[env-trinity] Fewer actual job losses linked to Delta and drought

Mark Dowdle - TCRCD mdowdle at tcrcd.net
Thu Sep 30 10:28:07 PDT 2010

*Fewer job losses linked to Delta, drought*

*Contra Costa Times-9/29/10*

*By Mike Taugher *

* *

A jobs plan that is part of Meg Whitman's gubernatorial campaign 
suggests that drought and Delta pumping restrictions might have cost 
California 95,000 jobs.

Senate candidate Carly Fiorina puts the number at 40,000.

Both are relying on early and outdated economic forecasts of what might 
have happened in 2009.

Now, the economist who developed those numbers and his toughest academic 
critic have joined together in a report that tries to determine what 
actually transpired.

Their conclusions: Those estimates of lost jobs are far too high.

Between 5,500 and 7,500 jobs were lost due to water shortages in the San 
Joaquin Valley last year, and most of the blame goes to the weather, not 
to environmental protection. One of the economists put the job loss 
attributable to environmental protections at 1,400 jobs and the other 
put the figure closer to 3,000 jobs.

By comparison, one of the report's authors said the housing downturn 
cost the region 76,000 construction-related jobs.

"Sure, the 2.5 percent decline in crop production had an impact, but the 
90 percent decline in home production and the more than 50 percent 
decline in nonresidential construction had a much bigger impact," said 
Jeffrey Michael, director of the Business Forecasting Center at the 
University of Pacific.

The Delta's problems captured national attention last year as drought 
and new restrictions on water pumping combined to cut supplies to farms 
and cities

that had been taking record amounts of water out of a collapsing Delta.

Despite the fact that drought was causing most of the shortages, talk 
show hosts and politicians took to blaming new court-ordered 
restrictions meant to prevent Delta smelt from going extinct. Protests 
were held in the hardest hit area -- the San Joaquin Valley's west side 
-- where bitter complaints were heard about fish being favored over jobs.

In early 2009, UC Davis economist Richard Howitt tried to predict the 
economic impact the drought and new restrictions on Delta pumping would 
have on San Joaquin Valley farms.

His first attempt resulted in a forecast that 95,000 jobs might be lost, 
but he revised that figure downward a number of times in response to 
much lower numbers put forward by Michael.

"Yes, it's a problem when candidates don't use the most recent and 
accurate figures," Howitt said in an e-mail. "I have tried to correct 
this, but this combined report should help put some of the outdated 
values to rest."

Whitman and Fiorina's opponents -- state Attorney General Jerry Brown 
and incumbent U.S. Sen. Barbara Boxer, respectively -- also have made 
references to problems in the Delta but they do not appear to have used 
the high job loss estimates as part of their campaigns.

The economists said the impact was concentrated in western Fresno, Kern 
and Kings counties, regions served largely by the nation's largest 
federal water district, the Westlands Water District, and the State 
Water Project's second largest customer behind Southern California, the 
Kern County Water Agency.

Howitt noted that economic impact was indeed severe in those regions but 
that voluntary sales among big water users significantly blunted the 
effects of shortages.

"Despite this, a 10 percent reduction in jobs is a severe impact for 
farmworkers on the west side," he said.

The economists used different methods for determining the actual impact 
of the drought and the new Delta pumping restrictions, but came up with 
numbers that were close.

Michael estimated water shortages caused farm revenues to decline by 
$340 million while Howitt put the figure at $370 million. In both cases, 
the figures represent a lot of money, but less than a 3 percent decline 
in San Joaquin Valley farm revenues.

Michael put the job losses due to environmental protections at 1,400 
while Howitt estimated 3,000.

If Michael's figure is correct, the number of farmworkers who lost their 
jobs due to environmental protection would be fewer than the 1,800 
fishing jobs he estimates were lost in each of the last two years due to 
the collapse in California's commercial salmon.

The San Joaquin Valley has been battered by chronic unemployment and the 
evaporation of the housing market, problems that dwarf the losses 
incurred by drought and recent environmental protections intended to 
prevent Delta fish from going extinct, he said.

"This valley has incredible problems, but our leaders are completely 
consumed with this one issue," Michael said.#

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