Central Valley still mired in economic doldrums

By Brian Skoloff
THE ASSOCIATED PRESS

Last Updated: January 19, 2005, 07:51:30 AM PST

FRESNO -- Despite a steady influx of people, soaring home prices and increased development, residents of California's Central Valley have fallen behind the rest of the state with growing unemployment rates and income levels considerably lower than their counterparts, according to a new study.

"What we are doing now isn't working. Without a strategy, we won't grow our way out of these problems," said Carol Whiteside, president of the Great Valley Center, the Modesto-based think tank that conducted the study.

According to the report released today, six of the top 10 metropolitan areas in the nation with the highest unemployment rates are in the Central Valley, a vast 19-county region stretching about 450 miles from Bakersfield to Redding.

The population of the region is expected to increase by 24 percent between 2000 and 2010, making the Central Valley the fastest growing area in the state, according to the study.

However, jobs aren't keeping pace with the population boom, and skyrocketing housing prices are boxing out many longtime residents, said the study's lead researcher Don Schwartz.

About 50 percent of Central Valley residents cannot afford to rent a median-priced two bedroom unit, and per capita income for 2002, the latest figures available, was 26 percent lower than the state average -- $24,550 compared with $32,989 -- according to the study.

If the Central Valley were a state, it would only rank above West Virginia, Arkansas and Mississippi in per capita income, the study says.

With agriculture serving as the Valley's main economic base, the only solution to the region's economic woes is to diversify, adding jobs in other sectors such as renewable energy, pharmaceuticals and specialized crops, Schwartz said.
"We're growing in terms of people faster than we're growing in jobs," he added.

"The one bright spot is the Sacramento region, which is more and more becoming its own self sufficient region," added Great Valley Center spokesman Richard Cummings.

But it remains to be seen if that prosperity will trickle down to the southern portion of the Valley.

"Nowhere else in the country do you have all this growth occurring with such a weak economic base," Cummings said.
According to the study, 58 percent of the Central Valley's growth is because of migration into the area, of which 60 percent comes from the more expensive coastal areas. Many newcomers in the northern part of the Valley commute to the Bay Area for work.

"What we think is happening is, they're bringing in Bay Area wages and buying Central Valley houses," Schwartz said.
In turn, prices are rising beyond what many Central Valley residents who live and work in the region can afford, he said.
"We're called 'The Other California,' the place you drive through to get to the coast or the Sierra," Schwartz said. "Change of the nature we're talking about is long term and requires sustained commitment."

Juan Arambula, D-Fresno, a freshman lawmaker, said he hopes to help create an interagency state task force to focus on economic development in the Valley.

"The Central Valley has long been isolated from other regions of the state and insulated from changes in the economy," said Arambula, who chairs the state Committee on Jobs, Economic Development and the Economy.

"We cannot continue going on the path we have been on," he said. "We have seen the Valley become the new Appalachia in terms of deep pockets of poverty. I think the state has an obligation to help the region."