By DAVID PITTMAN
Happy days are here again for the U.S. economy and the business outlook for Tucson is even rosier.
So says Sung Won Sohn, executive vice president and chief economic officer of Wells Fargo, who spoke yesterday at the annual Wells Fargo Economic Update at The Westin La Paloma Resort & Spa, 3800 E. Sunrise Drive.
“Frank Sinatra would have said 2003 was a very good year,” he said. “I’m here to tell you 2004 will be even better.”
Sohn said Tucson escaped the worst of the economic downturn that hit the rest of the nation in 2001 and 2002. He noted that unemployment is lower here than for the rest of the country and predicted that trend will continue.
“You really haven’t had a recession in Tucson,” he said.
Sohn said Tucson could become a future “hotbed for high technology” because it is an attractive place for businesses, particularly those from southern California, to relocate.
Tucson is attractive to high-tech firms because of the presence of the University of Arizona and leading aerospace and optics manufacturers, he said. In addition, Tucson boasts available land, affordable housing and a good quality of life, he said.
But Sohn said new jobs are not being produced at the same rate as in past economic recoveries because business is relying on productivity gains, temporary workers and staff overtime, rather than hiring new employees. In that way, he said, companies avoid taking on new health care and other benefit obligations.
“The relationship between economic growth and new jobs has broken down,” he said.
Sohn said that of every vehicle sold by General Motors, $1,300 goes toward employee benefits. In contrast, employee benefits cost Honda $300 per car.
“That’s a huge competitive disadvantage (for GM),” he said.
Sohn said about 120,000 new jobs are being produced in the United States every month. He said he expects that number to grow to 200,000 to 400,000 during the second half of this year.
Asked if that job growth will come in time to benefit President George W. Bush in the November election, Sohn said: “That’s a toss up.”