Water contractors taking advantage

They’re using the recession to advance their cause

Dr. Michael is the director of the University of the Pacific’s Business Forecasting Center. He published a similar op-ed piece in the Sacramento Bee in May.

What is causing unemployment in the San Joaquin Valley? According to water contractors and their political supporters, a “regulatory drought” has eliminated water-dependent farm jobs, and they point to high unemployment rates in farming communities as proof. Their solution is to suspend the Endangered Species Act and build a multibillion-dollar peripheral canal around the Delta to increase the “reliability” of water deliveries from Northern California.

However, the facts from state payroll data don’t support the water contractors’ view. Across the San Joaquin Valley, farms have added 5,000 jobs (3 percent) in the past 12 months, whereas private, nonfarm payrolls have declined by more than 31,000 (-3.6 percent).

So how can anyone claim farm layoffs driven by water shortages are driving valley unemployment? The region has the nation’s highest foreclosure rates, and the collapse of the homebuilding- and consumer-spending-dependent services have cost many former farm workers their higher-paying jobs.

The recession has led to a state budget crisis, and a long-run structural deficit looms. Recent state tax increases are hurting families, businesses and private-sector job creation, while California has the lowest bond rating of any state.

Despite this fiscal crisis, water contractors and the agricultural industry in the southern San Joaquin Valley think the state should borrow billions for their cause. They are using the recession to sell their plans for a peripheral canal as economic development.

Although many smaller farms lose money, the large agribusinesses that are most dependent on Delta water exports are among the state’s most profitable industries, while also being the lowest-paying. Much of the profits flow outside the valley, and the local farm-worker communities have the highest rates of unemployment and poverty in the state even when water exports are at record levels. The water contractors’ economic development strategy is more of the same, and they offer no reason to expect better results.

Public financing of the water plan will crowd out investments in education, energy, transportation and other critical areas that will support the high-paying jobs of the future.

Taxpayers are the forgotten party in the various Delta stakeholder planning processes. With no one protecting taxpayer interests, it’s no surprise that Delta Vision recommended the most costly options to the governor.

While spending millions on engineering studies and public relations, the state is not sponsoring any serious research to comprehensively evaluate economic effects of the water plan. California’s overburdened taxpayers deserve better, as do its collapsing fisheries.