Peter Gleick: ‘Drought Impacts on Unemployment Are Grossly Overstated’

Thus concludes a new comprehensive assessment of the impacts of the drought on Central Valley unemployment. We’ve heard a lot of rhetoric on this issue in the past few months, mostly from a small group of self-interested farmers who would like to see the deliveries of water to their fields increased at the expense of remaining storage in reservoirs and water recently returned to natural ecosystems.

Water Number: 0.3%
In fact, this new independent assessment, from professor Jeffrey Michael of the University of the Pacific Eberhardt School of Business Forecasting Center (which took no outside funding to do the report), concludes that of the 5.6 percent increase in unemployment in the San Joaquin Valley counties over the past year, only 0.3 percent of it comes from water shortages. More than 2.5 percent of the rise in unemployment comes from the drastic drop in construction employment and the rest from other economic woes caused by the financial policies of the previous administration.

Peter Gleick
Dr. Peter Gleick is president of the Pacific Institute, an internationally recognized water expert and a MacArthur Fellow.

Most media stories have reported that 30,000 to 90,000 jobs were lost due to water shortages. The University of the Pacific report finds that to be a gross overestimate and concludes that job losses from water shortages were around 6,000 – certainly bad, but far, far lower than losses due to other factors. The report uses two different methods to check these results, using data from the agricultural industry. Both methods reach similar conclusions.

In fact, the University of the Pacific report notes that official employment data from the State of California shows that “For each of the first six months of 2009, San Joaquin Valley farm jobs have increased over the previous year.” Farm employment in the seven San Joaquin Valley counties grew by 3,200 jobs from June 2008 to June 2009. Non-farm employment is where the problem lies: it dropped by 30,200 jobs in the same region in the same period.

But the authors go even farther and analyze why the higher estimates, from UC Davis, are too high. According to the Michael’s report, the group at UC Davis acknowledges the flaws in their estimates – actually done by the California State Water Resources Control Board staff – and is moving to update and redo their model with new assumptions and data. I look forward to the continuing refinement and debate over these estimates, but I hope that policymakers and the media take account of the new findings so that effective actions can be taken to stimulate employment in these counties.

Finally, as the University of the Pacific report clearly states: “The rise in unemployment is creating great economic hardship in the San Joaquin Valley, particularly among lower income households in the Central Valley. A disproportionate share of the impact has been felt by Latino households who make up large shares of employees in the construction and farm sectors.” But exaggerating the role that water plays in that unemployment, and using that exaggeration as an excuse to eliminate environmental protections and increase the withdrawal of remaining water from reservoirs, rivers, and the Delta, will do little to improve farm jobs and much to hurt rational water policy in the region.

Dr. Gleick’s blog posts are provided in cooperation with the SFGate. Previous posts can be found here.