Much of the debate over warehouse construction in the Inland Empire – where the boom has been explosive in recent years – revolves around a single word: jobs. Are the jobs worth it? Warehouses are, after all, both a job creator and an inconvenience. They take up large amounts of land that could be used for other purposes, from housing to open space.

They are serviced by trucks, sometimes 24 hours a day. And with those trucks come traffic, air pollution and noise. They are not especially good neighbors. But that’s true of a lot of economic activity. People don’t necessarily love to live near schools or hospitals, but they accept them as necessary parts of any community. What makes warehouses worth it, at least some of the time, is the jobs that they produce. So, how great is the economic benefit in terms of jobs that warehouses bring to Riverside and San Bernardino counties, where the number of these buildings has been geometrically expanding? It is both significant and significantly worrisome.

Matt Englhard is a developer and leader of the National Association of Office Parks, known as NAIOP. He’s been building projects in Southern California, including the Inland Empire, for decades. He sees warehouses as a crucial link in the region’s economy, both in terms of their importance to international trade and for the local jobs they create. “Warehousing is one of the better entry jobs in the region,” he said in a recent interview. Yes, many of those warehouse jobs begin at or near minimum wage, but those are appealing to many young people seeking their first employment. Moreover, entry-level jobs offer paths for promotion. Warehouse workers can become forklift drivers, electricians, truck drivers or warehouse supervisors – all with significant income potential.

There’s nothing novel or wrong about starting at a low wage and moving up. With warehouses moving adjacent to some of the Inland Empire’s wealthier neighborhoods, residents have complained that minimum-wage employment will hardly allow those workers to live nearby. That means they come from far away, creating traffic and air pollution. Englhard concedes that some of those homes will be out of reach to new workers. But that’s hardly new. After all, he asked, “how many 18 to 30 year-olds are buying $700,000 homes?” The new jobs created by warehouses, said Englhard and Jonathan Sharldow, another NAIOP leader, help explain why the Inland Empire has demonstrated economic resiliency in recent years.

They pointed to a 2019 study by the Metropolitan Policy Program of the Brookings Institute that concluded, among other things, that the “Inland Empire’s logistics and manufacturing industries are crucial drivers of economic growth and prosperity.” That economic foundation, the authors concluded, helped the region withstand the recession in the early 2000s and produce “unexpectedly swift jobs recovery.” But that same report also lamented the uneven nature of that recovery, with only very wealthy residents showing economic gains. By 2016, some 41% of Inland Empire families were classified as “struggling.” The region’s poverty rate rose from 13% in 2005 to 16% in 2016.

That’s despite the explosive growth of warehouses. In 1980, there were 234 warehouses across the Inland Empire. Since then, the number has roughly doubled every 10 years. Today, there are more than 4,000, and they take up roughly 1 billion square feet of land. The logistics industry, anchored by warehouses, employs more than 200,000 people in the Inland Empire.

Those jobs have helped some young people find work and have supplied opportunities for others to promote. But they have not dented poverty rates, nor have they helped reduce inequality. “The argument we hear all the time is ‘these jobs are better than no jobs,’” said Susan Phillips, a professor of environmental analysis at Pitzer College and director of the Robert Redford Conservancy.

But that, she said, is a false choice that suggests warehouses are the region’s only option. And these jobs, most of them close to minimum wage, come at a cost: the lost opportunity to develop other parts of the economy, which might be more prosperous or resilient. “One of the problems with warehouses is that they take up a lot of land,” Phillips said. “They crowd out the room for anything else to grow.” There is yet another problem to consider.

Many types of work are subject to stress these days. Generative artificial intelligence is threatening writers and lawyers and all manner of other workers, and automation is transforming others. Warehouse employment is particularly vulnerable to both trends. Automation already has become so sophisticated that manufacturers already dream of “dark warehouses,” which are facilities powered by robots and AI and don’t need lights (robots are happy to work in the dark).

Those warehouses won’t replace current ones tomorrow – the investment costs are significant – but they may not be far away. “We need to be prepared,” said Johannes Moenius, a professor at the University of Redlands and director of the Institute for Spatial Economic Analysis. “Within the next 10 years, the warehouse sector will undergo tremendous changes.” He’s not exaggerating. One study by the institute concluded that some 75% of warehouse jobs are “susceptible to automation.”

That suggests that the warehouse boom may keep pace with automation for a time – new warehouses going up fast enough to compensate for jobs being automated – but then begin to decline. And once that decline begins, it will be fast and steep. As Moenius noted, the bigger the employment base, the larger the drop. When 300,000 jobs drop by 75%, that could mean the loss of more than 200,000 workers in a very short period.

There will be, Moenius emphasized – and apologies for his glumness – “substantial unemployment.” So which is it? Are warehouses the lifeblood of the Inland Empire, supplying it with badly needed employment to help it power through a recession and COVID? Or are they providing wages that barely keep pace with poverty and that may soon go away altogether? The answer is both – and that should be cause for concern.

DISCLAIMER: The opinions, beliefs and viewpoints expressed by the various author’s articles on this Opinion piece or elsewhere online or in the newspaper where we have articles with the header “COLUMN/EDITORIAL & OPINION” do not necessarily reflect the opinions, beliefs and viewpoints or official policies of the Publisher, Editor, Reporters or anybody else in the Staff of the Hemet and San Jacinto Chronicle Newspaper.

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LOS ANGELES (AP) — The Walt Disney Co. will cut about 7,000 jobs as part of an ambitious companywide cost-savings plan and “strategic reorganization” announced Wednesday by CEO Bob Iger.

The job cuts amount to about 3% of the entertainment giant’s global workforce and were unveiled after Disney reported quarterly results that topped Wall Street’s forecasts.

Iger returned as CEO in November following a challenging two-year tenure by his handpicked successor, Bob Chapek. The company said the job reductions are part of a targeted $5.5 billion cost savings across the company. As of Oct. 1, Disney employed 220,000 people, of which about 166,000 worked in the U.S. and 54,000 internationally.

In a statement, Iger said Disney is embarking on a “significant transformation” that management believes will lead to improved profitability at the company’s streaming business.

The company, which owns Star Wars, Marvel and Pixar, will focus more on its core brands and franchises, Iger said.

The executive also announced changes to how executives will operate Disney’s various divisions. Specifically, creative executives will now be responsible for determining what movies, TV series or other content to produce, as well as the marketing and distribution.

“Our new structure is aimed at returning greater authority to our creative leaders and making them accountable for how their content performs financially,” Iger said during a call with Wall Street analysts.

In its latest results, solid growth at Disney’s theme parks helped offset tepid performance in its video streaming and movie business.

Disney said Wednesday that it earned $1.28 billion, or 70 cents per share, in the three months through Dec. 31. That compares with net income of $1.1 billion, or 60 cents per share, a year earlier.

Excluding one-time items, Disney earned 99 cents per share. Analysts, on average, were expecting adjusted earnings of 78 cents per share, according to FactSet.

Revenue grew 8% to $23.51 billion from $21.82 billion a year earlier. Analysts were expecting revenue of $23.44 billion.

Disney said sales at its parks, experiences and products segment grew 21% to $8.74 billion, from $7.23 billion a year earlier. While revenue for the segment that includes Disney’s movie business edged up 1% to $14.78 billion from $14.59 billion a year earlier.

The company’s direct-to-consumer business, which includes its streaming services, posted a $1.1 billion operating loss amid higher programming and production costs at Disney+ and Hulu.

Disney+ ended the quarter with 161.8 million subscribers, down 1% from since Oct. 1. Hulu and ESPN+ each posted a 2% increase in paid subscribers during the quarter.

The company rolled out new price tiers for its U.S. Disney+ service in December that raised the monthly price for ad-free viewing from $7.99 to $10.99 and created a new basic Disney+ service with ads that costs $7.99 a month.

Management said Wednesday that Disney+ plus will achieve profitability by the end of its next fiscal year in September 2024.

The latest results marked the first quarterly snapshot since Iger’s return as CEO.

The move to revamp the company and slash costs comes as Disney is under pressure to turn its business around.

Activist investor Nelson Peltz, CEO of Trian Fund Management, is vying for a seat on Disney’s board of directors, arguing that the company’s recent operating performance has been disappointing and the result of self-inflected problems stemming from failed succession planning efforts, a flawed direct-to-consumer strategy and “over-the-top” compensation practices, among other concerns.

Disney has urged shareholders to vote against Peltz and last month named board member Mark Parker as its chairman. Parker, who also serves as executive chairman at Nike Inc., has been tapped to head Disney’s newly created succession planning committee, which will advise the board on CEO succession planning.

Iger also announced Wednesday that he intends to ask the board to approve the reinstatement of a “modest” dividend by the end of this year. The company suspended its dividend in the spring of 2020, in the early days of the pandemic.

Shares in Disney, which is based in Burbank, California, rose almost 6% in after-hours trading.

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On Tuesday, January 5th, Governor Gavin Newsom previewed his Equitable Recovery for California’s Businesses and Jobs plan, the business and workforce recovery elements of his 2021-22 State Budget that will help California through the COVID-19 pandemic and advance an equitable, broad-based recovery.

Watch the Governor provide a brief overview of his Equitable Recovery for California’s Businesses and Jobs plan here.

Building on actions the state has taken to support California’s businesses throughout the pandemic, including emergency aid and regulatory relief, these proposals double down on the Newsom Administration’s commitment to rebuilding the economy, with investments across sectors and benefits for businesses of all sizes.

Notably, the Budget proposes an immediate action to approve $575 million more for California’s small businesses, the backbone of the state’s economy, as they work to adapt their operations amid the COVID-19 pandemic. This immediate action proposal is on top of the initial $500 million allocated in partnership with the Legislature to the California Small Business COVID-19 Relief Grant, bringing the total for California’s small businesses to more than $1 billion.

“California’s economy is known the world over for our innovation, inclusion and resilience. That spirit will carry us through this pandemic and beyond,” said Governor Newsom. “These budget proposals reflect our commitment to an equitable, broad-based recovery that ensures California remains the best place to start and grow a business – and where all Californians have an opportunity to reach their dreams. I look forward to continuing to partner with the Legislature to advance these priorities so our economy can emerge stronger, fairer and more prosperous than before.”

The COVID-19 pandemic brought unprecedented challenges to California. However, prudent fiscal management in the past and present has allowed California to provide ongoing support to impacted Californians where they need it most.

Building on supports for California businesses before, during and through the pandemic, the Governor previewed the following budget proposals:

Small Business Grants

Prior to the pandemic, small businesses created two-thirds of new jobs and employed nearly half of all private-sector employees. California is home to 4.1 million small businesses that employ nearly half of the state’s total workforce. To help keep these businesses afloat, the Governor is proposing a total of $1.075 billion for the State’s Small Business COVID-19 Relief Grant Program.

To put money into the hands of the most impacted small businesses as quickly as possible, the Governor has proposed immediate legislative action on $575 million in additional grants. The investment will add to the initial $500 million allocation announced in November. The Program offers grants up to $25,000 to micro and small businesses that have been impacted by the pandemic. These grants will be distributed across the state, with priority given to regions and industries impacted by the COVID-19 pandemic, disadvantaged communities and underserved small business groups.

The $575 million Early Action Budget proposal includes $25 million for small cultural institutions, such as museums and art galleries, that have been constrained by the pandemic in their ability to educate the community and remain financially viable.

California Jobs Initiative

The Budget also proposes sustained investments to preserve California’s competitiveness. The California Jobs Initiative, a $777.5 million proposal, focuses on job creation and retention, regional development, small businesses and climate innovation, including increased funding for:

• California Competes Tax Credit (CalCompetes), which incentivizes businesses to locate in California to stay, grow and create quality full-time jobs in the state and creates a new CalCompetes grant program to support job creation and investments in infrastructure ($430 million)

• Extended Main Street Small Business Tax Credit to encourage hiring new employees and rehiring former employees ($100 million) – As of January 4, almost 9,000 taxpayers had reserved over $54 million of the existing credit

• Mitigating the SALT deduction limitation for S-corporation shareholders

• The California Dream Fund to seed entrepreneurship and small business creation in underserved communities ($35 million)

• Additional funds for the California Infrastructure and Economic Development Bank’s (IBank) Small Business Finance Center to provide small business loan and disaster loan guarantees ($50 million which will be leveraged to provide $250 million in loans) and for the California Rebuilding Fund ($50 million)

• Expanded sales tax exclusions through the Treasurer’s Office to reduce the cost of manufacturing equipment in order to promote innovation and meet the state’s climate goals ($100 million)

This funding also includes $12.5 million allocated, in partnership with the Legislature, in late 2020 to fully capitalize the California Rebuilding Fund to support $125 million low-interest loans to underserved businesses.

Workforce Development

The Budget proposes one-time and ongoing investments totaling $353 million to support California’s workers as they adapt to changes in the economy brought about by COVID-19. These investments lift up proven workforce development strategies like apprenticeship and High-Road Training Partnerships and encourage greater collaboration and coordination among California’s institutions of higher learning and local workforce partners. Demand-driven workforce programs can help California train the workforce of the future in key sectors including health care and technology.

Fee Waivers

The Budget proposes $70.6 million for fee waivers to individuals and businesses most impacted by the pandemic – including barbers, cosmetologists, manicurists, bars and restaurants. These waivers will assist those who have not been able to operate or are operating at reduced capacity during the pandemic.

Deferred Maintenance

In recognition of the job-creating potential of infrastructure projects on state-owned properties, the Budget includes a $300 million one-time General Fund for the most critical statewide deferred maintenance, including greening of state infrastructure. This proposal will help create jobs in California while achieving our state’s climate goals. Projects include the installation of electric vehicle charging stations at state-owned facilities.

Housing

Through the Infill Infrastructure Grant (IIG) Program, this Budget proposes $500 million to create jobs and long-term housing development to unlock more than 7,500 new permanently affordable homes for Californians. IIG grants to local governments and developers bring the cost down for new housing by defraying costs for things like sewers, roads and site preparation, all while putting thousands of people to work in good jobs building this housing-related infrastructure. $250 million of these funds are proposed for early action.

Zero-Emission Vehicles and Zero-Emission Vehicle Infrastructure

Building on California’s historic commitment to requiring sales of all new passenger vehicles to be zero-emission by 2035, this Budget proposes an additional $1.5 billion investment to accelerate our state’s progress toward these goals while creating jobs. The proposal will support jobs and economic growth and provide air quality benefits and support for low-income Californians to purchase cleaner vehicles. Funds will support purchases of clean trucks, buses and off-road freight equipment and Clean Cars 4 All programs. It will also support job-creating construction of electric charging and hydrogen fueling stations necessary to accelerate zero-emission vehicle adoption. The Budget proposal will leverage additional private sector capital to build the necessary infrastructure and create jobs to support California’s recovery.

These 2021-22 Budget proposals build on the Newsom Administration’s work to support California’s businesses and workers. Among many actions, the Administration waived the $800 minimum franchise tax – often a costly barrier for start-up businesses – for the first year of operation. The Administration in November also extended up to billions in immediate, temporary tax relief to businesses impacted by COVID-19 by extending deadlines for paying sales taxes for smaller businesses and expanding interest-free payment options for larger businesses particularly affected by significant restrictions on operations due to COVID-19.

Additionally, the Administration built and funded the Great Plates Delivered program, a first-in-the-nation program that partners with local businesses to deliver nutritious meals to older Californians and other adults at high risk from COVID-19, which has supported more than 9,000 jobs per week on average.

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