Nearly half of Monterey County’s private-sector jobs are in the region’s two biggest industries, agriculture and hospitality. That these two fields dominate our economic landscape is not new information. What is new is data at a granular level, region by region and city by city, in a report produced by Beacon Economics, set to be released on Friday, Sept. 20.
The report, paid for by the County of Monterey and the Monterey County Business Council using pandemic-era American Rescue Plan funds, is the first of its kind, setting forth benchmark data by jurisdiction.
Generally, it shows resilience since the pandemic – wages are up and jobs are up. From the third quarter of 2022 to the third quarter of 2023, the average wage in the private sector in Monterey County rose by 4.4 percent, better than California’s average 0.4-percent increase. Small businesses increased their workforces, while large businesses contracted.
While each city’s data varies, overall there is a rebound since pre-pandemic times: Monterey has 481 fewer jobs than pre-pandemic, Seaside has 468 more jobs and Salinas has 156 less. Some communities’ employment rose slightly, and others shrank over the same time period.
Economist Christopher Thornberg of Beacon Economics will present the report on Sept. 20, and he’ll share that overall trend on post-pandemic recovery. But he’s also looking ahead, and he has advice for policymakers.
“One thing that immediately pops out is the employment base hasn’t changed at all,” Thornberg says. “That’s due to lack of labor force growth and lack of housing growth. One thing the county clearly needs is more economic diversification.
“At one level what you see is good signs that important parts of the economy are moving forward. That being said, you’re not seeing the kind of diversification of the local economy that, for long-term sustainability and health, it really needs.”
Over-reliance on agriculture and hospitality means too few opportunities. And especially as the presence of technology increases in agriculture – the biggest private-sector employer by far, accounting for over 1 in 3 jobs – Thornberg sees a need for local people to have more diverse local job prospects.
His suggestion for a remedy sounds surprisingly simple. It doesn’t require courting a big tech giant or giving tax breaks to lure a mega-employer from somewhere else; it’s housing.
“Our problem is a lack of multifamily housing,” Thornberg says. “There’s not enough and we’re not building enough.”
His analysis is that more housing means more prospective workers, and that means more business owners can open up shop and find people to hire.
“Politicians get elected by telling people what they want to hear. What people want to hear is we can have lots of growth with no new housing, no new traffic and no new people,” Thornberg says. He blames NIMBY thinking for stalling housing growth.
(He also thinks rent control is the wrong direction – it’s a lack of supply that is the right problem to solve. “The increase in demand is driven by renter incomes, [which are] driven by tight labor markets,” he says. While I agree that supply is a problem we need to solve, I also think the desperate stories of tenants who need a place to live demand immediate protections.)
We’ve all seen the ubiquitous “help wanted” signs at farm fields and in restaurants. Even these dominant industries can’t hire enough people – there simply aren’t enough workers. And there aren’t enough workers, Thornberg says, because there isn’t enough housing.
“Monterey County has great bones,” Thornberg says, noting the unique, built-in qualities that make our agriculture and tourism industries the world leaders that they are. “It means the world can be your oyster, but it all depends on leading into change.”
Change is hard, as they say, but it’s coming. And if we want opportunities for today’s young people to find jobs that can support them and keep them here – something that seemingly everyone says they want – it’s going to require a serious effort at solving our housing crisis.
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