Sunday, October 18, 2015

California: OC's Worrisome High Cost of Living, Workforce Trends

In California, Orange County is having a robust economic recovery despite the state’s business-unfriendly tax and regulatory policies. But with the good economic news comes cost-of-living and workforce quality issues. 

The county's high housing prices among other causes are restricting the number of skilled workers who keep the economy humming. And a "growing and persistent skills gap” is a risk if more educated middle-class workers leave California.

The Orange County Register, in Workforce trends threaten O.C. economy, editorialized:
Orange County homes now cost three times the national average. According to the [Orange County Business Council] study, that fact is “forcing residents to seek employment outside of Orange County, including skilled young adults that permanently move out of state to areas with lower housing prices.”
That trend is confirmed by Joseph Vranich, president of Spectrum Location Solutions in Irvine. The OCBC study “could be, word for word, what is happening in San Francisco and Silicon Valley” as well, he said. “I’ve heard housing prices cited as an obstacle to hiring. People coming to work in Orange County also expect higher salaries to pay for the higher housing costs.”
The study, entitled, 2015/2016 Workforce Indicators Report, finds:

Behind only San Francisco and Santa Clara counties, OC is the third most expensive place to live in CA and remains one of the most expensive places in the nation to buy a home and that Less than 22% of residents can afford to buy a home. These factors have a heavy impact on Millennials.

The county’s high cost of living – 7th nationally, according to the 2014 Cost of Living Index (Council for Community and Economic Research) – encourages young people, including highly-skilled young professionals, to move to less expensive areas and threatens the county’s future economic vitality.

A lack of sufficient workforce housing options can cripple regional economic development by forcing residents to seek employment outside of Orange County, including skilled young adults that permanently move out of state to areas with lower housing prices.

Three industry clusters are likely to face the most significant pressure from a skills gap perspective – Advanced Manufacturing, Health Care and Information Technology.

Advanced Manufacturing includes Medical Devices, Computer and Electronic Products, Aerospace Products, Printing, Fabricated Metal Products and Pharmaceuticals.

Joe Vranich is known as The Business Relocation coach while his firm is formally known as Spectrum Location Solutions. Joe helps companies find great locations in which to grow. He also is a keynote speaker on the benefits of businesses relocating out of high-tax, high-cost, over-regulated states to friendlier businesses environments. More information is available at Biography and Speaking Availability. On Twitter, Joe is known as @LocationConsultant.

© Excerpts may be used, but only if attribution is given to "Joseph Vranich of Spectrum Location Solutions, Irvine, Calif."