Future shock

A new study of Sonoma County's economy found that per capita income has declined by $6,000 annually since 2000, when adjusted for inflation.

In other words, a family of three might have seen its spending power drop by $18,000 since the go-go days of the high-tech economy. The bad news is that the decline will continue, with average income falling 22 percent from 2000 to 2010, according to a forecast conducted for The Press Democrat by the Center for Regional Economic Analysis.

For upper-income families, the decrease may be felt in small ways: Shorter vacations, fewer dinners out. Middle- and low-incomes families will be hit much harder, with many people being forced to sacrifice basic necessities.

Partly to blame is the decline in the real estate market and the subsequent loss of lucrative construction jobs. As Staff Writer Nathan Halverson notes in Sunday's A1 story, the county's housing sector employed one in six workers last year, many of whom earned $60,000 to $70,000. Many of these folks have been laid off as housing prices drop and sales lag. In 2005, around 3,000 building permits were issued; in 2006, the number dropped to less than 2,000.

The housing market is notoriously fickle, going through periodic booms and busts. While small consolation for workers without paychecks, the industry will -- at some point -- experience an upturn.

The real concern should be another key factor in declining income levels: The transition from high-paying manufacturing jobs to lower-paying service jobs.

When high-tech and telecom companies disappeared, they weren't replaced by similar businesses. Instead, much of the recent job growth has been in tourism and retail. Employment in these sectors helps pay the bills -- but for many non-managerial workers there is nothing left at the end of the month.

If this trend continues, the local economy is in danger of splitting into two groups: Well-heeled retirees living the Wine Country lifestyle and low-income workers who have little chance of climbing the economic ladder into the middle class.

To prevent this bifurcation, local political and business leaders must search out industries that can provide higher wage jobs. In the 1990s, entrepreneurs such as Don Green played this role, providing capital and encouragement to start-up companies creating innovative telecom products.

Unless another Green steps forward, it will be up to local governments and institutions to identify potential growth industries and then create an environment that welcomes and encourages their development. For a model, people could look to the South Bay, where Silicon Valley is reinventing itself as a hub for Web-related companies.

Sonoma County is one of the few places in the Bay Area where working class families have a shot at the American dream. It will take vision and planning to keep it that way.