Donald Trump’s election has created a wave of uncertainty for the California and Southland economy, with his hardline stances on immigration and trade policy carrying potential risks, while a possible up-tick in defense spending could be a boon, according to a UCLA economic forecast released Tuesday.
Jerry Nickelsburg, senior economist with the UCLA Anderson Forecast, noted in his report on the state economy that Trump’s proposed increase in defense spending “will be disproportionately directed to California as sophisticated airplanes, weaponry, missiles and ships require the technology that is produced here.”
“Moreover, there are few places to build the proposed 150 new warships, and San Diego is one of them,” Nickelsburg wrote. “Regionally, we expect a positive impact in the Bay Area and in coastal Southern California.”
California could also benefit from potential federal spending on infrastructure repair and upgrades, but Trump’s stated intention to limit funding for “sanctuary cities” – a label generally placed on cities like Los Angeles and San Francisco, which are regarded as friendly to immigrants without visas – could throw the impact of such an effort into question. Nickelsburg noted, however, that Republicans may not be able to get an infrastructure-funding package approved without support from the state’s sizeable congressional delegation, meaning there would have to be some assurances of funds being spent locally.
Trump’s proclaimed intention to re-negotiate trade deals – most notably with China and Mexico – is also a wild card for the local economy.
“It may be that the stick works and the trade deals are re-negotiated with a larger volume of trade going both ways,” Nickelsburg wrote. “It is hard to say, and not the most likely outcome we see with our national forecast. Quite possibly there will be a reduced volume of trade, and depending on whether or not the stick is swung, maybe a greatly reduced volume of trade.”
Despite all of the questions, Nickelsburg said the new forecast for the coming years is “slightly higher than our previous one through the end of 2017.”
“This reflects the stimulus assumed in the national forecast, particularly through the defense appropriations,” he wrote. “The weakness relative to the U.S. after that reflects the fact that California, having already reached near full-employment will benefit less from further stimulus than rust belt states and the fact that deportations of unskilled workers will impact food harvesting and food processing.”
In a separate report, UCLA Anderson Forecast economist William Yu suggested that Trump’s vow to deport immigrants with criminal records living in the country illegally could have a notable impact in Los Angeles County, which Yu estimated houses at least 1 million undocumented immigrants.
“… We expect some undocumented immigrants will voluntarily choose to leave L.A. County for three reasons:
“– Because of enforced immigration laws, undocumented immigrants would have a harder time finding jobs;”
“– The rising cost of housing in L.A. has been driving low-wage immigrants to other low-cost counties or states already, and this will continue;”
“– California’s minimum wage incrementally rising to $15 over the next few years will reduce some employment opportunity in low-wage fields,” Yu wrote.
A Trump crackdown on immigration “will reduce the low-skilled labor supply in L.A.,” according to Yu, who said it is still unclear what impact Trump’s policies will have on “high-skilled immigrants.”
“He and most economists know high-skilled immigration has always been a contributor to our nation’s competitiveness, dynamism and innovation,” Yu wrote. “That said, we might even see Trump expand the gate of high-skilled immigration to fuel his pro-growth Trump Train.”
“… For better or for worse, Los Angeles would probably evolve and transform to be more like the Bay Area with more residents, native and immigrant, of high human capital and skills. The high cost of housing problem will persist. If L.A. wants to be a more inclusive and prosperous metro for middle-class Americans, high-density development is the key.”
Nearly all 18- to 29-year-old service workers in Los Angeles County are failing to get enough work hours, according to UCLA researchers, who urged officials Tuesday to create policy fixes.
The vast majority, 96 percent, of workers in that age range with service jobs — like food service and retail — experience challenging scheduling practices, including on-call work, fluctuating hours and little or no advance notice of work hours, according to a new report by the UCLA Labor Center and the Center for Law and Social Policy (CLASP).
The report, “Juggling Time: Young Workers and Scheduling Practices in the Los Angeles County Service Sector,” found that 80 percent of young, part-time workers want to put in more hours.
Employers often hire more part-time workers instead of giving existing workers the additional hours they want, the researchers said.
“Young workers commonly cited that when employees quit, employers do not make current employees whole,” said Reyna Orellana, a researcher at the UCLA Labor Center. “Instead employers commonly hire more workers even though existing employees may need more hours.”
As many as 40 percent of workers report having their hours cut at the last moment, according to the report.
National studies show that erratic schedules create significant challenges for low-wage workers, including work-family conflict, poor health outcomes, emotional stress, difficult child care arrangements, parenting struggles, inconsistent school attendance and income volatility, according to the researchers.
“Young workers in L.A. rely on their income to pay for education, support their families and meet basic needs,” said co-author Jeylee Quiroz, a researcher at the UCLA Labor Center. “We can’t dismiss the impact of volatile schedules on these workers’ lives simply because they are young.”
Workers in California and across the country are organizing to press for public policies that improve employer scheduling practices.
In 2015, the city of San Francisco became the first jurisdiction to pass comprehensive fair scheduling legislation, the Retail Workers’ Bill of Rights, for retail workers employed by large chains. This fall, legislators in Seattle and the Northern California city of Emeryville followed suit, passing their own laws protecting retail workers from unfair scheduling.
In November, San Jose voters approved a ballot initiative aimed at improving access to full-time employment. More than a dozen other jurisdictions are considering similar legislation, according to the researchers, who urged local officials to follow suit.
“L.A. County young workers say their voices often go unheard at their jobs and many report instances of retaliation when they ask their employers for fair treatment on the job,” said report co-author Liz Ben-Ishai, a senior policy analyst at CLASP.
“In order to have a say in how their workplaces operate and to have access to decent schedules, L.A. workers need the protection of public policies like those that are emerging around the country,” she said.
The report, which includes policy recommendations to give workers greater control over their hours, is available in full at http:bit.ly/jugglingtime.
California employment has reached record levels and — while the future is somewhat uncertain because of the presidaential election and a pair of key measures on the November ballot — employment will likely continue to grow over the next two years, according to a UCLA economic forecast released Wednesday.
UCLA Anderson Forecast senior economist Jerry Nickelsburg wrote that the number of payroll jobs in the state has reached 16.5 million, up 6.7 percent from its previous peak. Factoring in farm labor and self-employment, the number of people working is at a record 18.2 million, up 7 percent from its previous high, according to Nickelsburg.
“How long can this go on?” Nickelsburg asked. “In less than two months, there will be a presidential election and on Jan. 20, 2017, less than four months away, a new president will be inaugurated. Who that president will be is unknown, but to be sure, whomever it might be will impact the forecast for California.”
Also looming large on the state’s economic horizon are two measures on the November ballot— Proposition 55’s proposed sales tax extension and Proposition 64’s proposed legalization of recreational marijuana use.
“Also, we hear of the threat of war — a trade war, that is,” Nickelsburg wrote in his essay, an allusion to Donald Trump’s statements on U.S.-China relations. “The impact of a trade war on the logistics industry, a vital industry for California, requires further investigation as it bears directly on the risk to the California forecast.”
But Nickelsburg concluded that despite the changes ahead, “economic policy, taxes and grass (marijuana) will not be significant players of the next 2 1/2 years.”
“The current forecast is for continued steady gains in employment through 2018,” Nickelsburg wrote. “What this means is a steady decrease in the unemployment rate in California over the next two years. We expect California’s unemployment rate to be insignificantly different from the U.S. rate at 5.4 percent by the end of the forecast period.”
Nickelburg predicted total employment growth of 2 percent this year, then 1.7 percent and 1.1 percent in the next two years.
On the national front, UCLA Anderson senior economist David Shulman predicted growth of gross domestic product of 2 percent to 2.5 percent in 2017 and 2018, with employment growth slowing from 200,000 jobs per month to 150,000 per month in 2017 and 125,000 in 2018.
“Remember the closer an economy is to full employment the more the demographics of the work force takes hold,” Shulman wrote. “The unemployment rate is forecast to be in a very tight 4.8 percent to 5 percent range for most of the forecast period as the labor force participation rate rises modestly.”
Latinos age at a slower rate than other ethnic groups, despite having a higher susceptibility to some diseases, according to a UCLA study released Tuesday.
The findings, published in the current issue of Genome Biology, may one day help scientists understand how to slow the aging process for everyone.
“Latinos live longer than Caucasians, despite experiencing higher rates of diabetes and other diseases,” said Steve Horvath, lead author of the study and a professor of human genetics at UCLA’s David Geffen School of Medicine. “Scientists refer to this as the ‘Hispanic paradox.’”
Latinos face higher risks of cardiovascular diseases because of high blood pressure, obesity and diabetes, yet Latinos in the U.S. live an average of three years longer than Caucasians, with a life expectancy of 82 versus 79, according to the Centers for Disease Control and Prevention.
At any age, healthy Latino adults face a 30 percent lower risk of death than other racial groups, according to a 2013 study in the American Journal of Public Health that was cited by the UCLA researchers.
They said the slower aging rate for Latinos helps neutralize their higher health risks, especially those related to obesity and inflammation.
“Our findings strongly suggest that genetic or environmental factors linked to ethnicity may influence how quickly a person ages and how long they live,” Horvath said.
Acute alcohol use is a risk factor for suicide among men during times of severe economic hardship, according to UCLA research findings released Tuesday.
While economic downturns have been linked previously to increased suicide risk in the United States, new research by the UCLA Luskin School of Public Affairs sheds light on the role alcohol use may play in the relationship between economic conditions and suicide.
In conducting the study — which focused on the 2008 to 2009 recession period — UCLA Social Welfare professor Mark Kaplan and colleagues compared blood-alcohol levels in suicides to heavy alcohol use in the non-suicide comparison group in years before and after the downturn.
While economic recessions have been associated with both declines and increases in heavy alcohol use, the percentages of suicides who were intoxicated at the time of death increased during the recession, according to the study. What is unknown is whether this change in alcohol use prior to suicide mirrored patterns of heavy drinking in the general population, Kaplan said.
Kaplan’s findings show that, for men, alcohol involvement increased among suicides, revealing the “heightened importance” of acute alcohol use as a risk factor for suicide among men during times of severe economic hardship.
“Surprisingly, there is evidence that individuals intoxicated at the time of death did not necessarily have a history of alcohol abuse prior to suicide,” Kaplan said.
However, similar results were not found for women who died by suicide.
Kaplan suggests that women may show resilience to the interaction of alcohol and financial crises, and heavy alcohol use by women mirrored consumption in the general population.
The connection between a family’s income and childhood health has been well-established, with lower income linked to poorer health and a greater likelihood of more chronic conditions. Now a new study by UCLA researchers shows that the size of the paycheck is not all that matters when it comes to children’s health risks. So does the amount that a family has tucked away in savings.
The study is the first to look at child health in the context of what economists call “asset poverty,” or economic strain caused by a lack of ready financial resources such as savings, rather than income relative to the Federal Poverty Level. The study abstract will be presented at the Pediatric Academic Societies annual meeting on May 3.
UCLA researchers found that children in households with less than three months of savings had a substantially higher risk of obesity and chronic illnesses — and worse overall health — than children in households with more money set aside, even if the families were earning an adequate income. Having enough savings to cover basic expenses for three months is considered by many economists and financial planners to be the minimum target amount needed to avoid slipping into debt in the event of a financial shock, such as a car repair or short-term job loss.
Lead author Dr. Adam Schickedanz, a clinical instructor in pediatrics at the David Geffen School of Medicine at UCLA and a Robert Wood Johnson clinical scholar, said that savings is an aspect of socioeconomic status that is increasingly relevant. The proportion of American households living in asset poverty now exceeds 40 percent, he said, and the proportion of families with children living in asset poverty is more than 50 percent, or more than double the proportion living in income poverty.
“The findings showed that the longer families lived paycheck-to-paycheck, the worse their children’s health risk. The strong associations between wealth and child health were independent of other key factors known to influence child health, such as parental income, education, race and age,” Schickedanz said. “In fact, the study showed the differences in children’s health tied to household wealth level were most often equal to or larger than differences associated with income or education level — the factors typically used to measure economic-related health risks facing children and families.”
To conduct the study, researchers examined a nationally representative group of 2,907 children and their families using data collected between 1997 and 2007 from the Panel Study on Income Dynamics. The “Panel Study on Income Dynamics” is the longest-running economic survey of families in the world, beginning in 1969 as part of the Johnson administration’s War on Poverty, and it has tracked the economic prosperity and health of four generations of American ever since.
Compared to children in wealthier families, those living in asset poverty had a 25 percent higher risk of worse overall health, and each additional year in asset poverty increased the risk by 20 percent, according to the study. In addition, children in families living in asset poverty were 70 percent more likely to be obese and 25 percent more likely to have a chronic illness.
“Wealth is a key dimension of socioeconomic status in children that can no longer be overlooked when it comes to child health,” Schickedanz said. “Policymakers should be aware that efforts to help families save more money and reduce asset poverty and wealth inequality are likely to benefit health across generations.”
The next phase of research will evaluate the health impact of financial coaching programs that have been proven to help families in poor communities stretch their incomes further and increase their net worth. If these interventions can improve families’ health and well-being, they might offer a new way for health care systems to help low-income patients improve both their financial and physical health at the same time.
Additional authors include Dr. José Escarce and Dr. Paul Chung, both of UCLA. The authors have no conflicts to disclose relevant to the study.
The research was supported by The Robert Wood Johnson Foundation, the National Institutes of Health (National Institute of Child Health and Human Development) and the UCLA Children’s Discovery and Innovation Institute.