Coast News

Economic Forecast: Contrary to Popular Belief, the Economy is Booming

The Central Coast Economic Forecast held its annual re- flection and prediction of the San Luis Obispo County economy and beyond. Speakers Chris Thornberg and Robert Kleinhenz, Beacon Economics’ analysts, addressed almost 500 people at the Madonna Expo Center in San Luis Obispo. The crowd also enjoyed Doug Lipp, former head of training at Disney University, who discussed company culture, teamwork, and inspiring creative thinking.
“At the national and state level we’re going to have a long record expansion this year into 2019,” said Kleinhenz. “That is also good for our local economy, so we will continue to see the San Luis Obispo County and Central Coast economy continue to grow.”
Kleinhenz addressed one of the biggest challenges businesses face is finding bodies to fill positions. The current unemployment rate for San Luis Obispo County as of May 2018 sits at 2.5 percent according to the Bureau of Labor Statistics. This rate rests well below the state’s average of 4.2 percent. However, wages are also well below the California and United States averages.
“We may see a slowing of the economy in 2019 because there are not enough people to fill those posi- tions,” said Kleinhenz.
“There are more jobs open- ing then there are people looking for jobs in the U.S. right now,” said Thornberg. “It’s not jobs we need; it’s people to fill those jobs. That is what our nation needs at this particular point in time.”
Thornberg warned that the way to slow the current robust economy is to not have enough workers. He elicited a laugh from the audience by saying we should not be sending troops to the borders, but rather div- vying up the caravan of people head- ed to the U.S. borders and sending them to where jobs need filling.
“You know that giant caravan coming up from Mexico (that) we’re all terrified of, really?” said Thornber. “We should have a job training orga- nization meeting them at the border.”
Despite the demand for workers, the Central Coast has not seemed to grasp the need to pay more for them. Much like lower home prices found in what is termed a buyer’s market in the real estate industry, when there are too many homes and too few buy- ers, the job market is currently expe- riencing a candidates market, where if employers want to fill those empty slots as well as not risk experienced employees, they are going to have to raise their hourly wages.
Much like the previous year, Thornberg addressed what he calls “Miserableism” in the current po- litical climate and news media and believes that the general public has been fed doom and gloom for years. Though it sells papers and boosts political platforms, the perception is not accurate given today’s growing economy.
“Every time you turn around,” said Thornberg, “there are people compet- ing to tell you that an even worse story about how terrible things are compared to the last person.” Thornberg continued to say, “The reality is of course that things aren’t that bad, in fact, I know that this is shocking they’re pretty damn good.”
Psychologists refer to the ten- dency to believe a falsehood due to repetitiveness as the illusory of truth effect or the illusion of truth. This phenomenon coupled with people’s tendency to see what they believe and not believe what they see, called conformational bias, can easily warp the perception of a nation and those governing it. Case in point, Thornberg said that the timing of the latest stimulus package produced by Congress is characteristic of the “absurdity we live in today.” Thornberg contended that in a late expansion and with a full employment economy is not the time for a stimulus plan, those are reserved for times of recession.
Thornberg quoted a study stating that 60 percent of economists predict the economy will enter a recession in 2020, but said that this had been the case for years. Recessions always seem to be two years away, according to the pre- vious prediction the U.S. should be experiencing a recession now. Thornberg said that crashes or recessions occur because of “enormous imbalances in the sys- tem” and not merely because of the passage of time. Backing his claim, he stated that Australia had not experienced a recession since 1991.
“Believe it or not,” said Thorn- berg, “a well-managed economy can expand for a very, very long time without too much of a prob- lem.”
As a test of the validity of illu- sory of truth, fill in the blank from this famous movie quote. “____, I am your father.”
If you answered “Luke,” you are wrong.

By Mark Diaz

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