Wednesday, 10 March 2010

Revised Farm Job Estimates

Today, the CA EDD released revised employment estimates for counties. On Friday, the statewide revisions were released and the statewide loss in farm jobs between 2008 and 2009 was revised from -1,700 to -13,500. Does this mean that water has had greater effects than I forecast? No. Look at the geographical breakdown.

In the San Joaquin Valley, farm jobs declined from 191,700 to 186,200, a decrease of 5,500 or 2.87%.

For areas of California outside the San Joaquin Valley, farm jobs declined even more. Non-SJ Valley jobs decreased from 197,600 to 189,600, a decrease of 8,000 or 4.05%.

In percentage terms, the largest decline in farm jobs was in Imperial County. There were also significant declines in other Southern California areas such as Ventura, San Diego, Riverside, Orange, etc.

How does this compare to our forecast of 8,500 lost jobs in the San Joaquin Valley (made up of 5,400 farm jobs and 3,100 related non-farm jobs)? As tempting as it is to say that our prediction of 5,400 lost farm jobs was really close to the 5,500 job loss estimated by EDD, there is no way to know exactly because we don’t know how many jobs there would have been with full water. Perhaps farm jobs would have increased because of the increased labor supply due to the recession (an effect I have emphasized before). On the other hand, farm jobs might have decreased because of the recession effects including lower commodity prices/revenue and tight bank credit. Even though we can’t know for sure, I think it is safe to conclude from this latest data that our forecasts were very reasonable.

[Update 3/11: Since declines were larger outside the SJ Valley than inside, a reasonable conclusion might be that pumping restrictions had little/no effect and even our estimates of job loss were too high. I would caution against that conclusion. Within the SJ Valley, the farm job losses were concentrated in Kern and Fresno counties, the areas most impacted by water declines. The rest of the SJ Valley showed little change. So, I think water did have some impact and our forecasts were pretty close. It may be that our original 6,000 lost job estimate was more accurate than the revised 8,500 lost job estimate, but we have been working in the correct range all along. Water and agriculture remains a very small piece of the toll the recession is taking on the general economy (at most 0.1% of the statewide decline), and farming did outperform every sector of the economy but healthcare in 2009. And don’t forget that most of the water impacts are due to drought, not ESA pumping restrictions.]

If you are confused about the data revisions, see the previous post.

About the Author

Ethan Jacob

Author & Editor

I am Ethan Jacob Executive Director of the Center for Business and Policy Research at the University of the Pacific, where I have a joint faculty appointment in the Eberhardt School of Business and the Public Policy Program in the McGeorge School of Law..

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