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Economists: A changing workforce could impact the Central Coast economy

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Posted at 6:06 PM, Nov 04, 2022
and last updated 2022-11-04 22:46:08-04

The annual Central Coast Economic Forecast held Friday in San Luis Obispo highlighted the trend of younger workers moving from the coast to inland communities where housing is more affordable.

With younger members of the workforce leaving in droves, economists say it's important for the community to build affordable housing to maintain local growth.

Economist Taner Osman explained that the labor forces in inland California communities have recovered while in the coastal communities, there are 2.5% fewer people available to work compared to pre-pandemic times.

“The number of jobs in inland communities has increased by about 50%. At the same time, jobs added in coastal communities have grown by 15%," said Osman, Beacon Economics Manager of Regional Analysis.

The number of people older than 64 in San Luis Obispo County increased by 5.6% in 2021 and makes up 21.5% of the population in SLO County compared to 15.1% of the overall population in California.

The more worrisome statistic for the San Luis Obispo County economy is that of the working-age population, categorized as 25 to 64-year-olds.

In 2021, San Luis Obispo County saw that population drop by 4.4%. That demographic makes up 53.4% of California’s overall population but only 46.1% of the population in San Luis Obispo County — and the number continues to shrink.

Osman says inland communities have been adding population at a rate four times that of coastal communities.

“Inland communities have been adding housing at three times the rate that has been the case in the coastal communities," he said.

Osman pointed out that California has a deficit when it comes to lower-income workers — especially in coastal areas where the cost of living is high and housing is often unattainable.

“250,000 more low-income workers who have left the state than have moved to the state over a 10-year period,” Osman said.

He says the mass exodus could be blamed on the rising cost of housing.

“We don’t build multi-family in small economies in California. We don’t,” said Chris Thornberg, Beacon Economics Founding Principal.

Thornberg stressed the importance of building multi-family housing to attract certain demographics in the workforce including recent college graduates, young families and entry-level workers.

“These folks need apartments. You’re not going to buy a home when you’re 27. You shouldn’t. But if you want those people here to start businesses and continue to be part of this community and eventually buy one of those homes, you have to start with apartments,” Thornberg said.

In conclusion, economists said that San Luis Obispo County has the foundation for a strong economy but the current trend of younger workers moving away is not sustainable and for local growth to continue, the region needs to do a better job of providing housing for its workers.