SLO County has too many highly paid, highly educated workers. Here’s why that’s an issue
San Luis Obispo County has a workforce problem.
Or more accurately, it has a shrinking population problem that’s manifesting a labor shortage — which in turn puts the local economy in a bit of a tight spot.
“What I would say is that with the current trends, particularly that population growth trend, the county can’t keep continuing to lose population and expect a fine and resilient economy over an extended period of time,” economist Taner Osman said during the annual Central Coast Economic Forecast on Friday.
According to Osman, the county’s economy — while not doing horribly — is facing some challenges.
SLO County’s population has been stagnating since roughly 2015, and growth has slowed notably.
One major demographic that is declining in San Luis Obispo County is the number of lower-paid, lower-educated workers.
On the surface, this may seem great — most would say they want people to be paid more — but in an area that relies on service-based jobs for tourism, a deficit of these workers results in labor shortages because its harder for businesses to find and afford qualified workers.
At the same time, the county’s population of highly educated and/or highly paid workers has grown, Osman said. In many cases, these workers might be over-qualifed for the jobs available.
“This is a worrying picture,” he said.
Meanwhile there’s an age issue causing trouble as well, he said.
San Luis Obispo has a significantly larger proportion of retirement-age or older residents than California (21% compared to the state’s 15%), Osman said.
At the same time, the number of residents under the age of 65 has been shrinking, he said. This also leads to trouble in the workforce, with too few people available to take jobs.
“I don’t care what your views are on the economy. ... If a region as losing population, then that is not normally seen as a healthy sign,” he said. “It’s even less healthy when you look at where that population growth is decreasing.”
This is not a problem without a solution, Osman said: SLO County has to build more housing.
“People want to be in San Luis Obispo, but in the long run, the ability to absorb workers is going to be critical,” he said.
SLO County needs more multi-family housing
Economist Chris Thornberg of Beacon Economics also echoed Osman’s advice during his presentation, saying housing is the best solution to help kickstart San Luis Obispo County’s lagging economy.
“Employers will chase the workers, (so) you need to bring workers,” he said. “How do you do that? It’s real simple in California — it’s the one place where you can say, ‘You build it and they will come.’ You build housing, your economy will expand.”
Thornberg added that it’s not a matter of building more single-family homes either — it’s multi-family dwellings like apartment buildings, condos, etc.
“You need multi-family,” he said. “That’s entry-level workers. That’s low-skilled workers. That’s young families, that’s recent college graduates. These folks need apartments. ... They’re not going to buy a home when they’re 27.”
He added: “If you want those people here to start businesses and continue to be part of this community and eventually buy one of those homes, you have to start with apartments.“
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