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County of San Mateo The San Mateo County Economy: Present and Prospects Marin Economic Consulting Jon Haveman, Ph.D. November 28, 2016
County of San Mateo
The San Mateo County Economy:
Present and Prospects
Marin Economic ConsultingJon Haveman, Ph.D.
November 28, 2016
New Report!www.MarinEconomicConsulting.com/RegionalReports/San_Mateo_County
Outline
• Current Economy
– Gross Regional Product
– Employment
– Venture Capital
– Income
– Housing and Transportation
• The Path Forward
– Trumpian Uncertainty
Regional GRP: 2015
Employment in San Mateo
County
Relative Employment Growth:
NonFarm Payroll Growth
Venture Capital
San Mateo is an Important
Destination for VC Investments
Per Capita Income is High and
Growing Quickly
Per Capita Income
Ave. Annual Growth Rate
National Income and Wealth
Inequality
Changes in
Income Shares
• US prosperity is anything but shared
• Massive transfers are being made from those at the bottom to those at the top
Source: CBO
Result
• The United States now has the highest percentage of low-wage workers – make less than two-thirds of the median wage – of any developed nation.
• Fully 25% of all American workers make no more than $17,576 a year.
Inequality Locally:
San Mateo County
Income Shares in San Mateo
County
Poverty in San Mateo County
Child Poverty
But….Federal Poverty Statistics
Are Flawed
• Fails to account for:
– non-cash transfers
– regional differences in the cost of living
– the declining importance of food in household spending
• Enter:
– California Poverty Measure
Economic Hardship is Understated by Federal Poverty Statistics (2011)
Bay: Fed Pov 11.7%CPM 19.0%
And the Middle Class?Households with income between 2/3 of and 2 x Median HH Income
$35,000 - $106,000
Big Distributional Changes!
Middle Class
The Middle Class in the Bay Area:
Pushmi Pullyu
• Pushmi:
– Decline of available jobs
• Pullyu:
– Cheaper homes elsewhere
Manufacturing Jobs in the Bay Area
Occupations Gaining Share Occupations Losing Share
Architecture and Engineering 1.5 Computer and Mathematical -0.2
Life, Physical, and Social Science 0.9 Food Preparation and Serving Related -0.2
Business and Financial Operations 0.5 Farming, Fishing, and Forestry -0.2
Sales and Related 0.4 Building and Grounds Cleaning -0.3
Community and Social Service 0.1 Office and Administrative Support -0.6
Construction and Extraction 0.1 Production -0.6
Transportation and Material Moving 0.1 Management -0.8
Installation, Maintenance, and Repair -0.8
Employment is unchanged from 2007 to 2015 (300k)
Occupational shares – ARE NOT!
Home Prices are Driving out the
Middle Class
94.0%
77.8%85.1%
35.1%
63.5%
0.0%
20.0%
40.0%
60.0%
80.0%
100.0%
120.0%
SF SM SC US CA
Increase in Median Sales Price of Existing Homes March 2012-2016
Median Rental Price, All Homes
High Rents are Driving Out
Low Income Residents:
San Mateo County
Low income is < $25k/year
In household income
San Mateo County CommutesMegaCommuters: Those with 90+ minute commutes
Interim Summary
• The San Mateo County economy is strong and a part of the strongest economy in the world
• Incomes are high and rising
• Inequality is of growing concern
– Poverty rates are too high
– The middle class is being crowded out
• Housing shortages are leading to long commutes
Forecast
The Trumpian Bargain
• The big question is what is he going to do:– International Trade
– Minimum Wage
– Tax Cuts
– Budget Cuts for Entitlements
– Obamacare
• His promises on these issues all have the ability to impact the economy - negatively
• Uncertainty in the short term could lead to shallow recession
Summary• There is great uncertainty coming
• The Bay Area and San Mateo County are probably well poised to weather it
• The only rational response is to continue addressing the region’s most pressing issues:
– Housing
– Transportation Infrastructure
– Poverty
Questions?
Regional Analysis Business & Market Analysis Ports & Infrastructure Analysis Economic Impact Analysis Public Policy Analysis CEDS Support
Marin Economic Consulting
