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In California, the four-year drought has inflicted harm on trees, lakes and other parts of the landscape. But the water crisis also is affecting workplaces--in a wide variety of ways.
Although the state’s overall employment picture is strong, the drought has led to many job losses in agriculture. It’s likely also reducing employment in food manufacturing, according to experts.
California businesses also are being affected in other ways. To save water, some companies have adopted new employee procedures, introduced new technologies and launched employee conservation campaigns. As employers adapt to the state’s water problems, workers in turn need to adapt to all of the changes.
Economic Impact of the Drought
The state’s economy is holding up well under the strain. Overall, the drought has had little impact on employment growth in California, said Troy Walters, a senior economist with IHS.
Based on his analysis of state data, the sectors most affected by the drought are agriculture and food processing. But those two sectors combined are just a small part of the economy, he said. Together, the agriculture/forestry/fishing sector and the food-manufacturing sector make up about 3.5 percent of total California payrolls, Walters said.
Meanwhile, California’s employment gains have been outpacing other states, according to a recent report from the state’s Employment Development Department.
Jeffrey Michael, an economist at the University of the Pacific, also said that the drought’s impact on employment has been minimal. He added, though, that it has caused pain for the state’s ski industry. Earlier this year, unfavorable weather conditions prompted many resorts to close down early.
Despite the tough times for the ski industry, Walters said, the drought doesn’t appear to have hurt employment levels in tourism. Ski resorts are a small segment of the tourism sector, he said.
Michael noted that the drought has been a boon for certain workers, like the well-drillers who have been busy helping farmers access groundwater.
When examining the economy as a whole, the technology sector has been a major contributor to California’s strong job growth, according to a September report by the California Chamber of Commerce Economic Advisory Council.
But as the group observed, that may provide little solace to struggling farmers and agricultural workers.
“Few workers displaced in agriculture are likely to land at the next tech startup,” the report states. “In short, to those experiencing losses, the losses are very significant.”
In the big picture, the state economy has been resilient, Walters said. At the same time, the drought has taken a painful toll on some farm communities, he emphasized.
Facing severe cutbacks in surface-water deliveries, California farmers have increasingly used groundwater for their irrigation needs. Pumping groundwater has helped reduce the need for land fallowing and job cuts, according to a report from the University of California at Davis. But it hasn’t completely eliminated the need.
As a result of drought conditions, about 540,000 acres of land will be fallowed in 2015, and about 10,000 seasonal farm jobs will be cut this year, the report estimates.
Despite job losses that have hit agriculture, overall farm employment has been increasing in California, according to the report. As Walters noted, agricultural payrolls would be even higher had the drought not occurred.
Many employers have shifted to crops that are more labor-intensive, leading to an increased need for farm labor, said Adam Belzberg, a Seattle employment lawyer at Stoel Rives who has many clients in California. Many growers are using the H-2A guest worker program because of a labor shortage, Belzberg said.
While agricultural employment has been rising in the state, there are regional differences, according to a report from the Pacific Institute. In coastal and desert regions and in the Sacramento Valley, farm employment has increased. But it has declined in the San Joaquin Valley.
At Bowles Farming Co. in Los Banos, both the head of the business and laborers have felt the toll. The drought and strict environmental rules have been a “double whammy,” according to President Cannon Michael. Over the past two years, his farm has received much less surface water than normal. Now, about 35 percent of his 10,000-acre farm is fallow.
Although Bowles Farming has installed five wells over the past year, and the company uses water-conserving drip-irrigation technology on much of its land, there’s been a huge impact on contractors. The business has reduced contract labor by 35 percent, because of reduced alfalfa-harvesting activities and fallowed land.
All of this has ripple effects on other workers in the community. Because the company doesn’t need to use tractors on the fallowed land, there is less work for those who supply parts for the tractors and less work for tractor mechanics. In another example, the fallowing also results in less trucking activity to food-processing plants and other locations.
To increase activity on California farms, one major challenge is solving the varied problems affecting the Sacramento-San Joaquin Delta, said Michael of Bowles Farming. He urges farmers and environmentalists to work together in this effort.
In Le Grand, Marc Marchini of J. Marchini Farms says that his business hasn’t had to lay off employees because of the drought. Even though surface-water deliveries have dried up, the company has been able to use groundwater for irrigation, said Marchini, vice president of operations.
Similarly, groundwater also has helped Weimer Farms in Atwater cope with the drought, and no layoffs have been needed in response to the drought, said co-owner Bob Weimer.
But Marchini and Weimer worry about how agriculture will fare in the long term. Although both use water-efficient irrigation technology on their farms, many factors are outside their control, and they wonder about the effects of new state legislation that regulates groundwater.
The exact impact of the Sustainable Groundwater Management Act on farm employment is hard to predict, said Wes Miliband, a Sacramento water attorney at Stoel Rives. Before the state enacted the law last year, the approach to groundwater use was a bit of a “free for all,” according to Sacramento water-rights attorney Andrea Clark, of Downey Brand. The legislation calls for creation of local agencies to ensure that groundwater basins are sustainable, Clark said.
According to Miliband, the groundwater legislation could impact employment for certain farmers. Specifically, it could affect growers using groundwater from basins that haven’t been adjudicated--but that are deemed to be either high-priority or medium-priority. In those basins, groundwater users will be regulated by local agencies within about five years. Employment levels might decline if these growers have less water and, in turn, fewer acres to harvest, Miliband said. Even under those conditions, though, employment levels could remain stable or grow if more labor-intensive crops are used, he added.
Meanwhile, Proposition 1--a $7.5 billion bond measure approved last year--potentially could boost farm employment over the long run. A key provision is $2.7 billion in funding for storage projects, according to Clark. The bond measure also provides $625 million for water recycling. Proposition 1 should help agricultural employment indirectly, because water resources will be better managed and used, Miliband said.
When it comes to reducing water in response to the drought, some of the largest impacts are on manufacturing plants, said Frost & Sullivan Senior Industry Analyst Seth Cutler in an e-mail.
Many California manufacturers are seeking to recycle and reuse their process water, and Cutler cites Nestle as an example. The company plans to turn its Modesto milk plant into a “zero-water” factory, implementing new equipment and procedures to reach its goal. The company will model this effort on its zero-water factory in Mexico.
The drought isn’t affecting all manufacturers in the same way, though.
For instance, Cutler noted that semiconductor manufacturing is very water-intensive. However, the major California-based semiconductor companies manufacture most of their chips outside the state, in areas with sufficient water supplies, according to semiconductor-industry analyst Will Strauss. Although layoffs are occurring in the industry, they’re not being driven by California’s water problems, said Strauss, of market-research firm Forward Concepts.
As for food manufacturing, experts say the drought probably is affecting jobs.
Rob Neenan, head of the California League of Food Processors, said that his organization doesn’t have official data on this topic. But he said the drought likely is spurring some food manufacturers to reduce employment, depending on what they process and how much water they use.
According to government data, the California food-manufacturing sector has been experiencing major year-over-year employment declines. It’s likely that the declines are at least partially the result of drought, Walters said.
In some parts of the state, local officials are very worried about the potential for severe economic harm to food manufacturers.
According to the National Drought Mitigation Center, some small cities with large food-manufacturing plants can’t meet the state’s water-conservation targets, unless they “slash production or jobs.” To avoid the need for such cutbacks, state regulators have exempted some towns from the requirements by granting “alternative compliance orders.” The towns that have received these exemptions include Livingston and Lemoore.
In Kings County--where Lemoore is located--officials have expressed concern about the impact of the drought on food manufacturing. In a report released earlier this year, they said that the state’s water problems could threaten long-term employment growth in this sector.
“If the natural and legislated drought continues, the end result points to a future of ag processing stagnation,” the report warns.
Despite the water troubles, California is drawing huge numbers of tourists, and industry payrolls are growing. As noted in the Chamber of Commerce advisory council report, year-over-year employment in leisure and hospitality increased 3.8 percent during the first half of 2015.
Still, the drought has affected operations in the tourism sector, which has been striving to conserve water in many ways.
As part of a regulation announced in March, state regulators placed specific restrictions on restaurants and hotels. Under one provision, restaurants can serve water to customers only upon request. Also, hotels must notify guests that they have the option of not having their towels and sheets washed daily.
“We have changed the way we operate,” said Sixto Ramirez, engineering director at the Hyatt Regency Indian Wells.
The business trains staff about its water-conservation efforts on an ongoing basis, Ramirez said in an e-mail. Among others things, the hotel doesn’t allow employees to spray water on concrete decks.
In the San Francisco area, different hotels are taking different measures to save water, said Jessica Lum, a spokeswoman for the Hotel Council of San Francisco.
Hotels in the region have long focused on water conservation, according to Lum. In June, the council hosted a drought seminar to discuss best practices, she added. In one approach used in some hotels, kitchen workers use compressed-air systems to pre-clean dishes.
In the ski industry, newer technology is also helping businesses cope with the drought.
Many ski resorts have state-of-the-art snowmaking systems, which consume very little water, said Michael Reitzell, president of the California Ski Industry Association. For resorts without snowmaking systems, the hope is that El Nino will bring a lot of snow this winter, he said in an e-mail.
The group’s member resorts also offer a variety of activities--not just skiing.
The issue of employment is complicated, because the situation varies by resort and because of the seasonal nature of skiing, Reitzell said. Many ski resorts are recruiting for seasonal jobs, like ski instructors and lift operators, according to Reitzell. He added that most year-round, full-time jobs are held by people who have had them for years.
As part of their water-conservation efforts, some employers have launched campaigns urging their workers to save water.
One of these employers is the California Department of Forestry and Fire Protection. Last year, the department announced a program urging employees to pursue conservation measures. At fire stations, these steps include reducing shower times and turning off water when cooking and cleaning dishes.
In 2014, Pacific Gas and Electric began a conservation effort, encouraging workers to save water in the workplace and in their homes. The utility calls it a grassroots movement, with strong support from company leaders. On its website, the company said that almost 2,300 employees have pledged to reduce their water use.
Also last year, AT&T launched a campaign urging its 34,000 California employees to cut water use by 30 percent. The effort is aimed at “non-essential” water usage, said AT&T California President Ken McNeely in a blog post. The components include no longer washing the company’s California fleet of vehicles, and using less water for landscape watering.
“In California, we are helping to raise awareness among employees about the importance of conservation,” while also implementing water-saving technology and working on other water-reduction projects, McNeely told SHRM Online in an e-mail.
Toni Vranjes is a freelance business writer in San Pedro, Calif.
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