I have received several comments from environmentalists about our recently released Fish or Foreclosure study that wonder why I say the drought has cost 6,000 farm jobs, when total farm jobs have increased. I understand this, because I was the one who initially brought the fact that farm jobs in the Valley were increasing to public attention, and this fact has been repeated by many in the environmental community since. It's true, and there is nothing wrong with pointing out the total change, especially when someone is blaming 40,000 lost jobs on the Delta Smelt as Congressman Nunes did in yesterday's Wall Street Journal.
The 6,000 lost jobs are a marginal effect of drought AND include all the multiplier effects (about 3,000 of these lost jobs are agriculture jobs). Total agricultural jobs can increase by 3,000 and the drought can eliminate 3,000. It means that we feel agricultural jobs would be up by 6,000 if there were no drought, but increased by a smaller amount because of water shortages. We believe farm jobs would be increasing substantially without a drought because the recession has boosted labor supply.
Another comment on marginal effects. I believe the marginal employment effects of water supply will increase if water deliveries are cut even more than they are this year. The farm labor shortage is gone now, the ability to use even more groundwater is limited, and the water issue will progressively impact higher and higher value crops. So, our study estimated the $600-700 million in lost revenue only cut 6,000 jobs (a little less than 10 jobs per $1 million in revenue). My rough estimate is that any further losses could impact jobs at 15-20 per $1 million in lost revenue.