The tri-county region has lost more than 30,000 jobs in the past two years, with Ventura County suffering the worst declines and Paso Robles potentially leading the way in a slow recovery.
With 22,100 fewer jobs on nonfarm payrolls between September 2007 and September 2009, Ventura County has been hit the hardest and may take the longest to recover. That’s because many of its lost jobs — such as those that vanished when Countrywide Financial Corp. collapsed into Bank of America’s reluctant arms — won’t come back in a similar form.
No single industry stands poised to replace all those Ventura County jobs. “We’re going to have to hit a lot of singles rather than one or two home runs,” said Sung Won Sohn, an economist with California State University, Channel Islands, near Camarillo.
Santa Barbara County, which lost 4,900 jobs over the past two years, may feel some positive effects as tourism and consumer spending climb back from their lows. But continued suffering in finance and other industries might mute that boost, economists say.
It’s San Luis Obispo County, which lost 3,400 jobs and led the way into the slump with earlier job losses than Santa Barbara or Ventura counties, that could recover soonest. Sensitive to consumer spending and in-state “staycations,” it’s poised to benefit from scaled-down vacation plans from Los Angeles and the Bay Area.
And economists say Paso Robles’ combination of a willing city government and new commercial development could give it a leg up in regaining jobs. “They may be the most rapidly recovering community in the Tri-Counties,” said Bill Watkins, an economist with California Lutheran University.
The Business Times used U.S. Bureau of Labor Statistics seasonally adjusted nonfarm payroll data for metropolitan statistical areas to conduct its analysis. Actual job declines may have been steeper — the figures reflect only net losses. Here’s a closer look at what economists had to say about each county’s prospects.
Ventura County has seen a sharper decline in payrolls than the U.S. average in part because it was hit hard by cut backs at Thousand Oaks-based Amgen, which shed hundreds of high-paying jobs in the summer of 2007, and Countrywide Financial Corp., the Calabasas-based mortgage company undone by its subprime lending practices.
“The good news is that probably the worst declines are behind us,” said Sohn, who previously worked as the chief economist for Wells Fargo.
The bad news is that the many of the Countrywide jobs or similar ones may never come back, and it will likely take many quarters of healthy profits before Amgen begins adding jobs in a big way.
“It probably will take years before we can reach the previous level of employment,” Sohn said.
Watkins concurs. Though still building a precise model for a Ventura County jobs recovery, he suspects the results will be measured in years rather than months.
Regains in consumer spending could help boost activity at Ventura County’s ports, which have been hit hard by declining shipments of automobiles, Sohn said.
“Cars have pretty much stopped coming — the docks are empty,” Sohn said. “But I think with economic growth, people will buy more cars, from BMWs to Hyundais.”
Sohn said the region’s general strengths are in health care, education and services. He pegs job growth to the service sector — as people migrate from Los Angeles and Orange counties to Ventura County, they’ll generate demand for those services. Sohn said he’s already seeing evidence of migration in home prices in Westlake Village, Thousand Oaks and Camarillo.
“We will see more and more people moving from L.A. County and Orange county to Ventura County because the cost of living is lower, housing prices are lower, the air is cleaner and there’s less congestion,” Sohn said. “Part of [Ventura County’s job recovery] will be growth related to in migration from other counties.”
Watkins also said services will take a lead.
“I don’t see manufacturing doing it. The military presence is not likely to grow. The state is avoiding doing anything with oil, so that won’t do it, regardless of what’s offshore,” Watkins said. “It’s probably going to be business services, and that’s going to take a while.”
Santa Barbara County
In Santa Barbara County, the housing bubble did less to hobble payrolls than state budget cuts, which hit major education-sector employers hard.
“Santa Barbra’s South County held up pretty well for a long time because it hadn’t seen much growth and wasn’t hit by the housing problem,” Watkins said. “But now you’re seeing effects in [Santa Barbara City College and the University of California, Santa Barbara]. Those jobs could be a long time in coming back.”
Brad Kemp, director of regional research for Beacon Economics, said a return in consumer spending on tourism could have a “strong positive effect in Santa Barbara, but that’s going to be mitigated by continued losses in other services.”
In particular, Kemp said, everyday small businesses that had a hard time in tony Santa Barbara anyhow, such as nail salons and dry cleaners, “have really gone through their cash cushion. They’re going to continue to feel those losses for some time.”
Watkins said Santa Maria and northern Santa Barbara County will probably regain ground before the southern part of the county.
“For one thing it has a lot of cheap housing,” Watkins said. “It doesn’t have a lot of an industrial base, but it seems to have the housing and the workforce there that should allow it to come back sooner.”
Kemp believes the worst is over in San Luis Obispo County. The county’s large number of jobs that are sensitive to consumer spending meant it suffered job losses starting early, back in 2006. But that means it’s poised to benefit from a rebound in consumer spending.
“My feeling is that if there’s any rise in consumer spending, you’re going to see a cumulative positive effect,” Kemp said. “It led the way in, and it will lead the way out.”
In particular, SLO County will benefit as residents of Los Angeles or the Bay Area who experience small gains plan their leisure time.
“These people might have wanted to go to Europe or somewhere for a very exotic vacation, but they just can’t do that this year, so they’re going to sample the wonderful wines in Paso Robles,” Kemp said. “We know there’s still demand for vacations, but where will people go? Ninety percent of people out there still have jobs and are still making money. Maybe their asset values are down, but it’s not going to stop them from taking any vacation at all.”
Kemp singled out a new commercial development anchored by a Lowe’s in Paso Robles as a sign of potential for recovery. Watkins also noted the city’s potential for recovery.
“I’ve got this image of Paso — it’s a city that all pulls together and manages to make itself work,” Watkins said. “They’ve got a pretty strong consensus that they want economic opportunity. The city reacts fast for a California city to do what they can to make things happen.”