Dan Walters: California's uneven recovery

dwalters@sacbee.comDecember 21, 2012 

California's unemployment rate has been declining fractionally as its recession-battered economy slowly improves.

After hitting bottom three years ago, the state has added more than a half-million jobs. Its unemployment rate has dropped from over 12 percent to about 10 percent – still one of the nation's highest, but definitely better.

We're still a long way from recovering the 1.4 million jobs lost when the housing industry meltdown plunged the state into the worst recession since the Great Depression.

That will take at least two more years, assuming that outside events – such as falling off the "fiscal cliff" or the European economic crisis – don't plunge us back into recession.

But California's recovery is also very uneven from geographic and demographic viewpoints. While the economy is hopping in the San Francisco Bay Area and Southern California's coastal communities, it's still struggling in inland and rural California.

The most recent employment data reveal that 34 of our 58 counties have unemployment rates above the state's average, and the gap is rather stark at the extremes.

While wealthy and overwhelmingly white Marin County's unemployment rate is under 6 percent, for instance, the residents of poor and mostly Latino Imperial County are five times as likely to be without jobs.

Economist Bill Watkins, who crunches numbers at California Lutheran University, puts it this way in a recent report on the state's economy: "California's schizophrenic economy is difficult to forecast. There are four centers of mass, and each of them is on a different path."

Watkins notes that while the Bay Area and San Diego are booming with technology, the Los Angeles area is still affected by the decline of its once-vigorous industrial sector, inland California "is suffering from what amounts to a depression" and the "Geriatric Coast" lives on the wealth of its retirees but is short of well-paying jobs other than those in medical care.

"Think of it as a big, wealthy Leisure Village by the Sea," Watkins says of the Geriatric Coast, which includes portions of San Diego and Orange counties, runs from Ventura County to the San Francisco Bay Area, then skips up to the counties north of the Golden Gate. "It will get older and richer, and increasingly unequal as the middle class continues to shrink. Don't expect much in the way of economic growth or job creation here."

If recovery follows the uneven path Watkins sees, it will exacerbate the state's already startling socio-economic fault lines.

The Census Bureau has been experimenting with a new way of measuring poverty. By that standard, California has the nation's highest proportion of poor people – as well as pockets of wealth and conspicuous consumption that are the envy of the world.

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