Economy slumping, future shaky

Jobs are evaporating at an unprecedented rate. Nearly one in four students aren't graduating high school. Steady progress in increasing health care access to the poor could backslide substantially if the state's proposed budget cuts to health services pass the legislature.

The worst housing crisis in at least four decades may not yet be half over.
And stagnant wages being eaten away by accelerating inflation, especially in food and energy costs.

Economist John Husing, who led a group of presenters at a closely-watched May 22 Symposium on Poverty and Economic Security in Banning, said energy costs and the housing collapse have been primary drivers of the region's pronounced downturn.

Husing showed the more than 200 people in attendance a chart showing oil prices more than doubling in just over a year, from $54.23 in Jan. 2007 to $122.08 in April 2008.
"This chart is deadly" to lower and middle class Inland Empire residents, Husing said.

James Masters, who served as a planner for the National Poverty Symposium last year, attended the local program to learn more about the Inland Empire's economy.

Masters said the economy hear mirrored the troubled outlook nationally, but is exacerbated by a series of local phenomenons, including the volatile housing market and high rates of undereducated migrants to the area, many of whom do not speak English.

In turn, the Inland Empire is particularly vulnerable to cuts dictated by Sacramento, Masters said.

"The state budget is a huge problem for the already strained health and education systems in the Inland Empire," Masters said.

Leaders in the fields of education and health care are sounding similar warnings.
Riverside County Superintendent of Schools Kenneth Young said Inland Empire schools are hampered by a combination of inadequate per pupil funding, rigorous curriculum and test score requirements, and large percentages of students from poor and non-English speaking households.

Young said California is already near one of the worst state's nationwide in terms of per pupil funding.

Young said failure in public schools portends a weakened economy. In a complex 21st century economy, high school diplomas are no longer gateways to even moderate living wages, and that a shockingly high number of students don't even get that far.
Young said 235 of every 1,000 Inland Empire kindergartners will not graduate high school.

"There is little of no place in the current workplace for these 235 drop outs," Young said. "And we often wind up housing them in our prisons."

Young said that for the area to build longterm economic vitality, its students must drastically improve. Young said schools need to establish early on expectations for every child for education beyond high school, whether career or trade schools, community colleges or universities.

"If we want to talk about economics and growth, we've got to have an educated workforce," Young said.

After the symposium, Masters pointed to Young's presentation, particularly the area's high drop-out rate, as key to any longterm economic plan.

"In this era, dropping out of high school is economic suicide," Masters said.

Husing, an economic forecaster of note, awed the crowd with his comprehensive report. The Inland Empire, he said, will add 2.1 million new residents between 2000 and 2020, more than all but a handful of states.

But in the near term, the area is downsizing economically, he said.

Sales taxes have shrunk here and statewide in 2007-8 after robust growth between 2003-5.

"This tells us that people are struggling," Husing said.

Per capita income is also plunging relative to the rest of the state. In 2006, San Bernardino County ranked 35th of 58 counties statewide in per capita income, down from 21st since 1990, Husing said.

"And we'll definitely slip" farther down in the 2007-8, Husing added.

Housing's dive plays a role, he said, with median prices down nearly $100,000, to $353,000 in the first three months of 2008 compared to the same period the year before, with no end in sight.

"We're probably about 40 percent of the way through this problem," he said of the housing slump.

The conference was held in the Morongo Band of Mission Indians Community Center, itself a conspicuous testament to the economic improvement of Native Americans communities.

A recurring theme echoed by speakers was the shortsighted of political policies in Washington D.C. and Sacramento, which often rein in investments in education and health care during economic downturns.

"At just the time when federal leadership in Washington should be adding funds," said Jamil Dada, chairman of the Riverside County Workforce Development Board. "We're being cut."

Dada said annual funding for his organization has plummeted in recent years from about $30 million to just $12 million, despite growing population and workforce needs.
A disproportionately large force of undereducated, low wage workers is a drag on the county's social and economic health, Dada said.

"The impact of working families without adequate income is hard on children especially, and we see it in health problems and school performance," Dada said.

Dada said the prescription for improvement is clear: A state earned income tax credit is needed for more tax relief for working families; welfare support for working families with children should increase; and affordable housing and health care must be made more available.

More strongly than the other speakers, Dada, who repeatedly noted his own immigrant origins, said immigration was hurting flooding the labor market and hurting native workers.

He said immigration of unskilled, uneducated immigrants needed to be drastically reduced.

As for visas for highly skilled immigrants, he said they were needed in the near term but that government workforce development funding should be directed toward building the native workforce first.

"We need to be giving these (high-skill) jobs to our own people," he said.

During a break in the speaker list, Masters said he didn't see how the Inland Empire could restore its schools and health care without more funding, particular from property taxes.

"At some point, California is going to have to bite the Prop. 13 bullet," Masters said.