Wednesday, July 28, 2010

Humboldt's Changing Economy

Posted By on Wed, Jul 28, 2010 at 3:22 PM

The latest issue of the Humboldt Economic Index offers some fascinating nuggets of information. For example, the composite index (a sketch of our overall economic health) reached a 16-month high in June. On the other hand, the report states that, "All three leading indicators [unemployment insurance claims, building permits and help wanted ads] point to a tougher future."

That future could be even tougher than those indicators, uh, indicate. Consider the following graph:

click to enlarge changing_economy.png

The local economy used to be driven by manufacturing whereas now, judging by this graph, retail is the tide raising our ships. Or is it? To drastically oversimplify matters, manufacturing produces money while retail spends it -- or, as a wise man once told me, "You can't make an economy just by washing each other's cars." 

Now, as anyone who has worked in retail locally can tell you, much of the money that comes in is cash -- Benjamins, quite often -- bespeckled with pocket lint and tacky with residue from the crop that earned it. There's no line on the above graph for marijuana cultivation, but you can bet it more or less parallels the retail line. And, as Hank Sims explains in this week's cover story (on newsstands now, online tomorrow), that industry's boom days are almost certainly behind us.

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Ryan Burns

Ryan Burns

Bio:
Ryan Burns worked for the Journal from 2008 to 2013, covering a diverse mix of North Coast subjects, from education, politics and marijuana to human suspension, sex parties and amateur fight contests. He won awards for investigative reporting, feature stories and news coverage.

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