Business Press Article
March, 2005

by
John Husing, Ph.D

Inland Empire Shifting To Quality Growth.

Recently, a reporter for a national publication asked me to give her some facts about the Inland Empire that were not part of the typical litany of high growth statistics that everyone seems to know about the region. Off the top of my head, I shot off a fairly long list. It has since occurred to me that people trying to explain how rapidly the inland area has changed could use a check list. Here it is.

Median Income. According to the 2000 Census, the median income (one-half of families above and below) of Chino Hills was $78,374. Amazingly, the Census found that the median income of Beverly Hills was just $70,945 and Laguna Beach was only $75,808. Not only was the income of Chino Hills much higher, so was its population: 76,401 versus 35,701 in Beverly Hills and 24,751 in Laguna Beach. So much for the downtrodden “909” image of the Inland Empire perpetuated by television and many of the coastal newspapers. Actually, Chino Hills’s income only ranks second among the inland area’s cities after Indian Wells ($93,986). However, I’m told it doesn’t count since it is made up of the highest income winter residents from these other cities.

Taxable Sales. Costa Mesa with South Coast Plaza ($3.5 billion) and Pasadena with Old Town ($2.7 billion) are often mentioned when talking about Southern California’s retail centers (see chart). Well, my answer is Ontario with Ontario Mills ($4.0 billion) and Riverside with Tyler Mall ($4.0 billion). Unfortunately, we don’t yet have returns on Rancho Cucamonga with its high-end Victoria Gardens Regional Center. For those with money to burn, Palm Desert with El Paseo ($1.3 billion) is closing the gap on glamorous Beverly Hills ($1.7 billion). To cite one example of what is in our desert, I recently was shopping for paintings and the one I liked only cost $285,000. Its still for sale!

Job Growth. Recently, the economists and demographers studying Southern California agreed upon their long term projections for employment growth for the various parts of the region. In the period from 2000-2020, it was no surprise that they concluded that giant Los Angeles County would add the most jobs (913,388). However, that was only 14% more than the 805,268 jobs anticipated to be added in the Inland Empire. More extraordinary was the fact that the combined employment growth forecasts for Orange, San Diego, Ventura and Imperial counties was just 747,238.

Here, its should be noted that from 1990-2004, the Inland Empire has added 397,158 local jobs. Los Angeles County is actually down 136,092 for this 14 year period. Orange County has added 262,067 and San Diego County is up 291,767 jobs.

Job Quality. Over the years, job quality has been an issue in the Inland Empire. In part, this has occurred because the lack of a highly skilled labor force made it impossible for the area to compete for firms that need professionals, managers and technicians. That is changing with the rapid migration of younger well-educated workers to its explosively growing base of upscale homes. The result is beginning to show up in the region’s employment figures. From 1998 just before the high-end housing move began, until 2004, jobs in professional and corporate management firms grew 45.3% or a compound annual rate of 6.4% to 41,125. During this period, these sectors grew just 4.0% in California or 0.7% per year. In fact, the 12,825 new jobs created by these firms in the inland region was 29% of the 44,708 created in the state.

Commuting. Nearly every mention of the Inland Empire leads commentators to talk about the “fact” that “everyone” in the region is forced to commute to Los Angeles, Orange and San Diego counties to work. No doubt, this is an issue for the region’s newest arrivals. However, if you take the huge area from Rancho Cucamonga on the north to Corona on the south, you find about 800,000 people and a jobs:housing ratio of 1.40. That means there are 1.40 jobs for each occupied home, apartment or condominium. The Southern California average is 1.25, so these I-15 corridor cities are now one of the Southland’s job centers with more positions than the population requires. People are thus driving into this area to work. Some are reverse commuters from Los Angeles and Orange counties. Others are coming from the newer high growth cities deeper inside the inland region like Beaumont or Victorville.

Population. Everyone knows that the Inland Empire is growing fast but some people don’t understand just how big the area’s numbers are becoming. From mid-2000 to mid-2004, the area added 495,000 people, a 15% increase. To put that into context, the smallest state in the U.S. is Wyoming with a total population of just 506,529. One reason national and international publications have begun to focus on the Inland Empire is its population forecast of 1.8 million new residents from 2000-2020. That is more than the Census Bureau forecasts for 47 states. The three exceptions: California (12.8 million), Texas (5.6 million), Florida (4.4 million). What about other major high growth states? All will add fewer people than the two county area: Georgia (1.7 million), Washington (1.6 million), North Carolina (1.3 million), Arizona (1.3 million), New York (1.2 million). In fact, Riverside County alone will grow more than 40 states (1.1 million).