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 -600,000 Government Jobs +10,380,000 Private Sector (119.2%)

California Job Gains/Losses ,066,400 Defense Cutbacks Dot.Com Great Recession ,315, Up +249,158 Recovery

Highest Unemployment Rates Major U.S. Metro Areas

Where Is the IE In Its Job History? ,208 of 143,108 lost or 81.2% 26,900 Jobs To Go 34,475

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: Finally Some Hope

Share of Underwater Homes Plunging

Notices of Default At Low Levels

Home Price Trends 71.3% 40.9% Above Existing Home -34.7% 2014,

Long Term Competitive Price Advantage Still Exists

Home Sales Volume Stagnant

Mortgage Credit Easing A little Credit standards on mortgage loans that your bank categorizes as prime residential mortgages have:

Permits: Just A Little Hope

Why Low Volume Less Foreclosures Buyers Want or Need High Prices Continued Wall Street Acquisition of Large Share of Foreclosures Credit Hurt By Foreclosures Higher FICO Scores FHA Lowering Conforming Mortgage Ceiling From $500,000 to $350,000 Fear

Why Home Construction’s Return Is Important 3,150 Jobs Lost : -68,433 Job Gain : 18,375 Job Deficit: -50,158 Median Pay $51,953

Inland Empire’s In-migration From Coastal Counties Has Not Recovered -27,324 Not Bringing Skills, Wealth, Income & Spending

Assessed Valuation Growing Again Down: -4.0% Inflation: +7.8%

Construction & Mining Job Growth Median Pay $51,923

Strong Industrial Growth

Industrial Construction

Logistics Flow of Goods

Port Container Volumes

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 % So Far 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

California Just 1.0% of U.S. Manufacturing Job Growth

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 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 EPA-AQMD Standards Eliminating Ability of these Sectors to Grow Poverty is Exacerbated as a Result!

Health Care

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%)

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, 2014

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

Skilled Workers Skilled Workers Migrate Inland For Better Homes

Higher End Homes $560,458 $418,634 $479,341 6 UPLAND EASTVALE $475,498 $473,351 $435,873 CORONA $443,870 TEMECULA $350,479$397,927 $347,075 $329,924 Loma Linda

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 6.6% Above Pre-Recession Peak 15.2% Inflation

Job Growth: Population Serving Jobs

Where Is the IE In Its Job History? ,208 of 143,108 lost or 81.2% 26,900 Jobs To Go 34,475

Job Growth By Market Area, August YTD

Forecast: Review 2014 Better Than 2013 Construction Returning Logistics Strong Manufacturing Weak Health Care Set To Take-Off Office Sectors Modest Pop. Related Group Gaining Govt & Education Crawling Unemployment Drops to 8.5% Growth Looking Normal 21,802 Jobs Below Pre-Recession