The warning signs normally would be blaring that this summer has all the makings of the genesis of a long recession for San Diego.
Retail sales have dropped to a four-year low nationwide; a labor crisis simmers locally as negotiators for the janitors union and janitorial service contractors stare each other down; and though prices at the pump have dipped a bit lately, the cost of a gallon of gas will continue to hover in the stratosphere throughout the busy summer travel season.
Indicators of hard times ahead? In the past, most businesspeople would be scurrying around like squirrels in the fall, hoarding what resources they could muster to make it through to the pending recession.
Maybe these signals are screaming out a warning, and maybe we’re too bright-eyed about this whole “new economy” we’re experiencing. Maybe it’s a touch of spring fever. But all we can see is a glowing economy in San Diego’s future.
Not to say we don’t take these indicators seriously. We are concerned that retail sales have slumped lately, likely caused in part by skyrocketing gas prices. Consumer borrowing costs have risen as well , five times since June, thanks to the Federal Reserve’s attempts to fight inflation.
Analysts also note a late Easter has something to do with declining March retail figures. Despite that, and the stock market’s continuing roller coaster ride, many economists point to the fact that unemployment is at its lowest point nationwide since late 1973, meaning people have money to spend.
Nationally, that figure hovered around 4 percent; locally, it dropped to 2.6 percent in February as the region added 34,900 jobs over the past year.
Such great news, however, must be tempered by the fact a labor stoppage has developed in the testy negotiations between janitors and janitorial service contractors. The janitors, who have been working without a contract since March 31, are seeking a 50-cent an hour increase annually for three years, health insurance and no benefit reductions. Contractors, however, want to spread the 50 cents over three years and are seeking a reduction in benefits.
A strike could include 21 Downtown office buildings, surely affecting the effectiveness of tenants to perform their jobs. A similar labor situation in Los Angeles has led to picketing in the streets by thousands of janitorial workers.
It is estimated there are 8,500 janitors on strike since the walkout began April 3.
We’ve no doubt already felt the pinch of soaring gas prices. Higher gas prices diverts funds from other purposes, whether it’s new office equipment or a new pair of jeans at the mall.
Yet despite an increase of some 40 cents for a gallon of gas over just two months, the economy is still gliding along. The long-term effects don’t appear harmful yet, but such a drastic hike in a daily commodity can take a serious bite out of profits.
That said, there are several other indicators that San Diego’s economy will remain vibrant. Major companies continue to relocate personnel here; business parks are booming, with available space in the hottest locations at a premium; the housing market continues to soar with no peak in sight; and perhaps best of all, the job market remains extremely competitive and wide-open.
We are indeed enjoying the fruits of an economic boom in San Diego. Pay heed to the warnings, but bask in the glow of an unrivaled economic summer , San Diego style.