Inland Empire Faces ‘Compound Crisis’ as Logistics Jobs Weaken, Inflation and Housing Costs Rise

The Inland Empire economy is showing signs of strain as rising costs, housing pressure, geopolitical instability and weakness in the logistics sector continue to weigh on households across the region, even as healthcare, professional services and cybersecurity offer some areas of growth.

Nick Schultz, interim CEO of Inland Economic Growth & Opportunity, or IEGO, said the region is facing what he described as a “compound crisis,” as inflation, housing costs and labor market pressures converge across the Inland Empire. Even amid those challenges, Schultz said growth in healthcare, professional services and cybersecurity could help strengthen the regional economy over time.

“Right now the biggest thing is the consumer price index,” Schultz said. “You have no relief coming in housing markets, no stimulus for a slowing labor market and continued upward pressure on the cost of living, where working families have no margin.”

Schultz said rising fuel costs are also adding pressure to household budgets and the Inland Empire’s logistics-heavy economy, where higher transportation expenses can quickly ripple across warehousing and goods movement.

He said the Inland Empire’s dependence on logistics and warehousing leaves it especially vulnerable when fuel prices rise, trade activity slows and geopolitical disruptions affect the broader supply chain. He also pointed to the region’s ties to the ports of Los Angeles and Long Beach, saying any sustained rerouting, congestion or drop in import volume could put added pressure on Inland Empire warehouses and distribution centers.

“What we’ve been seeing is a logistics sector that was already contracting a little bit,” Schultz said. “This is a direct hit.”

That pressure, he said, comes as many Inland Empire residents are already struggling with affordability, especially in housing.

Schultz said the region has seen some modest housing recovery tied to lower rates, but cautioned that any hoped-for rate cuts that might improve affordability are unlikely to provide much relief soon. In a market where affordability is already severely strained, he said even the prospect of higher mortgage rates could further squeeze residents.

Housing construction, he added, also remains misaligned with the needs of many Inland Empire families.

“It’s a building boom for the wrong people,” Schultz said. “We’re building around them, not for them.”

He said affordable housing often requires layers of subsidy and complicated financing that make projects difficult to deliver at scale, while higher-end apartments and larger single-family homes continue to dominate new development. Even when affordable units are included in larger projects, Schultz said their impact is limited.

“It’s a dent,” he said.

Schultz also pointed to a growing disconnect in the job market. While hiring is still taking place in sectors such as manufacturing, healthcare, information technology, business services and financial services, he said workers in shrinking industries may not always have the transferable skills needed to move easily into other careers where opportunity is growing.

“I think the bigger issue right now is the sectors that are contracting, or where people are losing jobs,” Schultz said. “Workers in those industries may not always have the transferable skills needed to move easily into other careers where opportunity is growing.”

For seniors and others living on fixed incomes, Schultz said inflation can quickly force painful tradeoffs in daily life.

“For a senior, the tradeoff might be groceries versus medication,” Schultz said. “Your heating or cooling bill versus eating. Those are serious things.”

Still, Schultz said the Inland Empire is not without opportunity.

He pointed to healthcare, professional and business services, and financial services as sectors showing growth, but said cybersecurity may offer one of the region’s stronger long-term openings, especially as compliance requirements tied to federal contracting expand.

“I would encourage folks in the region not to think about cyber just as information technology,” Schultz said. “I want people to think about it as an operational technology.”

He said the Inland Empire’s advanced manufacturing base and growing network of educational programs could help position the region to compete for future contracts and create jobs tied to cybersecurity compliance, infrastructure protection and industrial operations.

At IEGO, Schultz said his work is focused on the region’s economic base and on creating a stronger ecosystem for businesses, investors and workers alike.

“We’re really focused on thinking about a supportive ecosystem and an end-to-end ecosystem that really helps a business, an investor or a job seeker see the Inland Empire as somewhere where they can make money, or make more money,” Schultz said.

Even with the region facing significant headwinds, Schultz suggested the Inland Empire still has assets it can build on, particularly in sectors that connect education, advanced manufacturing and workforce development as businesses adapt to broader economic and geopolitical uncertainty.