While there are signs that California is making progress bringing down our unemployment rate and expanding business in the technology sector, there are also signs that the recovery is incomplete.
Wages for middle-income workers in San Diego have declined by 8 percent since 2008, manufacturing and construction in the area have declined by a combined 28,000 jobs over the same time, and poverty is becoming a greater problem for many lower-income communities.
A new study titled “San Diego: Energy, the Economy, and the Call for Pause” by the National University System Institute for Policy Research makes the case that San Diego is at a critical point, and calls on policymakers to assess California’s current energy and climate-related policies and develop a more cautious approach that will deliver on our economic and employment goals as well as our greenhouse gas reduction goals. It is critical that public policies with social goals, including those for climate change, be equally mindful of the economic impact on business and individuals.
Let’s all agree that California currently has the most aggressive and comprehensive climate policy in the world. This study and my request for a more thorough analysis shouldn’t be seen as stalling on climate change or retreating on our commitments.
But we need to really understand the many different climate and energy-related programs that are already underway across many different agencies and regulatory bodies. Careful analysis and better understanding of these policy impacts will help make sure that existing and new programs are not harming San Diego’s ability to retain and attract the jobs of the future. Plowing forward to claim victory as the climate change leader cannot and should not come at the expense of middle-income families who need jobs now.
The National University System study provides ample evidence that elected officials need to pay closer attention to San Diego’s job and cost impacts of current energy policies. According to the researchers, San Diego businesses pay some of the highest costs for electricity in the nation, and that difference creates a major competitive disadvantage. California has the second-highest gas tax in the nation, and we have unique policies such as “fuels under the cap” and the “low carbon fuel standard” that increase California fuel costs compared to our neighbors.
Higher electricity and fuel costs can particularly limit employment growth and investment in manufacturing and construction, industries that offer upward socioeconomic mobility. These industries pay wages high enough to sustain a middle-class standard of living, but they are under stress. That is a problem because there are fewer rungs for San Diegans to grab onto when trying to move themselves and their families up the socioeconomic ladder compared to places with larger manufacturing bases, bigger logistical hubs, or which have had a more robust construction recovery since the recession. Our region has numerous economic strengths, but economic mobility has become one of its biggest challenges. So we need policies that help grow jobs and opportunity, not make it harder.
Unfortunately, companies are interpreting the state’s current energy policies as added risk, and uncertainty about fixed costs is a major factor in locating jobs and facilities. Last year, Pratt & Whitney transferred 530 jobs out of San Diego. The company stated that the move was “necessary to maintain our competitiveness in the market, further leverage Pratt & Whitney’s network and best position the company for the future.”
Will other companies leave town, too? Or will they make new investments and create more jobs in San Diego? Let’s be sure they are not disincentivized from staying. Our elected officials need to make quality private sector jobs and economic growth a priority at the same level as climate change. Only a holistic approach to policy will support the success of our social goals as well as our region’s economic security.
Rorie Johnston is president of the Escondido Chamber of Commerce.