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‘Punch to the Gut’: All Trends Flat or Falling in Local Economy

On the bright side, the weather’s still beautiful in Ventura County, and residents live twenty minutes from the beach. But in terms of the economy, trends are nothing but down.

“We have a new data point, and this one is kind of a punch to the gut,” said Matthew Fienup at the 2024 Center for Economic Research and Forecasting (CERF) Forecast event on February 28, preparing to admit that his most recent forecast wrongly predicted that the County’s economy would grow in 2023. Not only did Ventura County’s economy not grow, it contracted, even while Los Angeles County’s economy grew.

“Ventura County’s economy is contracting again. This is a pretty big forecast miss on our part.”

Matthew Fienup, 2024 CERF Forecast event

In fact, when the government sector is factored out, Ventura County’s economy is cratering.

“The Bureau of Economic Analysis (BEA) released its County data program [in December 2023],” said Fienup, who directs CERF at California Lutheran University. “In 2022, the GDP revealed that Ventura County’s economy is contracting again. I want to remind you that we were actually predicting positive growth last year, and so this is a pretty big forecast miss on our part. Data not only came in under our estimate, it actually came in under zero.”

Lackluster performance for Ventura County’s economy is nothing new. Fienup calls the last 17 years “a period of prolonged economic weakness for the County.” Total economic activity here, as measured by gross domestic product (GDP), peaked in 2007, before most high school juniors were born.

GDP data indicate that while the U.S. and California grew by 30 and 44 percent, respectively from 2007 to 2022, Ventura County’s economy shrank by 12.4 percent, wrote Dan Hamilton in a recent article for CERF.

“From the pandemic, we saw that the County was already lagging behind, our recovery was slower than … neighboring counties, and what we posited a year ago was that we believe this represented a return to that underlying weakness that existed prior to the pandemic,” Fienup said.

Around 650 people per month leave Ventura County to live elsewhere.

On top of that, people are “fleeing” Ventura County, says Fienup.

“We’re also seeing an acceleration of net migration of people from Ventura County to somewhere else in the United States,” he said. “Thousands more people are leaving Ventura County for somewhere else than coming. This is them voting with their feet … on relative economic opportunity.”

California Department of Finance data shows that 7,800 people moved out of Ventura County between July 1, 2022, and July 1, 2023. That’s 21 people every day — 650 per month — leaving the County to live permanently elsewhere. The overall net decline — which counts those who moved into the County during that same time period — shows the County lost 4,500 net residents in just one year, according to CERF.

Worse, young people are leaving at a higher rate than anyone else.

“Ventura County is gaining people 60 and up relative to the U.S. [and] losing the younger population under 39 at a faster rate than the U.S.,” Fienup said.

Young adults are moving away to “start families, build careers and drive economic growth and economic prosperity in other regions,” he said, of which “Texas and Arizona are the most popular.”

They leave behind an economy with fewer high-paying jobs and one that “very overwhelmingly” is adding only low-skill, low-paying jobs taken by non-Ventura County residents.

Total economic activity in the County peaked in 2007, before most
high school juniors were born.

Overall, the County’s population has fallen from a high of 850,227 in 2016 to 825,937 — and still declining — today.

During the COVID-19 period, Ventura County was one of the most aggressive counties in the nation in shutting down businesses, churches, schools and private activity — even being highlighted on Tucker Carlson’s Fox News program when a public health official said the County intended to isolate and quarantine people away from their families and homes. The drastic actions taken to push the mRNA COVID-19 shots on all County residents were unprecedented in the County’s history — and may have contributed to a surge in mortality rates as well as out-migration to other states.

The City continues to hang its hopes on the biotech industry, even as Amgen moves jobs out of state. The best Fienup could recommend was to “aggressively court the large employers” and “to just have this robust, dynamic environment that welcomes new opportunities.”

Vibrance is missing, largely because the government sector has muscled out private entrepreneurship, labor and resources in the economy, he said.

“Education and health services [both heavily or entirely government-funded] have added a huge number of jobs,” Fienup said. “In fact, if it weren’t for education and healthcare, the entire economy would have lost jobs from 2007 to 2022.”

On that score, the second speaker, economist, author and investment manager David Bahnsen, made the case that the local economy, like the national one, is dangerously weighed down by massive pension obligations and the cost of liability litigation.

“It ought not be so easy to sue somebody for laying somebody off,” Bahnsen said. “The only reason that doesn’t get more applause is some of you haven’t been through it.”

He also says government jobs remove healthy “labor dynamism,” the movement of people between jobs, which “is pivotal to a society achieving economic growth.”

Distorted monetary policy also breeds underlying problems.

“Years and years of zero percent interest rates do basically two things: one, boost housing prices to a level where no one can afford to buy one. If you don’t believe me, ask all of your friends how many of them can afford to buy their own house,” he said. “Number two, years of zero interest rates distorts decision-making in the economy. It allows capital to be misallocated to less productive places … and prevents it from going into new technologies, to new innovations.”

Only returning to a business-driven economy will revive Ventura County, Bahnsen asserted.

“We must celebrate entrepreneurialism and risk-taking and ultimately allow these things to lead to the private sector growth that is available to us — if we will have it,” Bahnsen said.

A major task is restoring the basic value of work which used to drive the American economy. Today, too many people are dropping out of the labor force, often relying on government benefits.

“The labor participation force must come higher,” Bahnsen said. “We must celebrate the basic American ideal of hard work, or we will not restore a culture of economic growth. … The need of the hour is a culture of work and a policy framework of growth. The results will [be] … the human flourishing that comes from greater jobs, higher real wages, projects that meet human needs and wants, and the opportunities embedded in an aspirational society.”

1 COMMENT

  1. Returning to value business and work will never happen because California always votes for Democrats who are more interested on DEI, Wokeness, and Climate Change. Unless we can produce the materials here in California and NOT depend on China for the batteries and EV stuff, we will continue to decline. Like this article says, we have to change our attitude towards bug business. That will never happen in this county and state.

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