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Kern Economic Journal
The Kern Economic Journal is a quarterly publication (February, May, August, and November). Its purpose is to track and analyze economic trends that affect the well-being of Kern County. In doing so, the journal provides primary data on consumer confidence and business outlook as well as secondary data on a wide range of economic indicators. These data help the community make more informed decisions. Sources of funding for the journal include university contributions and sponsorship fees.
The world’s largest economy of more than $16.5 trillion, the United States, grew by 2.3 percent, but at a much faster rate than the real Gross Domestic Product (GDP) growth rate from the first quarter of 2015, where real GDP grew by 0.6 percent. Real GDP increased largely because of increases in consumer spending, durable goods (mostly vehicles and parts) and non-durable goods. This was boosted by increased spending by state and local governments. However, the growth rate was moderated by decreases in federal government spending, inventory investment, and business investment, as well as an increase in imports.
In our estimation, Kern County’s personal income totaled $30.53 billion in the first quarter of 2015. We found this amount to be $211 million lower than that of the previous quarter. The decrease in personal income in the fourth quarter primarily reflected positive contributions from an increased number of employed workers in Kern County. However, these positive contributions were fully offset by negative contributions from property income and profit income. Four quarters ago, personal income was almost $30.6 billion, showing a secular stagnation in Kern County for almost a year.
The nature of oil prices being determined on an international market means that employment in the agricultural, oil, manufacturing and service related industries in Kern County may suffer severe adverse impacts from these cycles. In this article, employment estimates from the Bureau of Labor Statistics are used to assess changes in Kern County employment following a change in oil prices. Conventional wisdom states that lower oil prices will cause a reduction in employment especially in areas like Kern County where a significant proportion of the labor force works in the oil industry.1
The minimum wage debate has been rekindled. Following long-term increases in the minimum wage in Seattle and Los Angeles, New York City has followed suit, proposing to raise the minimum wage to $15 over several years. There have been both critics and proponents of features of this increase (the minimum wage increase will apply only to fast food restaurant chains, with more than 30 locations). Lawrence Katz, a prominent economist who has advocated, in the past, for a higher federal minimum wage, notes that very targeted minimum wages can lead to undesirable behavioral changes; firms may choose to operate less than 30 establishments, and workers may choose to endure longer spells of unemployment to gain one of these coveted jobs. Others, such as Dean Baker, have noted that chain owners likely enjoy “rents”, excess profits beyond what a competitive market would lead to, so that they can afford these changes.
Publishers and Managing Editors
Thank you to Dr. Abbas Grammy, Founder of KEJ, for the contributions he has made to CSUB and the Kern County Community through KEJ. For more information on Dr. Grammy, please visit the link below.
California State University, Bakersfield
9001 Stockdale Hwy
Bakersfield, Ca 93311