LAKE COUNTY >> The unemployment rate in Lake County decreased by more than 1 percentage point in 2015 compared to the previous year, the Lake County Regional Economic Development Committee report in a recently released study of the county’s economic picture.
The data, compiled by the California Employment Development Department, revealed that the seasonally unadjusted unemployment rate dropped to 7.3 percent in December 2015, compared with 8.6 percent in the same month in 2014.
The county mark is still well above the state (5.8 percent) and national (5 percent) rate. But according to Sonoma County Economic Development Board (SEDB) Research Project Coordinator Brian Marland, it represents a significant improvement to the 17.8 percent jobless rate recorded in 2009 at the height of the recession.
“The unemployment rate has been getting close to the California average,” Marland said. “Getting closer to that average definitely shows that [the county] is recovering.”
The evidence suggests this is part of a regional improvement.
Robert Eyler, a long-time economics professor at Sonoma State University, explained that most citizens commute to work in Sonoma, Mendocino, and Napa counties due to more industries and thus more jobs.
“It doesn’t take a rocket scientist to drive down Highway 29 in the morning and see the outbound traffic,”Eyler said. “This is more due to what’s going on regionally.”
Another member of the county committee, Clearlake City Manager Greg Folsom, further noted there hasn’t been a significant surge in job growth in the county.
What seems to be driving prosperity are the boosts in the northern parts of Sonoma and Napa, especially for its tourism industry and real estate markets. According to the state’s EDD, Lake County’s southwest neighbor has an unemployment rate of 4.1 percent as of February, down from 5 percent in the previous year. Napa County also created more new businesses in 2015.
“The northern parts have had great growth,” Eyler said. “My guess is there’s some folks in Lake County that are working as contractors in Napa, Sonoma counties are commuting.
More Money in the pocketbooks
With more job creation in the region and California’s recent increase in minimum wage to $10 an hour, median household incomes in Lake County have also shot up near $37,000. The number of households earning less than $35,000 fell by 4.6 percentage points since 2000.
“I would assume that as unemployment goes down, your household wealth has gone up,” Folsom said. “I don’t think there’s a surprise…We are benefitting from the general economy growth just like everyone else is.”
And residents are spending it locally, too.
In fact, Marland said the report indicated that taxable sales of goods and services are approaching pre-recession levels. This means that consumer confidence and spending is rising.
“People were spending much less,” he said, regarding the economic downturn. “That new money is going to be creating more jobs in Lake County.”
The stimulus can be seen on Lakeport’s Main Street, where at The Soap Shack Baby owner James Meek said he saw revenues double from 2014 to 2015. Even the first four months of this year have been a better start than the last, he added.
The recent surge in customers and sales has brought his new business — open for three years — to the break even point on the books. If the good times continue, he may able to earn a profit by the end of the year.
“It seems like people are having more to spend especially on our product, it’s an alternative to commercial soaps,” Meek, who serves a mostly young adult female demographic, said. “I’m pretty optimistic. Of course you never know, but it seems to be coming around.”
Sans Valley Fire
According to Jim Cassio of the Napa/Lake Workforce Board, this report did not take into account the economic data that resulted from the catastrophic fires.
However, he said he believed that those impacts such as job loss and business destruction won’t affect the positive outlook and growth that was also predicted by the report.
“We’ve lost some businesses, but in the grand scheme of things, it still only affected a small percentage of the county’s businesses and its population,” Cassio said.
Released in Mid-March, the Valley Fire Survivor Survey conducted by the county found that 33 percent of households affected by the Valley Fire had suffered a job loss and only 10 percent of those people have found another job. Additionally, two-thirds of home-based businesses (the most impacted segment) haven’t been able to rebuild due to financial struggles.
If the number surveyed is an accurate representation of data, this means that approximately 460 households suffered a job loss, a little more than one percent of the county’s reported employment numbers reported by the EDD.
Eyler also continues to be optimistic and sees opportunities for Lake County’s financial future in the long term aftermath.
“While the fires were very tragic, the one shining light is that there is an opportunity to rebuild in such a way that can make Lake County better than before,” he said.
What businesses can expect immediately are boosts to construction, retail sales increases, and restaurants as people will need these for their recovery, the professor further explained.
The long-term, though, isn’t clear to him. What is needed is a careful, honest analysis of the industrial strengths in the county and an attempt to improve its perception.
“It’s a very tricky riddle to solve,” he said. “I get a little nervous about saying what Lake County’s supposed to be doing because it is such a mixed bag.”
There was, however, a consensus: there needs to be more focus and effort into Lake County’s wine industry, which despite the competition from its Napa and Sonoma cousins, is expected to increase by more than 20 percent by 2020.
“It has the opportunity to evolve and help the Lake County economy and provide more, better jobs at the same time,” Cassio said.
The report — researched, complied and presented in association with the Sonoma County Economic Development Board — also showed further positive results in the region’s economic picture including the price of homes.
