Bill Watkins shares his forecast with Senate

CLU’s Bill Watkins, executive director of the California Lutheran University Center for Economic Research and Forecasting (CERF), addressed the California state Senate with concerns about the state’s future. Watkins’ predictions about a decreasing California population could potentially affect CLU students after graduation.

“Opportunity for young people has really taken a hit in this recession,” said Watkins. “People are going back to live at home or having to search to find their first job.”

Watkins has been forecasting since January 2000.

“I was trying to get a sense of what California’s long-term economic and demographic situation would be, and not do it in a way that is political,” said Watkins. “The situation is that we are probably going to face a decline in population.”

On April 15, Watkins was invited to speak in front of the state Senate for the first time about his current research. Watkins and his team are researching the possible effects of a declining population in California, and what this could mean for residents of the state in the future.

“The question is, ‘When does California’s population start declining, or does it have to?’” said Watkins. “That creates a whole new set of problems.”

In his research, Watkins suspects that the effects of a declining population could happen in the next couple of decades.

Some consequences include a higher living expense in California, an inverted population with more elderly people than young people and a tougher job search.

Kristen Keough, a graduate student at CLU and a graduate assistant at CERF, is helping with the research on this forecast of California’s economy. She said that CERF has determined that there are several factors why the population in California is declining. The major factors include loss of business opportunities and immigration.

“All the government regulations are forcing businesses to leave and move to other states,” said Keough. “The government isn’t doing a good job to bring businesses to California.”

Keough said other states offer better incentives to businesses, tempting people to start businesses elsewhere, and that California makes it harder to start a business due to the building and planning codes and expenses.

“Immigration is down and people aren’t choosing to move to California as much as they used to,” said Keough. “Immigrants tend to either take the low-paying jobs that really aren’t going to affect CLU students, or they are going to be the ones creating jobs because they are already taking a huge risk by coming to California, so they are more likely to take the risk to start businesses.”

Watkins expressed his hope for the future.

“Years ago, we started saying that immigration is good,” said Watkins. “We would love to see an increase in immigration.”

Dan Hamilton, Watkin’s colleague at CERF, agreed that immigration is a good thing, although many people tend to oppose it.

“Policy makers tend to worry about there being too many people, but they are worrying about the wrong thing,” said Hamilton.

Hamilton is currently working on research dealing with test centers for military and civilian drones. He said that this area is competing to get one of the eight or nine test centers for these drones across the nation, which could have a positive effect on the economy.

“If they built a bunch of stuff then it might generate a bunch of jobs and some income,” said Hamilton.

The CERF team has been thinking of ways to prevent California’s population from declining. Watkins addressed these ideas to the senate.

Along with making California a more attractive place to live, they believe the government should make it easier for businesses to profitably operate, create better immigration programs and think about the effect of any legislation on opportunity.

Watkins said if this problem isn’t addressed, then it could potentially make the job hunt harder for students after graduation.

Keough said that many of her graduating friends searched for work for up to eight months.

“It’s already hard to find jobs in California, so it’s just going to make that even more difficult,” said Keough. “So you can just expect that time frame to be longer and people are going to have to move out of California.”

“The fact is, we’re going to face this problem, and it’s a good time to start thinking about it now,” said Watkins.

 

Heather Ford
Staff Writer
Published May 1, 2013