Inland Empire Job Growth Soars; Only Outpaced by Silicon Valley

San Bernadino (Lucy Nicholson / Reuters)
Lucy Nicholson / Reuters

A year ago, the Inland Empire cities of Riverside and San Bernardino were ranked as “Among Slowest To Recover Since Recession,” in unemployment rates, median income and home prices. But those low costs have sparked a new economic boom as Riverside and San Bernardino counties’ job growth now only trails the Silicon Valley tech hubs of Santa Clara and San Francisco counties, according to a report released Thursday at an Ontario economic conference.

Numbers released two weeks ago by the State of California’s Employment Development Department reveal that the Golden State added a total of 471,200 jobs in 2014–more than 47% higher than the previous estimate of 320,300 new jobs. The revisions boosted California’s rate of job growth to 3.1% last year, much faster than the rate of 2.3% for the nation.

A big part of that employment surprise seems to have come from the Inland Empire, which was among the national regions hardest hit by the recession.

Chief Economist John Husing for the Inland Empire Economic Partnership (EPP) told the Los Angeles Times, “We were in a hole, but we climbed the ladder and now we’re out in the sunshine.”

From a near-national high of 14.2% in October 2009, the Inland Empire unemployment rate fell to 7.3% in January. Current employment is now over 1.31 million jobs after bottoming out at a low of 1.14 million jobs four years ago.

San Bernardino and Riverside were seen last year as two of the slowest-recovering large U.S. cities since the recession, according to an economic ranking from the consumer financial website WalletHub. When evaluated for economic growth across 18 metrics, both cities had some of the lowest home price appreciations, smallest decreases in poverty rate and least improvements in the ratio of part-time to full-time jobs.

But the low- and middle-wage families that dominate the Inland Empire are benefiting from new investment and substantially lower oil prices that are encouraging spending by making gasoline, food and other purchases more affordable, according to EPP.

The strong dollar that is eroding American exports is boosting the volume of imports flowing through the southern California ports to the Inland Empire’s vast network of distribution centers. Logistics is “the sector for which we absolutely have the greatest competitive advantage,” Husing commented.

Moreover, the changing economy has blurred the line between manufacturing and logistics as the production process is increasingly being broken up and scattered around the world. Husing told the Times he believes that the Inland Empire distribution warehouses could do double duty as factories where various component parts are assembled into a final product and delivered to customers.

This rising industrial demand has driven down vacancy rates in the Inland Empire from 12.8 percent during the Great Recession to just 4.5 percent today. The boom has motivated developers to put 16.9 million square feet of industrial space under construction at year end, about 80% of the total for all of Southern California.

Chief Executive of San Bernardino County Greg Devereaux warned that the Inland Empire was running out of buildable space, since much of the remaining land is either owned by the state and federal governments, or undevelopable for warehouse. He also complained that the new success is quickly overwhelming the area’s infrastructure.

Chief Administrative Officer of Riverside County Jay Orr was very positive about the opportunities for new single and multi-family construction. He told the conference that housing is cheaper than it is along the coast and more affordable for local populations.

“The coast will become too expensive and migration will continue into the Inland Empire,” said. “The jobs will come here because housing will be more affordable.”

Husing said that many of the high-skill engineering, finance, legal and information technology jobs consolidated or moved to the beach communities during the recession. He emphasized to conference attendees that it will be difficult to recruit higher paying high jobs, since only 20 percent of the Inland Empire’s working age population holds a bachelor’s or advanced degree. This statistic compares unfavorably with 30% for Los Angeles and 40% in the Bay Area,

The good news comes as San Bernadino’s municipality struggles with default and debt.


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