Fresno State’s economic impact: Nearly 10,000 jobs, $717 million in spending

A new analysis shows that Fresno State represents a potent economic engine for the central San Joaquin Valley, with nearly 10,000 jobs and almost $717 million in overall output across the region.

Direct spending by the university and its affiliates amounts to nearly $382 million annually, the report said. When secondary impacts of that spending are calculated, the total jumps to over $700 million.

The study, announced Monday by university leaders, estimates several different measures of the direct and indirect economic influence of the California State University, Fresno, across Fresno, Kings, Madera and Tulare counties. From spending by the university and its auxiliary organizations, employees and students at businesses in the community, to the enhanced earning power of students who earn a college degree beyond their high-school peers, “this research study ... speaks directly to the symbiotic relationship that exists between Fresno State and the Central Valley,” university President Joseph I. Castro said Monday. “Fresno State is the leading driver in the Valley’s economy.”

“The way these studies work is in three stages,” said Antonio Avalos, the report’s author and chairman of Fresno State’s economics department. “First is the direct impact,” or the spending that the university does with vendors and suppliers, as well as its direct payroll spending. “The second is what we call indirect, because all these businesses that are being targeted by consumers – beer, books, apartments – they need to interact with other businesses to get the materials that they sell.”

“Number three is what we call the induced effects, because all of these businesses also have payroll,” Avalos added. “They have to pay employees, who in turn are going to spend again in the community.”

Avalos said the study analyzed the spending of the university as well as its affiliates – including the CSU Fresno Association, which owns and operates the on-campus Save Mart Center arena, the university’s agriculture foundation, the CSUF Athletic Corp. and the CSUF Foundation. That research estimates that those entities spent about 60 percent of their combined budgets – or about $154.3 million – with vendors and businesses in the four-county region.

Through the multiplier effects of those businesses spending that money in turn on their own payroll and business operations, Avalos’ study indicates a total impact of $258.1 million in the region, supporting nearly 2,400 Valley jobs outside the university.

That doesn’t count the payroll of more than $130 million a year for about 5,100 full- and part-time employees of Fresno State and the auxiliaries. Spending by those employees represented another $96.5 million in business sales, supporting almost 5,400 Valley jobs.

Nor does it consider spending by the 23,000 students attending Fresno State. Avalos estimates that students directly spent $260.5 million, which after multiplier effects supported more than 3,100 jobs Valley jobs. And while the study predates many of the restaurants and other business at the Campus Pointe center on the east side of the Fresno State campus, Avalos said students were spending their money even if it was in other parts of Fresno.

The study estimates that the university and its auxiliaries contribute to about 1.3 percent of total employment in the Valley, more than half of the jobs impact spread across the retail, health/social services, and accommodations/food service sectors of the economy.

In addition to the short-term economic effects, Avalos also examined the value that a university degree adds to the lifetime earning power of a Fresno State graduate compared to a worker with only a high school education.

“If a student stops their education at high school, they will have an income level and income profile over the 30 or 40 years of work life that they have,” Avalos said. But if they complete a college degree, he added, their income level and profile are more than four times higher, Avalos said.

“If you take the enhanced earnings over the work life and compare it to the cost of getting the education, you get an 11.6 percent rate of return,” Avalos added. “There is no other financial instrument that can pay you as much with such low risk.”

This story was originally published March 27, 2017 at 5:18 PM with the headline "Fresno State’s economic impact: Nearly 10,000 jobs, $717 million in spending."