While most indicators signal an economic upswing in California, the reality facing many residents of the Golden State is simple: On the ground, the recovery is still sluggish.
Nowhere is that more apparent than in a newly developed database that includes detailed economic information on each of California’s 120 legislative districts and 58 counties.
In every California county, Assembly district and Senate district, unemployment through May was at least equal to or greater than pre-recession levels, according to estimates from the CCJE’s database, which uses information derived from public and private sources.
More than six years after the Great Recession began and five years since it officially ended nationwide, no California legislator represents a constituency with a lower jobless rate than in mid-2007, before the economic downturn started, according to the database crafted by the California Center for Jobs and the Economy (CCJE).
California’s GDP grew by 2 percent in 2013, enough to surpass Italy and Russia as the world’s eighth-largest economy, according to initial estimates released this month by the World Bank and analysis by the Center for Continuing Study of the California Economy (CCSCE).
But even as most economic performance gauges have improved in recent months, the sheer depth of California’s backslide from late 2007 to 2009 — paired with the period of unsteady growth that followed — is ensuring that the unemployment and poverty rates, while trending downward, remain uncomfortably high in many areas of the state.
“Yes, California is doing better, (but) we have the potential for significantly greater growth,” said Kevin Klowden, director of the California Center of the Milken Institute, a nonpartisan economic think tank.
Combing over economic data
In every California county, Assembly district and Senate district, unemployment through May was at least equal to or greater than pre-recession levels, according to estimates from the CCJE’s database, which uses information derived from public and private sources. The Center — affiliated with the California Business Roundtable, a business advocacy and research group — developed the database as a tool to break down complex economic data for state legislators. The database was quietly unveiled in March.
“For us, it was really about trying to get folks under the Golden Dome to focus on the data,” said Kirk Clark, vice president of the California Business Roundtable. “Our thinking was, if we can break it down to their district level, (then) that personalizes it to the point where they can really engage. There are other datasets out there that look at the statewide level, or look at the county level, but we really thought if we can take it to that (the legislative district) level it would really begin to be more impactful to legislators.” The database can be accessed here.
Districts in the wealthy suburbs of California’s major coastal urban areas — including much of San Francisco, San Mateo, Marin and Orange counties, pockets of the East Bay and areas north of San Diego — have fared the best in the recovery.
The CCJE worked with figures from the U.S. Census Bureau, California Employment Development Department (EDD), Bureau of Labor Statistics and other agencies to create the database. The unemployment figures for Assembly and Senate districts were developed using data from the Census Bureau’s American Community Survey (ACS), which breaks down employment and unemployment by location within a county.
“The ACS gives us a running long term average that takes into account factors such as major employers leaving or closing in a county and which part of the county it affects the most, and gives us an update on the factors each year,” said Michael Kahoe, who helped develop the CCJE database. “This method is used precisely because it accounts for counties like Los Angeles where the employment and unemployment levels vary greatly in the different parts.”
Clark added that the Roundtable’s data tool, which was developed with considerable input from the EDD, is “As good as you could get for approximation of (legislative district data). And no one else has that yet.”
An uneven recovery
While some areas of the state are certainly thriving, others lag far behind.
Districts in the wealthy suburbs of California’s major coastal urban areas — including much of San Francisco, San Mateo, Marin and Orange counties, pockets of the East Bay and areas north of San Diego — have fared the best in the recovery. Those regions managed to match their June 2007 jobless rates by adding thousands of jobs in the health services and technology sectors, said economist and CCSCE director Stephen Levy.
In an area where the weather’s impacts on agriculture can sink or float the economy of an entire region, the Valley’s economy is fighting with its hands tied.
But much of the rest of the state, especially the agriculturally agriculture-heavy interior, is still digging itself out of the recessionary quagmire.
The entirety of the Central Valley, with the exception of the somewhat sunnier Sacramento region, has struggled to reduce a stubborn jobless rate that hovers well above pre-recession levels. Colusa County and Imperial County lead the state in unemployment, at 15.6 and 21.1 percent, respectively. While Levy said agricultural areas typically have higher rates of unemployment because many farms jobs are seasonal, current unemployment in Colusa and Imperial still dwarfs their 2007 jobless rates.
All four of the most impoverished state Senate districts are represented in the Legislature by Republicans from the Central Valley and Eastern Sierra. Each of the four most impoverished state Assembly districts also contain territory in the Central Valley, led by the 23rd district of Assemblyman Jim Patterson, R-Fresno, at a 31.4 percent poverty rate as of 2012.
The state’s drought, to top it off, can only further damage the Valley’s prospects for recovery, Klowden said. In an area where the weather’s impacts on agriculture can sink or float the economy of an entire region, the Valley’s economy is fighting with its hands tied.
A UC Davis study released Tuesday estimated that employment losses from the drought could reach 17,100 seasonal and part-time jobs.
“The potential for seasonal employment to kick in is reduced considerably when you’re dealing with a major sector of the economy being inhibited,” Klowden said.
An alternative poverty study conducted by the U.S. Census Bureau that included California’s high cost of living tabulated the state’s poverty rate at nearly 24 percent over the three-year period from 2010 to 2012 — highest in the nation by a wide margin.
California’s statewide unemployment rate is 7.1 percent, down from a peak of 12.9 percent in January 2010 and a steady decline from 8.5 percent this January, but still above the current national unemployment rate of 6.1 percent, according to the CCJE and EDD.
“The recession was unusually heavy in California,” economist and CCSCE director Stephen Levy said. “(California’s unemployment rate) started three points higher than the national average, and now we’re only a point or more above the national average. (We’re) going in the right direction.”
Although the gap between California’s jobless rate and the national average has narrowed considerably since 2013, a January study by the Public Policy Institute of California found that job growth in the Golden State typically tracks with the nation as a whole. Because California has created new jobs at or above the national pace in recent years, but its population has grown proportionally faster, the study advised that “California unemployment is likely to remain above the U.S. level for some time to come.”
Impacts on income inequality and poverty
The asymmetrical recovery, which favors wealthy coastal and urban areas over the state’s other regions, may also be contributing to an exacerbation of income inequality in the state, Levy indicated.
California’s poverty rate, as measured by the federal standard, was 15.9 percent in 2012, representing more than 6 million Californians and hovering over the national average of 15 percent. An alternative poverty study conducted by the U.S. Census Bureau that included California’s high cost of living tabulated the state’s poverty rate at nearly 24 percent over the three-year period from 2010 to 2012 — highest in the nation by a wide margin.
Those figures likely fell in 2013 as the California economy swung back into gear, but Levy said that economic gains from the recovery thus far have favored skilled workers who already earn higher wages than their unskilled peers.
“In terms of wages, most of the gains everywhere in California have gone to people with higher skills,” he said. “That’s a national phenomenon, that wage gains for unskilled workers have lagged.”
Even with recent improvements in GDP growth and unemployment, Levy suspected that the 2013 poverty numbers — which have yet to be released by the Census Bureau — will be “bad but better” than the year before.
“We’re not seeing as much of a recovery in the middle class,” Klowden said. “If you look at California, the disparity between the richest counties and poorest counties is greater than the disparity between the richest and poorest states.”
Still, recent trends have left Levy optimistic for California’s economic future.
“2013 and 2014 (have been) very good years in California,” he said. “There are people who are left behind, but it’s doing about as good a job as it can for this level of growth.”
Ed’s Note: Connor Grubaugh, a student at UC Berkeley, is a Capitol Weekly intern from UC’s Sacramento Center.