ARTICLE
Some interesting collection of projection data is flying around from a variety of sources from the US Census Bureau, the California Finance Department and our local source via a report by the Santa Cruz Workforce Development Board. Each analysis delivers a different perspective of the current economic picture and the projected future of California. Let’s start with the California Department of Finance, the state forecast paints a bleak view of what California will look like in 2060. The forecast from the state’s finance department comes on the heels of three years of unprecedented population declines totaling about 1%, as residents fed up with high housing costs and other quality-of-life concerns fled California in droves. According to the study, the forecast done in 2013 showed that California’s population would grow from approximately 40 million in 2013 to 52.69 million by 2060. Yet, the recent forecast notes after accounting for factors including declining births, aging residents, and more people moving away in the years leading up to and during the pandemic, officials now project the population will hold steady at around 39.5 million. Stephen Levy, the director of the Center for Continuing Study of the California Economy said, “There’s optimism the state’s tech and clean energy sectors, along with other engines of the California economy, will still attract workers, noting the state’s latest forecast is in “conflict with the continuing job growth predicted by all of the regional planning agencies in California.” Levy added that if the state can make progress on its ambitious goal to build more than 2.5 million market-rate and affordable homes by 2030, it should be equipped to accommodate more residents and prevent those now stuck in expensive and overcrowded housing from packing up and leaving. “Essentially, a no-growth population projection assumes that we fail miserably in producing more housing,” he said. A recent report by the Santa Cruz County Workforce Board shows an interesting parallel to state forecasting. When Santa Cruz County released its State of the Workforce report earlier this month, it offered concrete figures behind a demographic shift locals have been talking about for years: Santa Cruz County is going gray. Nearly 30% of the total workforce is at least 55 years old. Between 2017 and 2022, the 65-and-older crowd grew by 18% countywide, while the population younger than 65 shrank. As Chris Neely from Lookout Santa Cruz states, “And this silver tsunami is approaching Santa Cruz County faster than any other county in the state, according to the Seniors Council of Santa Cruz and San Benito County. Between 2010 and 2020, the county’s 65-84 age bracket grew by 81% according to Census data, compared to a roughly 40% increase statewide.” Upon his election in 2018, Governor Gavin Newsom began working on the Master Plan for Aging, a statewide roadmap for improving services and amenities for older adults as the population ages. By 2030, 1 in 4 Californians is expected to be 65 or older; in Santa Cruz County, that number is expected to jump to 1 in 3. The Santa Cruz County Workforce Development Board engaged BW Research to develop this 2023 State of the Workforce Report. According to the summary, “The Santa Cruz County workforce has experienced sizable changes in the wake of the pandemic. This report highlights the county's workforce, the growing and declining industries, and what that means for training and education, commute patterns, and workers' everyday lives. Additionally, the report explores the substantial increase in regional investment in infrastructure and housing and the potential impacts on the workforce responsible for executing these projects. The workforce in Santa Cruz County will continue to change, requiring continued efforts and support to ensure that workers are prepared for the changing employment landscape.” The report offers a mixed bag of results. On one hand, the report notes, “Despite overall lower job quality compared to the state averages, job quality in Santa Cruz County has improved in the past five years. Between 2017 and 2022, the share of Tier 1 jobs increased by almost nine percentage points, while the share of Tier 3 jobs has shrunk at the same rate. It is also noteworthy to mention that job composition is improving at a faster rate than state averages.” Job quality serves as a crucial measure of a region's economic vitality. For instance, if a region has a large number of jobs, but a majority of those jobs pay below a sustainable wage, it indicates that workers will struggle to live and work in the region. The unemployment rate in Santa Cruz County is higher than the statewide average by close to two percentage points, and three percentage points higher than the national average (Table 1). The county's labor force participation rate further suggests that the region's job market is still recovering from the pandemic, as it fell from 62% in 2019 to 59% in 2021. As for a data collection report, the 2023 Santa Cruz County State of the Workforce is a five-year snapshot of the trends from reflecting data of many of the similar trends faced by surrounding counties and the state during the pandemic years. The key takeaways are broken down into categories: - Living in Santa Cruz County: The south sub-region of Santa Cruz County has a younger population with a higher percentage of Hispanic and Latino residents.12, 30% of individuals over 24 years old, in southern Santa Cruz County, have not completed high school or an educational equivalent. - Four-in-ten residents are renters, and nearly half (45%) of renters, in Northern Santa Cruz County, spend 35% or more of their total income on housing. Furthermore, there are stark disparities in homeownership rates across racial lines, as illustrated in Figure 16. While efforts to address this issue are underway, continued attention is required, as this issue will continue to have sizable effects on the current and potential workforce of the county. - The county's population shrank by 4,800, primarily due to 5,000 people leaving Santa Cruz County to relocate to a state outside California. While the research does not provide specific demographics of those who left the county, housing costs are likely a significant driver of those who move out. An early 2023 statewide survey found that 45% of respondents said that the cost of housing makes them, and their families seriously consider moving out of state. The decrease in population also affects the size of the labor pool, as most who left were under 65 years old. (Note, a recent Census analysis released this spring shows an increase in population for Santa Cruz — because of the UCSC students returned to the region. The report provides a thorough outline of Infrastructure Workforce Needs where we have a shortage of skilled workforce despite the numerous projects throughout the county. For example, the County's 2022 to 2023 budget for road repair is 223% greater than it was four years ago. Flood control projects, and recycling and solid waste projects, will each receive about $10 million more than four years prior, amounting to a 159% and 55% increase in budget, respectively. Seven million dollars in additional funds for housing also represented a seismic shift in money flowing toward these projects. These projects are a direct result of having local dollars to match state and federal funds to the passage of the 2016 Measure D 1/2 cent sales tax, SB 1 state funds and the willingness of state and federal agencies to help our infrastructure improvements in Santa Cruz County. Investments in infrastructure and housing will drive demand for more workers in these sectors. For example, the County's 2022 to 2023 budget for road repair is 223% greater than it was four years ago. Flood control projects, and recycling and solid waste projects, will each receive about $10 million more than four years prior, amounting to a 159% and 55% increase in budget, respectively. Seven million dollars in additional funds for housing also represented a seismic shift in money flowing toward these projects. The magnitude of budgetary changes for these infrastructure and housing investments implies that the labor force for these sectors will also see a substantial increase in demand in the immediate future. The City, County and Cabrillo College are in the early stages of re-tooling training and apprenticeship programs that prepare workers for crucial infrastructure and housing construction roles, such as positions in construction trades, buildings, electrical, operating engineers, and construction management. Boosting the interest in infrastructure and construction-related careers and trades will require marketing and career education initiatives, as well as capacity-building support for training providers with relevant programs. The future of Santa Cruz County will be dependent on job creation, housing production and infrastructure improvements. Let’s keep an eye on these projects and others in the pipeline.
Some interesting collection of projection data is flying around from a variety of sources from the US Census Bureau, the California Finance Department and our local source via a report by the Santa Cruz Workforce Development Board. Each analysis delivers a different perspective of the current economic picture and the projected future of California.
Let’s start with the California Department of Finance, the state forecast paints a bleak view of what California will look like in 2060. The forecast from the state’s finance department comes on the heels of three years of unprecedented population declines totaling about 1%, as residents fed up with high housing costs and other quality-of-life concerns fled California in droves. According to the study, the forecast done in 2013 showed that California’s population would grow from approximately 40 million in 2013 to 52.69 million by 2060. Yet, the recent forecast notes after accounting for factors including declining births, aging residents, and more people moving away in the years leading up to and during the pandemic, officials now project the population will hold steady at around 39.5 million. Stephen Levy, the director of the Center for Continuing Study of the California Economy said, “There’s optimism the state’s tech and clean energy sectors, along with other engines of the California economy, will still attract workers, noting the state’s latest forecast is in “conflict with the continuing job growth predicted by all of the regional planning agencies in California.” Levy added that if the state can make progress on its ambitious goal to build more than 2.5 million market-rate and affordable homes by 2030, it should be equipped to accommodate more residents and prevent those now stuck in expensive and overcrowded housing from packing up and leaving. “Essentially, a no-growth population projection assumes that we fail miserably in producing more housing,” he said.
A recent report by the Santa Cruz County Workforce Board shows an interesting parallel to state forecasting. When Santa Cruz County released its State of the Workforce report earlier this month, it offered concrete figures behind a demographic shift locals have been talking about for years: Santa Cruz County is going gray. Nearly 30% of the total workforce is at least 55 years old. Between 2017 and 2022, the 65-and-older crowd grew by 18% countywide, while the population younger than 65 shrank. As Chris Neely from Lookout Santa Cruz states, “And this silver tsunami is approaching Santa Cruz County faster than any other county in the state, according to the Seniors Council of Santa Cruz and San Benito County. Between 2010 and 2020, the county’s 65-84 age bracket grew by 81% according to Census data, compared to a roughly 40% increase statewide.”
Upon his election in 2018, Governor Gavin Newsom began working on the Master Plan for Aging, a statewide roadmap for improving services and amenities for older adults as the population ages. By 2030, 1 in 4 Californians is expected to be 65 or older; in Santa Cruz County, that number is expected to jump to 1 in 3.
The Santa Cruz County Workforce Development Board engaged BW Research to develop this 2023 State of the Workforce Report. According to the summary, “The Santa Cruz County workforce has experienced sizable changes in the wake of the pandemic. This report highlights the county's workforce, the growing and declining industries, and what that means for training and education, commute patterns, and workers' everyday lives. Additionally, the report explores the substantial increase in regional investment in infrastructure and housing and the potential impacts on the workforce responsible for executing these projects. The workforce in Santa Cruz County will continue to change, requiring continued efforts and support to ensure that workers are prepared for the changing employment landscape.”
The report offers a mixed bag of results. On one hand, the report notes, “Despite overall lower job quality compared to the state averages, job quality in Santa Cruz County has improved in the past five years. Between 2017 and 2022, the share of Tier 1 jobs increased by almost nine percentage points, while the share of Tier 3 jobs has shrunk at the same rate. It is also noteworthy to mention that job composition is improving at a faster rate than state averages.” Job quality serves as a crucial measure of a region's economic vitality. For instance, if a region has a large number of jobs, but a majority of those jobs pay below a sustainable wage, it indicates that workers will struggle to live and work in the region.
The unemployment rate in Santa Cruz County is higher than the statewide average by close to two percentage points, and three percentage points higher than the national average (Table 1). The county's labor force participation rate further suggests that the region's job market is still recovering from the pandemic, as it fell from 62% in 2019 to 59% in 2021. As for a data collection report, the 2023 Santa Cruz County State of the Workforce is a five-year snapshot of the trends from reflecting data of many of the similar trends faced by surrounding counties and the state during the pandemic years. The key takeaways are broken down into categories:
- Living in Santa Cruz County: The south sub-region of Santa Cruz County has a younger population with a higher percentage of Hispanic and Latino residents.12, 30% of individuals over 24 years old, in southern Santa Cruz County, have not completed high school or an educational equivalent. - Four-in-ten residents are renters, and nearly half (45%) of renters, in Northern Santa Cruz County, spend 35% or more of their total income on housing. Furthermore, there are stark disparities in homeownership rates across racial lines, as illustrated in Figure 16. While efforts to address this issue are underway, continued attention is required, as this issue will continue to have sizable effects on the current and potential workforce of the county. - The county's population shrank by 4,800, primarily due to 5,000 people leaving Santa Cruz County to relocate to a state outside California. While the research does not provide specific demographics of those who left the county, housing costs are likely a significant driver of those who move out. An early 2023 statewide survey found that 45% of respondents said that the cost of housing makes them, and their families seriously consider moving out of state. The decrease in population also affects the size of the labor pool, as most who left were under 65 years old. (Note, a recent Census analysis released this spring shows an increase in population for Santa Cruz — because of the UCSC students returned to the region.
The report provides a thorough outline of Infrastructure Workforce Needs where we have a shortage of skilled workforce despite the numerous projects throughout the county. For example, the County's 2022 to 2023 budget for road repair is 223% greater than it was four years ago. Flood control projects, and recycling and solid waste projects, will each receive about $10 million more than four years prior, amounting to a 159% and 55% increase in budget, respectively. Seven million dollars in additional funds for housing also represented a seismic shift in money flowing toward these projects.
These projects are a direct result of having local dollars to match state and federal funds to the passage of the 2016 Measure D 1/2 cent sales tax, SB 1 state funds and the willingness of state and federal agencies to help our infrastructure improvements in Santa Cruz County.
Investments in infrastructure and housing will drive demand for more workers in these sectors. For example, the County's 2022 to 2023 budget for road repair is 223% greater than it was four years ago. Flood control projects, and recycling and solid waste projects, will each receive about $10 million more than four years prior, amounting to a 159% and 55% increase in budget, respectively. Seven million dollars in additional funds for housing also represented a seismic shift in money flowing toward these projects. The magnitude of budgetary changes for these infrastructure and housing investments implies that the labor force for these sectors will also see a substantial increase in demand in the immediate future.
The City, County and Cabrillo College are in the early stages of re-tooling training and apprenticeship programs that prepare workers for crucial infrastructure and housing construction roles, such as positions in construction trades, buildings, electrical, operating engineers, and construction management. Boosting the interest in infrastructure and construction-related careers and trades will require marketing and career education initiatives, as well as capacity-building support for training providers with relevant programs.
The future of Santa Cruz County will be dependent on job creation, housing production and infrastructure improvements. Let’s keep an eye on these projects and others in the pipeline.