The Inland Empire serves as a vital hub in California’s logistics network, facilitating the flow of goods from the state’s ports to the rest of the country. California’s trade sector is a national economic powerhouse, supporting more than 1 in 51 jobs nationwide.
Proposed legislation seeking to impose stringent restrictions on warehouse development could jeopardize the economic vitality of the Inland Empire and beyond. Assembly Bill 98, which introduces mandatory buffer zones between warehouses and sensitive sites like homes, schools, and hospitals, would severely impact the national supply chain, driving up consumer prices and eliminating well-paying, middle-class jobs essential to this region.
One of the most significant economic engines in the Inland Empire is its logistics and warehousing sector. As the gateway through which 40% of the nation’s goods pass, Southern California’s ports and the Inland Empire’s warehouses are indispensable. This proposal, created in secret at the very end of the legislative session with no input from the public, limited input from stakeholders and pushed through without a public process, will reduce the state’s capacity to handle goods. In a time when inflation and the cost of living are already high, the last thing California’s families need is legislation that makes everyday goods more expensive.
Moreover, the logistics industry in the Inland Empire provides thousands of well-paying jobs that offer a path to the middle class. These jobs often do not require a college degree, making them accessible to a wide range of individuals who might otherwise struggle to find employment that supports a family. On average, they pay $87,000 per year, providing mostly Latino workers with the ability to provide for their families. Limiting warehouse development would not only hinder job creation and could also result in job losses as companies choose to relocate their operations to other states or countries with more favorable regulatory environments. Texas, South Carolina, Mexico and Canada would be more than happy to take these jobs.
We’ve already seen this happen. California’s regulatory environment continues to impact businesses’ decisions on whether to site or expand operations in the state, especially the southern California region. Since 2006, the Southern California ports complex and associated supply chain network have lost 23$ of their market share to competing states. This reduction in market share has led to fewer well-paying jobs and reduce local and state tax revenue. This includes more than 45,000 jobs annually in Southern California, $3.86 billion in reduced labor income, $43 billion in cumulative losses to the regional economy, $590 million in lost local and state tax revenue to governments in Southern California, and cumulative revenue losses to state and local governments of $4.5 billion.
The economic consequences of this proposal would not be confined to Southern California. California’s entire supply chain would be affected, from the ports in Southern California to the stores and homes throughout the state that rely on timely deliveries of goods. Delays and disruptions in the supply chain would lead to shortages and higher prices for consumers, creating a ripple effect that would be felt across the state’s economy.
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Introducing such sweeping changes in the final days of the legislative session, without adequate consultation with local governments, business leaders, or community stakeholders, is not good governance. Instead of jamming this proposal through in the final days of session, the Legislature should wait and work through the legislative process properly.
This bill is a threat to California and the Inland Empire’s economic future. The logistics sector is a cornerstone of our regional economy, providing well-paying jobs and ensuring the smooth flow of goods across the country. Imposing new regulations without fully considering the economic impact on this critical sector will hurt not only the Inland Empire, but all of California.
We urge lawmakers to reconsider this proposal and work with stakeholders to find a solution that protects both the environment and the economy.
We need policies that support job growth and economic vitality, not ones that drive up costs for consumers, kill jobs and limit opportunities for hardworking Californians.
Paul Granillo is CEO of the Inland Empire Economic Partnership.
