The nature of work has changed in California thanks to the over reach and emotional decisions made by Guv Newsom. Many Bay Area firms are still telling employees to work from home. Even if that was not the case, San Fran has closed down the major street in town, Market St. from cars along with more than another dozen significant streets. It is almost impossible to drive into the City.
“In a webinar, “Forecasting the Future” organized by the Marin Economic Forum, Jim Wunderman, CEO of the business group, Bay Area Council, said the organization’s Economic Institute found that nearly half of all Bay Area residents have occupations that are remote work “eligible,” including 51% of those working in San Francisco County, 39% of the workforce in Marin, 32% in Sonoma, 29% in Solano and 26% in Napa counties.
Wunderman said more tech companies are predicted to look to a hub-and-spoke relocation model (37.3% of those surveyed by Initialized Capital’s Annual Portfolio Survey) while an additional 36.1% say a fully decentralized, remote work paradigm may emerge
Not mentioned are the major, 10,000 plus employees, firms that have left eh State. Also not mentioned are the massive number of small businesses that have been destroyed by the emotional lockdown. Even with rents in San Fran dropping 29% in one year, it is still the most expensive city to live in. This was a suicide by government of the people and jobs. Now they are complaining that folks are no longer working in town.
North Bay economy being pulled by remote worker shifts, state population exodus
GARY QUACKENBUSH, THE NORTH BAY BUSINESS JOURNAL, 3/3/21
Pandemic isn’t the only thing reshaping the economy of the North Bay and Bay Area by confirming the idea that workers can work from anywhere. Experts also said Wednesday that housing and taxation are driving people and business from the state.
In a webinar, “Forecasting the Future” organized by the Marin Economic Forum, Jim Wunderman, CEO of the business group, Bay Area Council, said the organization’s Economic Institute found that nearly half of all Bay Area residents have occupations that are remote work “eligible,” including 51% of those working in San Francisco County, 39% of the workforce in Marin, 32% in Sonoma, 29% in Solano and 26% in Napa counties.
Wunderman said more tech companies are predicted to look to a hub-and-spoke relocation model (37.3% of those surveyed by Initialized Capital’s Annual Portfolio Survey) while an additional 36.1% say a fully decentralized, remote work paradigm may emerge
An introduction to the forum was presented by Mike Blakeley, CEO of the forum, followed by an economic overview and forecast from Robert Eyler, the organization’s chief economist and dean of Extended and International Education at Sonoma State University. Marin County Supervisors Judy Arnold and Damon Connolly provided input on the state of recovery in Marin County, and Assemblymember Marc Levine representing Marin and Sonoma counties presented a recovery update at the state level. More than 275 individuals registered for this virtual presentation.
Third-highest unemployment
Wunderman noted that California’s unemployment rate was third highest in the nation with 9% unemployed as of December, up from 8.2% in November, based on U.S. Bureau of Labor Statistics.
The California Employment Development Department reported that Bay Area’s unemployment rate was 6.8% as of Dec. 20; Sacramento 8.5%; and Los Angeles at 10.7%. Locally, urban areas such as Napa saw unemployment at 7.3%, Santa Rosa 6.5%, San Francisco 6.1% and San Rafael 5.5%.
He reported that the Bay Area lost 321,300 jobs since the beginning of the pandemic with the highest losses seen in the leisure and hospitality sector (-31.5%), information (-8.6%), government (-8.5%), wholesale trade (-8.4%), manufacturing (-7.2%) and education and health services (-5.6%), based on EDD seasonally adjusted statistics.
During this period, Marin County experienced larger percentage job losses led by leisure and hospitality (-22.8%), personal services (-19.3), retail trade (-14.5%), wholesale trade (-12%), information (-11.5%) and government (-10.2%).
Residents are leaving California
Turning to the longer range picture, he highlighted the exodus from California and the Bay Area, along with other large urban U.S. cities such as New York. One example, as rents decline in some areas, like San Francisco (23.9%), they are rising destination locations such as Boise (+15%) or Dallas (5.2%).
As fewer people come to California, over a three-year period, its population declined by 430,452, the first time since annual counts began in 1900, according to Wunderman.
He cited figures which point to a lack of affordable housing. During 1955 to 1989, the average number of new housing permits issued statewide was 205,000. From 2006 to 2020, the average number of permits issued fell to 90,000, according to the Construction Industry Research Board and California Homebuilding Foundation Reports for 2005, 2013, and 2015.
“In 2018, the 9 Bay Area counties produced just 15,400 new housing units – with Marin’s share of that total at 100. That year some 1,500 babies were delivered at Marin General Hospital, where will these children live in the future?” Wunderman added.
Tax rates also may be driving people out of state.
Individual income tax rates here are at 13.3% while most other states are below 10% and many have single digit rates. Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming have none.
California’s corporate income tax rates are also high (8.84%), but below those in Pennsylvania, Iowa, Minnesota and New Jersey. By comparison, New York’s corporate tax rate is 6.5%. States without corporate income tax include Wyoming, Nevada, Texas, South Dakota and Washington.
At the same time, Wunderman said California’s general fund spending continues to rise with a 6.6% compound annual growth in general fund expenditures since 2011–2012, according to the California Policy Center.
