AMBAG, the Association of Monterey Bay Area Governments, recently published its Preliminary 2012 Regional Growth Forecast of the population, housing, and employment situation through 2035. It’s important for San Benito County because we cannot afford a study of our own – we use these projections in our key plans such as the county’s general plan. A critical issue is what comes first – the people, jobs or houses – and what effect that will have on the way we grow.
All projections are overly reliant on history, but just like the disclaimer on your brokerage account says: “Past performance is not indicative of future results.” This warning is even more applicable to San Benito County because the county is neither large enough nor sufficiently active to be economically self-sustaining.
The AMBAG projections forecast a huge county population increase of 17,834 (32 percent) to 73,103 people between 2010 and 2020. Most of the new population, 12,656 (68.5 percent), is forecasted for the county’s current unincorporated areas.
San Benito County is a bedroom community for Santa Clara, Santa Cruz, and Monterey counties. It has all the earmarks – high per capita property values; a low level of local economic activity; and, most of all, a huge residence adjustment, which is the gross inflow of earnings from the inter-area commuters.
In 2011, the per capita taxable sales and use tax activity ranked the county 48th out of the state’s 58 counties. During the same period, the inflow of earnings from inter-area commuters was $772 million while the outflow was $215 million, resulting in a gross flow of earnings of $557 million. This is called the residence adjustment. San Benito had the fifth highest per capita residence adjustment in the State of California – $10,000.
Some elements of growth are obviously job generating. The best example is a retirement community where many residents do not depend on current employment for income, but do supply added population and spending power. Their relocation decision will rarely be driven by availability of employment. The primary factors will be affordability and all aspects of lifestyle.
The story is different for those in their primary earning years. New population will be driven by a combination of affordability and access to jobs. They will eventually generate some local employment, but before that happens most will need a source of current income – a reachable job or jobs for the working members of the household.
Santa Clara County is a breathtaking center of employment supporting much of Northern California with a 2011 residence adjustment of minus $18.8 billion in earnings. Earnings are the sum of three components of personal income – wage and salary disbursements, supplements to wages and salaries, and proprietors’ income.
Therefore, we are highly dependent on the economic vitality of Silicon Valley now and will be in the foreseeable future. San Benito and many other counties are poorly diversified. If Silicon Valley catches cold, we are going to get pneumonia. While Silicon Valley is certainly more nimble than old-line industries, those who believe that its economic dominance will go on forever in this expensive and overcrowded area need to keep two things in mind. The first is that the people working in the America’s once-thriving steel industry felt the same way, and the second is that nothing lasts forever.
We have to find a diversified economic identity that will map our future and see us through the inevitable fiscal storms with more certainty than AMBAG’s questionable projections – or our residents will not be able to assure their future security.
Marty Richman is a Hollister resident.
