Fewer job losses linked to Delta, drought
Mike Taugher
Contra Costa Times
09/29/2010
A jobs plan that is part of Meg Whitman's gubernatorial campaign suggests that drought and Delta pumping restrictions might have cost California 95,000 jobs.
Senate candidate Carly Fiorina puts the number at 40,000.
Both are relying on early and outdated economic forecasts of what might have happened in 2009.
Now, the economist who developed those numbers and his toughest academic critic have joined together in a report that tries to determine what actually transpired.
Their conclusions: Those estimates of lost jobs are far too high.
Between 5,500 and 7,500 jobs were lost due to water shortages in the San Joaquin Valley last year, and most of the blame goes to the weather, not to environmental protection. One of the economists put the job loss attributable to environmental protections at 1,400 jobs and the other put the figure closer to 3,000 jobs.
By comparison, one of the report's authors said the housing downturn cost the region 76,000 construction-related jobs.
"Sure, the 2.5 percent decline in crop production had an impact, but the 90 percent decline in home production and the more than 50 percent decline in nonresidential construction had a much bigger impact," said Jeffrey Michael, director of the Business Forecasting Center at the University of Pacific.
The Delta's problems captured national attention last year as drought and new restrictions on water pumping combined to cut supplies to farms and cities that had been taking record amounts of water out of a collapsing Delta.
Despite the fact that drought was causing most of the shortages, talk show hosts and politicians took to blaming new court-ordered restrictions meant to prevent Delta smelt from going extinct. Protests were held in the hardest hit area -- the San Joaquin Valley's west side -- where bitter complaints were heard about fish being favored over jobs.
In early 2009, UC Davis economist Richard Howitt tried to predict the economic impact the drought and new restrictions on Delta pumping would have on San Joaquin Valley farms.
His first attempt resulted in a forecast that 95,000 jobs might be lost, but he revised that figure downward a number of times in response to much lower numbers put forward by Michael.
"Yes, it's a problem when candidates don't use the most recent and accurate figures," Howitt said in an e-mail. "I have tried to correct this, but this combined report should help put some of the outdated values to rest."
Whitman and Fiorina's opponents -- state Attorney General Jerry Brown and incumbent U.S. Sen. Barbara Boxer, respectively -- also have made references to problems in the Delta but they do not appear to have used the high job loss estimates as part of their campaigns. The economists said the impact was concentrated in western Fresno, Kern and Kings counties, regions served largely by the nation's largest federal water district, the Westlands Water District, and the State Water Project's second largest customer behind Southern California, the Kern County Water Agency.
Howitt noted that economic impact was indeed severe in those regions but that voluntary sales among big water users significantly blunted the effects of shortages.
"Despite this, a 10 percent reduction in jobs is a severe impact for farmworkers on the west side," he said.
The economists used different methods for determining the actual impact of the drought and the new Delta pumping restrictions, but came up with numbers that were close.
Michael estimated water shortages caused farm revenues to decline by $340 million while Howitt put the figure at $370 million. In both cases, the figures represent a lot of money, but less than a 3 percent decline in San Joaquin Valley farm revenues.
