What’s the current state of the Inland Empire recovery, and where does the region go from here? These were two of the main questions answered by Manfred Keil, associate professor of economics at the Robert Day School of Economics and Finance at Claremont McKenna College, at the fifth annual Inland Empire Economic Forecast Conference.

Manfred Keil, associate professor of economics, Claremont McKenna College, gives the Inland Empire forecast during the 5th annual Economic Forecast Conference at the Citizens Business Bank Arena in Ontario, Ca., Wednesday, October 29, 2014. (Jennifer Cappuccio Maher/Inland Valley Daily Bulletin)

With regards to the current state of the recovery, Keil had good news to tell the audience of 650 at the Citizens Business Bank Arena in Ontario, CA. The headline for his presentation was the fact that the number of jobs in the Inland Empire has finally recovered, if one takes into account individuals who live in the Inland Empire but commute to neighboring counties to work. Keil also told the conference that the current projected unemployment rate of 8.7% in the Inland Empire would fall to 5.5% by December 2016. However, Keil underlined the fact that the job recovery might not be as good of news as one might initially think. Keil stated that, while “growth in employment has been going well,” “the kinds of jobs that have been generated now are not of the highest quality.” Specifically, he said that “we have replaced jobs in construction and manufacturing in particular with jobs in leisure and hospitality and, to an even larger extent, in education and health, and those are not as high-paying as the ones before.” Therefore, moving forward, the challenge is how one might bring higher paying jobs into the Inland Empire.

Both Keil and Edward Leamer, economics professor at UCLA and director of the UCLA Anderson Forecast, underlined the need for a more educated workforce in the Inland Empire. Currently, according John Husing, chief economist for the Inland Empire Economic Partnership, only 20.1% of people in the Inland Empire have an bachelor’s degree or higher. This statistic is stark in contrast with figures of 30.1% for Los Angeles County and 37.1% for Orange County. Keil stated that “we have to make the area attractive to businesses to come here, and I think the only way to do this is to have a better educated labor force that will be highly productive.” Leamer agreed, stating that “we don’t have a workforce that is suited to the post-industrial age. Now, the problem with workforce development is it takes a couple of decades to get a kid ready for a high-quality job, but we as a nation need to recognize that investment in our kids in the No.1 job of our parents and grandparents.”

In addition to a better-educated workforce, Keil offered a few recommendations to policymakers in the Inland Empire to bring back manufacturing jobs that were lost during the Great Recession. Among his recommendations were tax credits and special economic zones that would create incentives for manufacturers to return to the region. Keil stated that he believes that policymakers need to “give the manufacturer some incentive to locate here initially. There’s always the talk about loosening environmental regulations, and I’m never quite sure of what to make of it. I’m sure regulation here is heavy, but that did not deter people in the past from coming here. There are so many reasons why people want to come to Southern California.” On a side note, Keil also recommended that policymakers stay away from raising the minimum wage in the region, as “increasing the minimum wage would have a detrimental effect on the continuing growth of the leisure and hospitality sector.”

To learn more about Claremont McKenna College’s Inland Empire Center, visit inlandempirecenter.org.

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