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Economists give snapshot of industry, health care and housing in Lodi

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“There’s a wide band of uncertainty around any kind of forecast. If we act on a forecast as if it were the truth all the time, you run the risk of saying silly things like, ‘Housing prices only go up.’”

— Dr. Bill Herrin, professor of economics, University of the Pacific

“(The Affordable Care Act) did have an impact. Did it save money? That’s a whole different talk.”

— Dr. Michelle Amaral, professor of economics, University of the Pacific

Posted: Wednesday, November 28, 2012 12:00 am | Updated: 9:48 am, Wed Nov 28, 2012.

Two economics professors used a collection of eclectic data to paint a picture of housing and health issues faced by Lodi residents.

Dr. Bill Herrin and Dr. Michelle Amaral are both professors of economics at the University of the Pacific in Stockton. Herrin's work focuses on econometrics and household migration, while Amaral focuses on microeconomics of health.

Herrin shared comparisons of the workforce in Lodi, Stockton and the nation at large, along with Lodi's numbers in 2006. The percentages are based on three-year averages from 2006-08 and 2009-11:

  • The construction industry was able to maintain itself in Lodi. Construction workers made up 7.3 percent of the workforce in 2006-08, and held that number through 2009-11.
  • The financial and real estate sector made good strides. That sector held 4.9 percent of the workforce from 2006 to 2008, and improved to 6.6 percent between 2009 and 2011.
  • The education, health and social services sector holds a smaller portion of the workforce in Lodi than in Stockton and the nation. It has held about 20.1 percent of the workforce since 2006.
  • The health care industry alone makes up 9 percent of the total labor force in Lodi. Lodi Memorial Hospital is the second-largest employer. General Mills is the first.

Herrin also discussed some data on household income and poverty indicators:

  • The mean household income has decreased in Lodi from $48,346 in 2006-08 to $47,434 in 2009-11.
  • The number of homes on supplemental security income, which provides help to disabled people, has increased from 5.4 percent in 2006-08 to 6.1 percent in 2009-11.
  • More households in Lodi are now receiving food stamps, up from 7.2 percent in 2006-08 to 10.7 percent in 2009-11.
  • More households are now below the poverty line than previously: 10.5 percent in 2006-08 and 14.4 percent in 2009-11.

Herrin shared information about how many Lodians have health insurance: 24.7 percent of employed people do not have insurance. For unemployed people, that statistic is 46.8 percent.

The cost of renting homes in Lodi is very steep, said Herrin. More than 65 percent of renters spend more than 30 percent of their income on housing.

Herrin was puzzled by the lack of homes for sale in Lodi, since foreclosure rates in this area are among the highest in the country. In both Lodi zip codes, 1 in 131 homes were in foreclosure in October. Many vacant houses are being held off the market for some reason.

Herrin cautioned the audience to use business forecasting with caution.

"There's a wide band of uncertainty around any kind of forecast. If we act on a forecast as if it were the truth all the time, you run the risk of saying silly things like, 'Housing prices only go up,'" he said.

Most of Amaral's talk focused on details of the Affordable Care Act, which won't be fully in force until 2018. But many changes are coming in 2014.

In 2005 to 2009, the number of people under 65 without health insurance was growing. But there was a decrease in 2010-11. Amaral said that was due to parents adding more dependents under age 26 to their insurance plans.

"It did have an impact. Did it save money? That's a whole different talk," she said.

Most people get their health coverage from an employer, Amaral said, since it can be difficult to find an affordable plan as an individual.

The health care mandate pools many people together to make plans affordable, from the healthy to the not-so-healthy. But requiring everyone to buy insurance will raise the cost of care, because more people will be visiting doctors and nurses more often. Amaral also predicted a shortage of health care providers.

Amaral said that one risk of requiring health insurance is called a moral hazard. If people know health insurance will pay for their care, they are more likely to behave recklessly and get hurt.

For businesses, it will be interesting to see how the mandate plays out, said Amaral. Penalties for not providing insurance to employees is about $2,000 per year, per person. That is much less than the cost of health insurance for employees. It is possible that businesses will just choose to pay the penalty.

Contact reporter Sara Jane Pohlman at sarap@lodinews.com.

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7 comments:

  • Bill Herrin posted at 3:41 am on Thu, Nov 29, 2012.

    Bill Herrin Posts: 3

    I was simply relating information I heard informally from some realtors who have clients who would like to buy in Lodi. I've also read similar things in The Record over the past year or so. I too found it surprising that this would be the case, which is why I posed it as a bit of a mystery during the talk. Given that solid data on the issue is virtually impossible to come by, who knows what the reality is. Your experience is what one would expect.

     
  • Darrell Baumbach posted at 9:04 pm on Wed, Nov 28, 2012.

    Darrell Baumbach Posts: 9403

    Elise Middlecamp posted…So if you're just interested in money, I can see where it would all come down to which party is legislating. However, as an actual family in a home, I appreciate much of what California has to offer. However, as an actual family in a home, I appreciate much of what California has to offer.

    Great post and I can appreciate that you like what California has to offer. I love California and especially Lodi as it is a comfortable place to raise a family as I have done. However, the reality is that politicians makes rules, regulations and mandates that affect the quality of life. Since it is an anti-business state, it is getting harder to get a good job that makes the house payment. Without jobs, how can one enjoy the nature greatness that attracts people to come.

     
  • Elise Middlecamp posted at 7:26 pm on Wed, Nov 28, 2012.

    Elise Middlecamp Posts: 20

    I disagree with Darrell. We are not so fortunate to be able to pay for a home with cash, and in fact we're considered first time home buyers. If any metric of the nation would be useful in this discussion, I feel Lodi ought to focus some attention on first time home buyers; by and large people who are not at the end of their careers and will be part of the forthcoming economy.

    That said, it seems more like there is a conspiracy among banks to keep homes off the market to maintain artificially high home values. We can all agree that monetary economics in the USA are entirely out of balance with respect to the whole earning spectrum. Are the banks in Lodi just not interested in preventing further social immobilization? Are they maintaining these homes, upgrades included, so as to not stiff families with rundown properties?

    I have a different perspective. I'm looking for a place to raise a family, not make a profit or shuffle investments (as much as I'd love to be in such a position). So if you're just interested in money, I can see where it would all come down to which party is legislating. However, as an actual family in a home, I appreciate much of what California has to offer. That others deride this state as some mockery of capitalism and social responsibility is obtuse and insulting to those less fortunate, and frankly speaks to the hyper-partisanship that has brought this country to this sad state of gridlock over the past 25 years. Not a feat to be proud of as a nation, and while it was chronologically impossible for us to have a hand in making the mess we're certainly dealing with the various consequences.

     
  • Darrell Baumbach posted at 11:18 am on Wed, Nov 28, 2012.

    Darrell Baumbach Posts: 9403

    Can you please expand on this last post... I recently was searching for homes in Lodi for my sister who just sold her home in Hawaii. We had so many homes to choose from. After careful review, she decided to buy in Missouri instead. Wise decision.

    I also last summer went to open houses to consider buying a second home for my wife and I. There was an endless supply of homes for sale. After finding many deals we could take, I decided against it in fear of owning any more real estate in California. Now that Democrats have a super majority in California, the risk is even higher as more taxes and regulations are inevitable. I too am thankful I did not buy.

    I find your conclusion odd based on my personal experience. I would appreciate why you conclude there are no homes for sale?

     
  • Bill Herrin posted at 10:00 am on Wed, Nov 28, 2012.

    Bill Herrin Posts: 3

    Regarding forecasting, I should be more clear. Forecasts are useful as a guide to the future. That's why they're so valuable to so many. But even the best forecasts, like those done at Pacific's Forecasting Center, involve at least some uncertainty. So people would be wise to continually monitor how forecasts change as time passes and to be nimble planners. I think that's the best way to use the information forecasts provide.

     
  • Bill Herrin posted at 9:54 am on Wed, Nov 28, 2012.

    Bill Herrin Posts: 3

    But the lack of homes for sale isn't the same thing as there not being any home buyers. There apparently are quite a few buyers, many of whom can buy with cash. there simply aren't homes to offer. In economic terms, the problem is not on the demand side. It's a supply issue.

     
  • Darrell Baumbach posted at 7:59 am on Wed, Nov 28, 2012.

    Darrell Baumbach Posts: 9403

    Herrin was puzzled by the lack of homes for sale in Lodi, since foreclosure rates in this area are among the highest in the country

    That is easy.. If Lodi was transported magically to Texas, real estate sales would increase. Since Lodi is located in a state liberalism dominates, ( highest taxes and anti business environment) obviously, who wants to buy now?

     

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