John Husing, Ph.D. Economics & Politics, Inc. Chief Economist, IEEP Inland Empire Economic Growth... Building An Expansion

After Losing 8.71 Million Jobs … U.S. Jobs All The Way Back & More

Petroleum Prices

Value of the Dollar

Consumer Confidence

California Job Gains/Losses ,066,400 Defense Cutbacks Dot.Com Great Recession ,301, Up +235,308 Recovery +1.6%

California & U.S. Unemployment Rates

Highest Unemployment Rates Major U.S. Metro Areas

Where Is the IE In Its Job History? ,976 of 143,108 lost or 92.2% 11,132 Jobs To Go

Primary Tier Secondary Tier Economic Development … Increase The Economic Base! How Regional Economies Work

Poverty Rates, 2013 Children Under 18 All People

High School or Less

BA or Higher

Construction & Real Estate: Real Hope

Share of Underwater Homes Plunging

Notices of Default At Low Levels (859 in December 2014)

Home Price Trends 71.0% 38.4% Above Existing Home -31.0% 2014,

Long Term Competitive Price Advantage Still Exists

Affordability to Median Income Household Inland Empire L.A./SD Orange.

Home Sales Volume Stagnant

All RespondentsLarge BanksOther Banks BanksPercentBanksPercentBanksPercent Tightened considerably Tightened somewhat Remained basically unchanged Eased somewhat Eased considerably Total Mortgage Credit Easing Very Little Credit standards on mortgage loans that your bank categorizes as prime residential mortgages have (October 2015):

Permits: Just A Little Hope

Why Low Volume Less Foreclosures Buyers Want or Need High Prices Credit Hurt By Foreclosures Higher FICO Scores FHA Lowering Conforming Mortgage Ceiling From $500,000 to $350,000 Fear Coming Help FHA Lowering PMI rates on conforming loans 1.35% to 0.85% Interest Rates Remaining Low FICO Scores Easing A Little

Why Home Construction’s Return Is Important 1,825 Jobs Lost : -68,433 Job Gain : 13,286 Job Deficit: -55,147

Inland Empire’s In-migration From Coastal Counties Has Not Recovered -25,278 Not Bringing Skills, Wealth, Income & Spending

SB County Assessed Valuation Growth

Assessed Valuation Growing Again Up from peak: 4.2% Inflation: 10.2%

Construction & Mining Job Growth Median Pay $51,923

Strong Industrial Growth

Industrial Construction

Logistics Flow of Goods

Port Container Volumes

Port Issues & Trade Diversion Potential Labor Difficulties Over Technology (PMA v. ILWU) Truck Chassises Teamsters & Independent Owner Operators Panama Canal Rising Value of the Dollar

Fulfillment Centers

E-Commerce Growth Rates Year Over Year by Quarter

Logistics Job Growth & Why It Is Important 18.8% of All Inland Jobs in % in 2014 Median Pay $43,911

CARB: Diesel Pollution Is Disappearing Exhibit 6.-PM 2.5 Days over National Standard vs. Total Square Feet of Net Industrial Absorption Since Highest PM2.5 level Monitoring Sites Mira Loma-Van Buren Riverside- Magnolia Riverside- Rubidoux Fontana-Arrow Highway Ontario-1408 Francis Street San Bernardino- 4th Street * *** 2005 ** *27.2** ***** 2008 * * * Change From Highest Change -80.1%-96.6%-94.8%-95.9%-100.0%-96.3% Net Absorptiont Since Highest 101,204,114198,737,217244,793,404198,737,217244,793,404198,737,217

Manufacturing: Could Be A Major Growth Source

U.S. Manufacturing Job Growth 7-Times Faster Than California

Manufacturing Non-Job Growth! Median Pay $48,923

Causes of Public Health Difficulties 1.Socio-Economics 40% 2.Population’s Health Behaviors30% 3.Access to Medical Care20% 4.Environmental 10% Source: Different Perspectives For Assigning Weights To Determinants of Health, University of Wisconsin, Public Health Institute, %

What is Needed To Attack Poverty? Short Course Adult Training in Specific Skills 1.Business Determined Sectors 2.Business Established Certifications & Speed of Training 3.Business Willingness to Give Hiring Preference Sectors With Few Education Barriers to Entry Median Incomes Approaching Middle Class Earnings Skill Ladders Up Which Workers Can Move To Median Incomes Sectors That Are Adding Jobs

Median Incomes Near To Middle Class Needs, Minimum Entry Level Requirements Middle Class Earnings, Minimum Skills To Enter

Issue Fundamentally: Blue Collar Sector Growth Needed To Allow Marginally Educated To Access the Middle Class Manufacturing Logistics Construction Mining, Oil & Gas Training Needed To Allow Advancement In These Fields EPA-AQMD Standards Eliminating Ability of these Sectors to Grow Poverty is Exacerbated as a Result!

Health Care

People Per Health Care Worker 28.9%

Inland Empire Underserved

Health Care Demand Set To Explode People Without Health Insurance (2013) 836,689 (19.7, 19.0%) People Will Age, Already 55 & Over 962,260 (23.3%, 20.5%) Population Growth Will Resume ( ) 734,580 (47.5%) 375,530 (22.0%) Inland Health Care Workers Handle More People Than CA (28%) Difficulty: Infrastructure of Training Para-Professionals

ACS Enrollment Statistics: Inland Empire Source: Covered California Inland Empire represents 8.8% of CA enrollment CaliforniaInland Empire Non-Subsidized 173,609 12,428 Subsidy Eligible1,222,320110,543 Total1,395,929122,971 Oct. 1, 2013 through Mar.31, ,000 Website 300,000 MediCal 423,000 Total

Health Care Job Growth … Modest! Median Pay $55,475

Skilled Workers Skilled Workers Migrate Inland For Better Homes

Higher End Homes $585,199 $427,095 $484,914 UPLAND EASTVALE $468,269 $465,778 $459,000 CORONA $429,667 TEMECULA $344,095$393,603 $357,027 $345,243 Loma Linda $568,700 Claremont

Migration of Educated Workers

Office Absorption Follows Higher-End Workers High-End Jobs Follow Workers into the Area

Office Vacancy Rates Improving But Still Very High 17.0% 24.0%

Office Based Job Growth

High Income Private Sector Office Jobs

Primary Tier Secondary Tier How Regional Economies Work

2014 Retail Sales Head For 6.1% Above Pre-Recession Peak 15.2% Inflation

Job Growth: Population Serving Jobs

Where Is the IE In Its Job History? ,976 of 143,108 lost or 92.2% 11,132 Jobs To Go

Job Growth By Market Area, June

Forecast: Review 2015 Better Than 2014 Construction Returning Logistics Strong Manufacturing Weak Health Care Set To Take-Off Office Sectors Modest Pop. Related Group Gaining Education Growing Government Crawling Unemployment Drops to 7.9% Growth Looking Normal 11,132 Jobs Below Pre-Recession