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Erosion of Economic Base
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Private Sector and Government Jobs, 1996 to 2004
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THE ICEBERG – The County's Core Mistake
Decline of Jobs in the Timber Industry
Over the past 30 years, the timber, fishing, and ranching industries, once our primary export engines, have seriously declined. Other industries have not grown enough to provide the share of jobs, family incomes and tax base formerly provided to the community by the timber industry.
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Mendocino County lost 652 private sector jobs from 2000 through 2004. We lost over 1600 "goods producing" jobs and gained nearly 1500 service jobs. In general goods producing jobs pay much better than the type of service jobs we gained. EDD indicates we lost nearly 500 farm jobs as well.
During those years 1237 government jobs were added, 1182 of which were local governments. (This analysis moved 300 new tribal casino jobs from the government category to private sector.) In the past year or two private sector jobs are starting to come back somewhat while local governments are starting to reduce the size of their staffs. However, we've lost too much ground.
We had nearly 5 private sector workers for each job in governments in 1998. But by 2003 that number was down to 3.2 and has only slightly moved up to 3.4. There are now more than 1/3 fewer private sector jobs for each government job. How do 3.4 people completely support one other person?
How Much County Salary and Benefits
For Each Private Sector Job?
Ten years ago there were 25 private sector job for every County government job. The combination of losses of private sector jobs with the rapid expansion of County staff led to a 30% decline down to 17.4 private jobs for every County job.
Before the County rapidly increased its Total Payroll each private sector job's "share" of County Salaries and Benefits was less than $1700 each. Now this number has doubled to about $3400 for each employee in the private sector.
Our best estimate at this time is that on average County staff makes somewhere in the range of 70% to 110% more in salary and benefits than the average private sector employee. According to this year's Proposed Budget, the average County salary and benefits will be over $70,000 a year.
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Jobs in Mendocino County a Decade Ago
Jobs in Mendocino County Today
County (and other public sector) jobs are like the part of an iceberg above water. Jobs in the private sector are like the part below. Just as the part below holds up the part above water, ultimately the County's workforce is paid from the tax base generated in large part by workers, businesses and consumers in the private sector.
The Mendocino County Board of Supervisors (BOS) from 1997 through 2002 made two major decisions that, in the context of our local economy's long term decline, inexorably led to our County becoming one of the, if not the most indebted per capita in California.
- Rapid Increase in County Staff
- Rapid Increase in Average Salary and Benefits
Other BOD decisions during those years that significantly deepened the hole were to significantly cut economic development and promotion funding and to "sweeten" the County's retirement benefits.
The County could have gone in two directions. They should have helped reverse the melting of the iceberg below water by helping to defend and create good high paying jobs, mostly because that would have been the right thing to do for the people of this County, but also so that the County would have a larger tax base to support it's budget. But that's not what the County did.
Instead, beginning around 1997, the County Administration and Board of Supervisors set out to nearly double the size of the top of the iceberg over the next 6 years, and effectively disregarded the fact that the economic base needed to pay for it was melting away.
The Fundamental Mistake of the Board of Supervisors and County Administration was that while making the decisions that greatly increased the County's Total Staff Expenses, they did not consider the ability of the county's economy to pay for it! The County acted as though it could increase the size of the top of the iceberg while the bottom was melting. What is now unavoidable is the debt is going to melt the top of the iceberg to bring it back into balance with the part below.
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Click here to go to Page 4 of the Summary – Our Proposals and Data.
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