9/21/20151 Coachella Valley 2011 Competitiveness? John Husing, Ph.D. Economics & Politics, Inc.

After Losing 8.36 Million Jobs … U.S. Job Creation Is Crawling Back +23.1%

V Pattern of Likely Recovery U x x

Fear Causing Consumers Confidence To Dive Again

9/21/20155 So. CA Job Change, e -488, , % +4.2%

9/21/20156 Inland Empire Job Change, e +20, , % -0.6%

9/21/20157 Coachella Valley, Job Changes -1, , %

9/21/ nd Worst National Unemployment Rate

9/21/20159 What About the Future? … Look At Competitiveness

Labor Cost: 6 th Lowest of 9 Markets 9/21/201510

Labor Force Quality: 8 th Lowest of 9 Markets 9/21/201511

Office Space Cost: 5 th Lowest of 9 Markets 9/21/201512

Industrial Space Cost: Lowest of 9 Markets 9/21/201513

Natural Gas: 3 rd Lowest of 9 Markets 9/21/201514

Electrical Cost Highest of 9 Markets 9/21/201515

Home Prices 8 th Lowest of 9 Markets Indio 5 th Lowest of 9 Markets 9/21/201516

Water Surprisingly Inexpensive 9/21/201517

State Taxes 9/21/ State Business IncomeIndividual IncomeSales TaxGasolineProperty Tax Unemployment Tax (Avg) California8.84%9.55%8.25%46.1$1, % Oregon7.90%9.00%0.00%25$1, % Nevada0.00% 6.85%33.1$1, % Arizona6.97%4.24%6.60%19$1, % Texas0.00% 6.25%20$1, % Colorado4.63% 2.90%22$1, % Washington0.00% 6.50%37.5$1, % New Mexico6.40%4.90%5.13%18.8$ % Utah5.00%0.00%5.95%24.5$ % Highest 2nd Highest 2nd Highest

Policy Conflict: Environment vs. Jobs State Regulatory Environment

Public Health Asthma & Cancer Blue Collar Sectors Bring Rising Asthma & Cancer Risk From Airborne Toxics

Social Justice Blue Collar Sectors Hurt Modest Income Families Living Near Factories, Rail Yards, Ports, Freeways

California Solution Single Issue Regulatory Agencies CA Air Resources Board South Coast Air Quality Management District CA Environmental Protection Agency CA Water Resources Control Board & More

Two Results 1. Air Quality Is Improving

Blue Collar Blue Collar Work Is Much of Our Workforce’s Best Chance Middle Class To Reach The Middle Class 2. Downward Pressure On Blue Collar Jobs

Few Training Barriers Few Training Barriers To Beginning Employment Mining ($96,996)Blue Collar Manufacturing ($47,933)Blue Collar Logistics ($46,665)Blue Collar Wholesale Trade ($43,492) MedianBlue Collar Construction ($41,453)Blue Collar Retail Trade($28,840) Gaming($28,385) Hotel/Motel($24,019) Agriculture ($22,793) Eating & Drinking($15,132) $13,000 Gap

Results Of Job Suppression Unemployment Higher Than It Needs To Be Underemployment A Constant Difficulty Leading to the Middle ClassLack of Access to Jobs Leading to the Middle Class Health Issues of Poverty Divorce Spousal Abuse Drug & Alcohol Abuse Suicide Lack of Timely Medical Care Public Health Issues!

Over 60% Of These Populations Also Stopped Their Educations With High School or Less Schooling Social Justice Issue Suppressing Blue Collar Jobs Is Also A Social Justice Issue

Clean Air, Asthma & Cancer Are Health & Social Justice Justice Issues Health & Social Lack of Blue Collar Jobs & Poverty Are Health & Social Justice Justice Issues Public Policy Dilemma

Concentrating Solely On The Environment After Years Of Focus on Concentrating Solely On The Environment Forgotten Priority! Job Creation Is Our Forgotten Priority!

Competitiveness 9/21/ Coachella ValleyC CaliforniaF-

Gold Mine Theory Primary Tier Secondary Tier

Economic Base Grades 9/21/ Competitiveness D thanks to CA Construction Hotels & Conventions Tourism Tourist Shoppers Agriculture Clean Tech Creative Arts Distribution Retirees Health Care Manufacturing

9/21/ Existing Homes Sales Remain Strong … Thanks To Short Sales/ Foreclosures

New Homes Sales Headed For A Record in 2011 … Thanks To Short Sales/ Foreclosures 9/21/201534

9/21/ Existing Home Prices Stable Between 2002 & 2003 Level

9/21/ New Home Price Back To 2004 Level … Well Above Existing Homes

Foreclosures Issue 1,086,305 Homes In Inland Empire 35.4% All Homes

Assessed Valuation UP … Next Move Is UP?

9/21/ Demand Soaring CV Housing Affordability Sets A Record & Drives Demand 64% 14%

Competitive Housing Prices 9/21/201540

Economic Base Grades 9/21/ CompetitivenessD thanks to CA ConstructionD- Hotels & Conventions Tourism Tourist Shoppers Agriculture Clean Tech Creative Arts Distribution Retirees Health Care Manufacturing

Wheeler’s Desert Letter Hotel Rates, Coming Back! 9/21/ Corporate Meetings & Conventions Coming Back 2 nd quarter 2011 Coachella Valley hotel occupancy up 14.8% Average room rate up 5.4% Palm Springs Desert Community Convention Bureau Labor Day hotel occupancy is 25% higher than 2010

Airport Volume Flat 9/21/ Need More Flights To Compete With Phoenix-Scottsdale

Increased Tourist Options: Thermal Motor Sports Park 9/21/201544

Retail Sales … Stronger This Year! 9/21/201545

Economic Base Grades 9/21/ CompetitivenessD thanks to CA ConstructionD- Hotels & ConventionsC+ TourismC+ Tourist ShoppersC Agriculture Clean Tech Creative Arts Distribution Retirees Health Care Manufacturing

High Value Crops 9/21/201547

Agricultural Production: A Record 9/21/201548

Economic Base Grades 9/21/ CompetitivenessD thanks to CA ConstructionD- Hotels & ConventionsC+ TourismC+ Tourist ShoppersC AgricultureA Clean Tech Creative Arts Distribution Health Care Retirees Manufacturing

Clean Energy Initiatives 9/21/ Demand Property Assessed Clean Energy Financing (PACE) Palm Desert Municipal Program AB 811 Net Metering Development Skill Training To Work In the Industry Electric Vehicle Production

Economic Base Grades 9/21/ CompetitivenessD thanks to CA ConstructionD- Hotels & ConventionsC+ TourismC+ Tourist ShoppersC AgricultureA Clean TechC- Creative Arts Distribution Health Care Retirees Manufacturing

Creative Arts 9/21/201552

Major Films & Important Commercials Are Already Shot in the Coachella Valley 9/21/ Value of Filming Activity Coachella Valley Coachella ValleyRiverside Co.Share 2006$11,892,591$24,225, % 2007$10,174,750$15,336, % 2008$11,705,000$13,551, % 2009$4,732,000$9,639, % 2010$11,019,500$16,479, % Assumes Coachella Valley equal to lowest share of Source: Inland Empire Film Commission

Economic Base Grades 9/21/ CompetitivenessD thanks to CA ConstructionD- Hotels & ConventionsC+ TourismC+ Tourist ShoppersC AgricultureA Clean TechC- Creative ArtsB- Distribution Health Care Retirees Manufacturing

Logistics Links 9/21/201555

Key Transportation Links 9/21/ To East To Mexico To East & Mexico

Distribution: Back to /21/201557

Economic Base Grades 9/21/ CompetitivenessD thanks to CA ConstructionD- Hotels & ConventionsC+ TourismC+ Tourist ShoppersC AgricultureA Clean TechC- Creative ArtsB- DistributionD Health Care Retirees Manufacturing

Facilities & Medical Staff 9/21/201559

Health Care Employment: Continued Growth 9/21/ OSHPD

Age Distribution: Young & Old 9/21/ vs. 10.4% 27.6%

Economic Base Grades 9/21/ CompetitivenessD thanks to CA ConstructionD- Hotels & ConventionsC+ TourismC+ Tourist ShoppersC AgricultureA Clean TechC- Creative ArtsB- DistributionD Health CareA- Retirees Manufacturing

Is the Past … the Future? 9/21/201563

No Longer Just This Active Baby Boomer Retirees 9/21/ Now This

Economic Base Grades 9/21/ CompetitivenessD thanks to CA ConstructionD- Hotels & ConventionsC+ TourismC+ Tourist ShoppersC AgricultureA Clean TechC- Creative ArtsB- DistributionD Health CareA- RetireesA Manufacturing

Manufacturing Jobs, 2011 Back To 1997 Level 9/21/201566

Setting Conditions For The Future 9/21/ CompetitivenessD thanks to CA ConstructionD- Hotels & ConventionsC+ TourismC+ Tourist ShoppersC AgricultureA Clean TechC- Creative ArtsB- DistributionD Health CareA- RetireesA ManufacturingD Over All Grade C- to C

Other Key Current Facts … 9/21/201568

9/21/ Population Growth Has Slowed

9/21/ Academic Performance

9/21/ What Jobs Grew?

9/21/ Crime Per 1,000 Residents

9/21/ , 2011 When Will “Normal” Start To Return? x 2012 If Mortgages Fixed! x Not x

9/21/