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Trump’s policies could hit California economy hard

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California is still golden, but President Donald Trump’s policies on immigration and foreign visitors could hit the state’s economy hard in two places – agriculture and tourism, reported CBS Los Angeles (US).

California’s rate of employment growth has continued to outpace the nation, but it slowed during the final quarter of 2016 as employment reached a record level, according to the spring 2017 UCLA Anderson Forecast.

The state total employment growth is predicted to be just above 2 percent this year, but is forecast to slow to just over 1 percent next year and under 1 percent in 2019, according to Senior Economist Jerry Nickelsburg. He also predicted for a more than 3 percent bump in real personal income this year and expects it to stay mostly steady over the next two years.

But a series of political issues could impact the state’s economy – deportations of immigrants living in the country illegally, exchange rates, international travel visas and the debate of Trump’s executive orders on visitation from select countries.

According to Nickelsburg, an estimated 50 percent of the agricultural workforce is undocumented, with an even higher percentage for crops “that are labor-intensive in harvesting.”
“There are reports that the chilling effect of INS raids in the past weeks is impacting the number of laborers showing up for work,” Nickelsburg wrote.

“… The threat to deport millions of undocumented immigrants, a threat that the current attorney general has endorsed, is a risk to the forecast,” he wrote. “Were this to occur, there could well be a significant reduction in the production of food, in food processing, particularly the slaughter and preparation of meat products, in garment manufacturing and in residential construction. This is a risk that will be watched closely and were it to become more of a reality in the next three months, will lead to a downward revision of the forecast.”

Nickelsburg also said tourism will likely take a “double-whammy hit” — due to the higher value of the dollar making travel to the United States more expensive, combined with a “less friendly environment for foreign nationals coming to the U.S.”

“After the January 27 travel ban was announced by the president, bookings searches were reportedly down by 6 to 17 percent on aggregator websites,” Nickelsburg wrote. “This does not mean they won’t come back, however, the promise of new travel restrictions including a higher threshold for obtaining visas suggest a decline is in the offing.”
He added that Trump’s Twitter post about California being “out of control” won’t help local tourism.

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Reporter: Denes Osvalt
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Category: Politics
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