this is not a new phenomenon. I think this trend was happening long before the recession. You know, what’s interesting about that study, I was looking at the numbers and it’s even conservative in terms of cost of living in the various categories. It talks about $234.00 a month in food for just a single adult living here. That’s $7.50 a day for breakfast, lunch and dinner. That’s not very much money, I don’t think. And also it had $169.00 I think a month in miscellaneous. And miscellaneous includes clothes and things like that. So I wish I could answer your question in terms of what’s attributed to what and – but I can’t. I just don’t think that this is a new thing. I think that the recession has exacerbated it. You know, one thing that I read recently, it was on Ezra Klein’s blog on the Washington Post, he was quoting somebody else, I’ve forgot who that was, really kind of hit home for California. The reason that, you know, San Diego may be doing okay, as Scott says, in terms of California. California’s not doing okay in terms of the United States and it’s largely because of, you know, we relied heavily on this construction boom. And those people now, let’s say – let’s just talk about people who are employed in the, you know, in building things. Those people bought a house that was at an inflated price that they couldn’t afford. Now, they’re underwater in terms of their mortgage. They can’t move to a place like North Dakota which is doing much better in terms of unemployment to get a job.

PENNER: Okay, we only have a few seconds left so as we go through our daily lives, Scott, how evident is it that people are having problems? That one out of three households aren’t making it?

LEWIS: Well, that’s a great question. I mean, we’re seeing it. You know, the fact that retail jobs and construction jobs are fought we’re still not in a position where we’re seeing the benefits of a expanding economy. I’m certainly not saying San Diego’s okay. I was just trying to make the point that because we’re the beneficiaries of such federal spending that we’re better off than other places. But the, you know, the fact is, is that this study was just a, you know, one-year, 2008 numbers. We don’t know if it’s getting better or if it’s getting worse or how it compares to other places. But there certainly is a lot of people on the brink of making decisions about how they’re going to allocate their money that is the type of scary decision that we don’t want to have to make everybody make.

PENNER: Scott Lewis,, thank you very much. And thank you, and John Warren, who’s from San Diego Voice & Viewpoint and David Rolland from San Diego CityBeat. This has been the Editors Roundtable. I’m Gloria Penner.