Economic Structure
Sierra Economy Faces Noteworthy Shifts
Why is it important?
The economic structure of a region changes over time in response to global markets, new technologies, population growth, and public policy. When business and community leaders have an accurate picture of an economy’s structure, they better meet future challenges and choose investments that most benefit their community, whether in education or infrastructure, planning or building design.
Although many people believe that local wages have decreased because manufacturing has declined and services have grown, not all service jobs are to blame. Business services include such high-wage jobs as law, finance, real estate, and technical positions. Social services are more ambiguous because they include high-paying medical jobs and low-paying education jobs. Government often provides the highest-paying jobs in rural communities. Consumer service jobs such as arts and entertainment, household maintenance, lodging, retail, and recreation are most often low wage.
How are we doing?
The Sierra Nevada economy has structural weaknesses that must be addressed if we are to avoid compromising our region’s long-term prosperity. Compared to California, the Sierra Nevada has a higher percent of jobs in construction and retail. The construction industry is notoriously sensitive and linked to state and national economic cycles. Retail creates low-wage jobs that do not support families, especially when housing prices are high. As the Sierra Nevada’s economy grows, we must expand those economic sectors that pay living wages and offer steady, year-round jobs.
On the positive side, business services were the fastest growing sector in the Sierra Nevada in the past 20 years and are now the most significant component of the economy. Most of this growth was in business management and engineering. Manufacturing also grew slightly, in contrast to its steep decline at the state level.
The greatest losses were in government jobs, primarily state and local. The Sierra Nevada lost more in the distribution sector than did the state, largely within transportation and public utilities. Sierra agriculture experienced a decline, but the mining industry was harder hit. Both of these sectors are strongly influenced by international markets and government policies.
Each Sierra region, though, experienced distinct and noteworthy changes. In the North, declines in manufacturing were offset by increases in business services and government, which provide high-wage jobs. In North Central, distribution and government jobs became less important, while manufacturing jobs became more so. In South Central, jobs were lost in agriculture, mining and manufacturing, but gained in business services. In the East, declines in agriculture and mining were offset by increases in both consumer and business services
