Business & Economy

Inland Empire economic forecast comes with a warning on trade

Gustavo Vega moves a box in Ingram Micro's Advanced Logistics Center in Mira Loma.
Gustavo Vega moves a box in Ingram Micro's Advanced Logistics Center in Mira Loma.
Anibal Ortiz/KPCC

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In his annual forecast for San Bernardino and Riverside counties, economist John Husing cautioned Thursday that the region will suffer if President Donald Trump follows through on his campaign promise to increase taxes on imports.

Speaking in Ontario to more than 300 business and government leaders, Husing painted a sunny picture for 2017, predicting the area would add more than 46,000 new jobs. But he was more cautious about 2018. 

"I think that 2017 is an optimistic year. I'm sure of that," he said. "Longer term, looking to 2018, that's when the Trump effect hits, and we just don't know what that is going to be."

Much of Husing's presentation covered the logistics sector, which he called a gold mine for the region. Labor statistics show the Inland Empire has added more than 50,000 logistics jobs over the past five years. Those workers transport and unload shipping containers from overseas that arrive at Southern California ports. Other workers, many employed by Amazon, organize and re-box foreign goods, preparing them for delivery across the country.

Husing warned that boosting taxes on foreign goods would make those products more expensive for consumers, cooling sales. And that, he said, would mean less shipping containers coming into the ports of Los Angeles and Long Beach.

"If you reduce imports coming into Southern California, you're going to reduce jobs in the Inland Empire because a good deal of what we do out there is handle those imports," Husing said.

While many warehouse jobs pay just above minimum wage, Husing said his own data show the median wage in the logistics sector is near $45,000 a year. He attributed that in part to a "skills ladder," where some employees work up to management positions, and others learn technical skills to operate more sophisticated technology in the warehouses.

"If you have a room full of robotic equipment, somebody has to tune it. Somebody has to repair it," he said. "You need people who can weld, who can repair, who can handle sheet metal."

Those better paying jobs would be threatened by a trade war with China, said Husing.

"For the Inland Empire, where Trump is going is largely negative." he said.

Trump has heralded higher tariffs as a way to incentivize companies to manufacture their goods in America, but Husing worries the Inland Empire wouldn't reap that benefit. California's regulations and higher energy costs could drive manufacturing companies to other states, he said, leaving the region on the losing end.