In spite of all the worry about drought, homelessness and housing — and a temperamental stock market — the economy is doing just fine here on the North Coast. And the future is looking bright, at least for the next two years.
That was the rosy picture painted by economist Chris Thornberg before a crowd of some 450 people gathered at the Vineyard Creek Hyatt Friday. Among the many forecasts that Thornberg, founding partner of Beacon Economics, has delivered over the years, this was one of the most optimistic. “You have a wonderful two years ahead of you,” he told those gathered at the Economic Development Board’s annual breakfast.
And why not?
The county’s jobless rate has dropped to 3.8 percent, the sixth lowest in the state. The cost of living, although high for many who struggle to stay here, is more that 52 percent less than in San Francisco, and tourism, a key driver of the local economy, is soaring. Occupancy rates for the county are upwards of 80 percent. “Time to get some new hotels, folks,” Thornberg said.
And as Susan Gorin, chairwoman of the Sonoma County Board of Supervisors, said, the county is in the 95th percentile of counties in the nation in terms of wage growth. Joblessness is down not because people are leaving the labor markets but because they are finding decent jobs.
In addition, the region benefits from positive news on the national front, helped by low energy costs, increased retail and industrial activity and a “modest, solid expansion” of the economy. Thornberg rejected contentions that the nation might be back where it was in 2006. Some credit issues remain, but there’s no housing bubble, he said. “It’s not even close,” he said. “Housing is still a great deal. Go buy.”
Yes, America has some concerns about a “frothy” stock market, continued uncertainty over state and local budgets, and concerns about the global economy. “But none of these are a recession-causing event,” he said.
There remain some real concerns ranging from wealth inequality — 1 percent of the world’s population currently owns 50 percent of the wealth — to college debt, which averages close to $30,000 per graduate now. But Thornberg dismissed any suggestion that going to college may not be worth the cost anymore. “Getting a college degree is the best investment you will ever make,” he said.
The key question is whether Sonoma County will take advantage of the opportunities that the current economy present to attract companies that pay high wages. That day is coming, Thornberg said. He noted that the high-tech industry in the South Bay is “boiling over,” making it harder for companies to start and grow there. He said companies will start moving south toward Santa Cruz, east toward the East Bay and north to Marin and Sonoma counties. Sonoma County will be a particularly attractive destination given the availability and relative affordability of commercial space and the cost of living.
“That is going to start happening over the next couple of years,” he said.
The question the county needs to ask itself is what is it doing to ensure those companies with high-paying jobs find what they need here to thrive? This area has demonstrated time and again its skill at caring for those who visit. Caring for those who seek to stay has been a bigger challenge, but one that’s all the more critical in the long run.