S1: Welcome in San Diego. It's Jade Hindman on today's show. Our region has a wonderful climate year round , perfect for walking from point A to point B , but just how easy is it to do that ? A panel of guest join me in studio to discuss. This is KPBS Midday Edition , connecting our community through conversation. So San Diego's unemployment rate dropped slightly in its last numbers , but remains at the 5% mark , which is one of its highest levels in years. Now that news comes around the same time the Federal Reserve cut interest rates by a quarter point last week. So how do these two things connect here to tell us more is San Diego's current economic about San Diego's current economic policy rather and outlook is Daniel Inagaki is the chief economist at the Policy and Innovation Center. Daniel , welcome back to Midday Edition.
S2: Thanks for having me.
S1: So glad to have you here. So you say one of the big economic stories for 2025 is unemployment. You know , people are searching for jobs. There just aren't enough to go around.
S2: Um , anytime we're looking at a big aggregate thing like unemployment , there's tons of contributing factors. And so it's hard to narrow it down to say , well , you know , it's because of this or that one thing that unemployment is going up and these things are cyclical. Um , but as a general rule , I would say , uh , when the current administration came in , they proposed a number of policies that were not great for employment. Um , so we saw , for example , um , you know , tariffs , right. Tariffs are , um , going to make things more expensive. It's , um. Uh , you know , we focus on. Oh , could we bring more manufacturing jobs to the United States ? But , um , for every one company that is going to produce steel in the United States , there might be 50 companies that that were using inexpensive steel that's being imported to build products that they can make money on. Right. And so , um , with , with the implementation of tariffs , you see , uh , that it's just harder to make things that are affordable for your customers. Right. So a lot of businesses closing , that kind of thing. Um , there's a there's a number of factors that are involved in. And also the other thing is that the economy has not been quite as strong as we thought it was going back to April of 2024 during the previous administration , because we just had a revision of the jobs numbers , which is , you know , this process is kind of a really involved one where every month you get the last month's worth of data in an estimate , but then those estimates are revised a couple of times before we end up at the final thing. And and the last revision was the most negative revision we've ever seen. Almost a million jobs , less than than we thought existed in the US economy were there. And so , you know , a lot of people talking about vibe session , the the economist Katherine Edwards has used the term ghost recession. You know , uh , the economy was not as good as some of the numbers suggested. And so some of those intuitions of this economy sucks might have been right , you know. Wow.
S1: Well , I mean , on those job numbers , the Trump administration has been looking to change how job data is released.
S2: So a perfectly normal jobs report came out that involves some revisions. And it was absolute standard practice. And , you know , the BLS has been led by really professional , nonpartisan people who are incredibly talented PhD economists and , um , and , uh , the president didn't like the numbers and didn't like the vision. And so he accused the person in charge of being somehow dishonest or something or partisan and , and fired them and replaced them with somebody who is a loyalist , somebody who is , you know , widely viewed as kind of a yes man. And , um , and that person has even suggested that we might suspend having monthly reports on the unemployment situation , which would be really terrible , you know , because businesses rely on this information to make their decisions about production. You know , if if unemployment suddenly surges , you could reasonably expect that demand for products and services might decrease. And so when you're making those investment decisions , you really need high quality information. And so replacing this very professional , nonpartisan staff with your kind of , you know , loyalist and maybe even cutting back on the information. It would be a real , a real disservice to the American economy.
S1: Yeah , everyone's flying blind at that point. Yeah. And BLS , for those who don't know , is the Bureau of Labor Statistics. That's right. Okay. All right. Well , you know , despite the challenges in the labor market , the stock market , though , remains strong.
S2: Um , you know , we have ten companies that are basically driving a continued increase in the S&P 500. Now , that doesn't mean that all companies are doing great. It doesn't mean that the whole stock market is doing great. It just means that some of the top performers are performing very well. Um , I think there are a lot of theories flying around about why the stock market seems to keep doing so well when the real economy , you know , jobs and things like that are struggling. Um , but certainly AI and the promise of , of the value that could be delivered by that development is , is a big part of it.
S1: Um , you know , another question here is , you know , this week , the Trump administration also announced a $100,000 annual fee for H-1b visa applications. Can you explain what that what that is the H-1b visa and how that could change our economy here in San Diego ? Yeah.
S2: So if you want to bring in somebody who's really talented , who is not a US citizen , and you want to have them come in and or even a permanent resident , you want to have them come in and work with your company , um , to do something that you might struggle to find people locally who could do , You , uh , you get them in H-1b visa , and , um , it's a really great program. The United States benefits in a way that no other country in the history of the world has benefited from , which is that we are a place that people all over the world want to be the best and the brightest around the world want to come here for our top tier , you know , higher education opportunities for our world's largest economy. All of that draws people to the United States , and we have the opportunity to kind of take the best and brightest , the the cream of the crop from around the world and invite them into the United States to help us grow our economy. And , you know , a lot of people say we should staple a green card to every master's degree and PhD that we had , you know , issue for people who are coming here for these kinds of advanced training , who could do really high productivity work by increasing the cost of the H-1b visa , we're discouraging companies from being able to bring in those best and brightest from around the world. And I think that's a that's too bad. I also think that there's a real problem and there will likely be legal challenges. I think maybe you already have been to the fact that the administration can kind of unilaterally exempt companies from from this charge , which really puts the administration in a position of being able to say , well , if we like you , you can have H-1b visas , and if we don't like you , you can't. And that's that's is a potential for favoritism.
S1:
S2: One I maybe don't know of. Off the top of my head , I would say certainly , you know , biotech is one of our leading really highly technical Nickel industries or sectors. Um , and uh , and certainly we have a lot of , uh , foreign born workers in that , in that field so that that could be one of the highest hit. But , you know , one of the things that's so unique about San Diego is that we live right on the border. And what that means is there is this , um , nearby region that has a significantly lower cost of labor. And so and then we have this region that's got incredibly high education , and we can partner with them to produce things like , uh , medical devices and things like that.
S1: And quickly , Federal Reserve lowered interest rates by a quarter point.
S2: It takes a long time and it takes a variable amount of time , so it's very difficult to predict how long it will take for that change. Now it's also a small change. We expect a couple more changes , more decreases in in this year and the next. Um , so , you know , that's a it's a good thing , but it will at least for unemployment. Um , but it will take time to work its way through the economy. And it's very difficult to predict how long.
S1: Oh , boy. Well , I've been speaking with Daniel and Amar , chief economist at the Policy and Innovation Center. Daniel , as always , thank you for stopping in and thanks for your insight.
S2: Thanks for having me.
S1: That's our show for today. I'm your host , Jade Hindman. Thanks for tuning in to Midday Edition. Be sure to have a great day on purpose , everyone.
San Diego's unemployment rate decreased slightly to 5% in August, yet still hovers near a four-year high.
Tuesday on Midday Edition, we check in with a local economist on the latest unemployment numbers. We also dig into why the Federal Reserve decided to lower interest rates, and how ongoing uncertainty around economic policy continues.
