Valley Economic Development

My last post on water issues ( "Getting Real About Water," February 9, 2014) raised the discomfiting but inescapable prospect that the realities of water supply in our San Joaquin Valley region mean that some of the farming we now do will have to be scaled back.  This raises the question of economic viability.  Will the reduction in agriculture, the area's biggest industry, necessarily mean economic disaster?

The answer to that is an emphatic "NO!"  It might instead be just the impetus that leads to the kinds of development that could revolutionize the economy for the better.  A recent piece by a UCLA economist suggests four avenues of progress that could bring solid prosperity.  Jerry Nickelsburg is Adjunct Professor of Economics and Senior Economist at the UCLA Anderson School of Management.  His open letter to "inland Californians" was published in the Fresno Bee.  Here are his ideas for transformation.

1) Education.  There are two University of California schools (Davis and Merced) and four California State University campuses (Bakersfield, Chico, Fresno, Stanislaus( in the Central Valley.  With an underserved worldwide demand for education, and California already a "magnet" for students, each facility could be expanded to enrollments of 50,000.  An estimated 80% of the additional 200,000 students would be out-of-staters paying full tuition.  This would fund many thousands of good jobs in teaching, administration and support services, adding $20 billion to the economy.  It would also create spinoffs, filling the area with researchers, entrepreneurs and cultural assets and the related climate of innovation they would foster.

2) Nickelsburg suggests a new major airport in the region, connected by the high-speed rail system throughout California.  He sees this as a way to connect the cities of the Central Valley to "the people and markets of vibrant Pacific Rim cities such as Shanghai, Singapore and Guangzhou," replicating what the Interstate Highway System did for the U.S. economy in the 1960s and 70s.

3) Become a retirement mecca.  The region should take advantage of and market its warm climate to "snowbound Easterners" from "weather-challenged parts of the country" now that "a record number of Boomers are preparing to retire."  It would require a workforce trained in senior care, which the community colleges could supply.  The university environments would could offer music, art, drama and intellectual stimulation.  There would also be needed infrastructure improvements, as in hospitals.  The rail upgrade would be an enticement, bringing accessible day trips to the Sierra National Parks, Pacific beaches, and the urban attractions of San Francisco and Los Angeles easily within reach.  Why not lure a few million retirees this way rather than see them go to Florida?

4) Monterey shale.  Nickelsburg feels the development of this resource will be too enticing to stop.  And when it happens, he sees it as a potential economic boon.  The fields themselves won't sustain very many jobs once the initial drilling is done.  But the region should still benefit from refining and chemical industries, as well as distribution services.   

Nickelsburg draws a sharp lesson from the experience of Appalachians when the coal business declined.  They blamed government and environmentalists and did nothing, sliding into permanent depression.  The Central Valley can do the same thing when ag begins to decline, or it can make use of the other considerable assets it has to ensure future prosperity.  His thoughts deserve careful consideration.