Cratering California- El Centro is CA future

Cratering California — Today’s Update

There’s more bad news from California, which has its worst unemployment figures in 25 years. The state has many advantages going for it, but is racking up far worse joblessness (10.5%) than the nation as a whole (8.1%). Decades of bad behavior in government, particularly open borders and flagrant overspending, can no longer be hidden through financial trickery and borrowing.

Plus, residents face skyrocketing taxes to fill (temporarily) the $40 billion hole created by Sacramento’s reckless spending.

The state unemployment rate jumped to 10.5 percent in February, a level not seen since 1983, as employers cut 116,000 payroll jobs in an economic slide that has left 1.95 million Californians out of work.

Friday’s report from the Employment Development Department charts a sharp rise from January’s 10.1 percent that bring the state closer to the 11 percent peak at the end of 1982 and beginning of 1983, according to current measures that go back as far as 1976.

The U.S. unemployment rate for February was 8.1 percent. During the Great Depression unemployment was reckoned as high as 25 percent.
[State jobless rate at 25-year high, San Francisco Chronicle, March 20, 2009].

It doesn’t help that California is rated as rock-bottom of all the 50 states as having an anti-business climate. For the fourth year in a row, Chief Executive magazine’s annual survey found California as the worst place to run a company.

Meanwhile, some areas of the “Golden State” have depression-level unemployment, as highlighted in NPR’s featurette about El Centro: Joblessness Becomes A Way Of Life In Calif. Town.

If the sagging economy has an epicenter, it may be El Centro, Calif., where unemployment tops 24 percent, the nation’s highest. For decades, people have crossed the border from Mexico into this part of California looking for jobs, but these days jobs are hard to come by.

“I can’t handle it. I’ve got to go back to live to Mexico again,” says Robert Duenas, who lost his job as a construction worker last summer in the housing bust. “It’s hard to live here. We are kind of broke.”

Scruffy El Centro is a vision of California’s Mexicanized future, unfortunately.

Joblessness Becomes A Way Of Life In Calif. Town

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Jose Rincon is seeing little business at his swap meet.

Amy Walters/NPR

Jose Rincon sells goods at $3 per bag in El Centro, Calif. He used to work in the fields, but the lack of steady employment brought him to this informal economy.

Where Unemployment Is High

Below are the top metropolitan areas with the highest unemployment rates in January, the latest month available.

El Centro, Calif., 24.2%
Merced, Calif., 18.9%
Elkhart-Goshen, Ind., 18.3%
Yuba City, Calif., 17.6%
Kokomo, Ind., 16.5%
Visalia-Porterville, Calif., 6.2%
Modesto, Calif., 16.0%
Salinas, Calif., 15.9%
Ocean City, N.J., 15.7%
Fresno, Calif., 15.7%
NATIONAL, 8.1% (February)

Source: Bureau of Labor Statistics

Aurora Chacon visits the Employment Development Department looking for a job.

Mandalit del Barco/NPR

Aurora Chacon visits the Employment Development Department looking for a job. She says the last time she looked in the newspaper, there were only five help-wanted ads.

This 'raspados' drink stand is one of the community's few affordable diversions.

Amy Walters/NPR

This raspados stand, which sells spicy fruit Icees, is one of the community’s affordable diversions.

All Things Considered, March 20, 2009 · If the sagging economy has an epicenter, it may be El Centro, Calif., where unemployment tops 24 percent, the nation’s highest. For decades, people have crossed the border from Mexico into this part of California looking for jobs, but these days jobs are hard to come by.

“I can’t handle it. I’ve got to go back to live to Mexico again,” says Robert Duenas, who lost his job as a construction worker last summer in the housing bust. “It’s hard to live here. We are kind of broke.”

Duenas emigrated from Mexico eight years ago and became a legal U.S. resident. Like many people in this mostly Latino town, he has ties to both countries. Wages are lower in Mexico, he says, but so is the cost of living. He has just about had it with El Centro’s economy. Mexicali, an industrial town on the other side of the border, boasts an unemployment rate of 3 percent.

“I look for a job every day, I knock doors and talk to the right person,” he says at the El Centro unemployment office. “But the right person says, ‘I don’t need people right now, because I have no money to pay people.’ ”

Vendors at the local swap meets say things are bad on both sides of the border. Besides the U.S. recession, the falling peso means fewer Mexicans are crossing over to shop.

No Business At The Swap Meet

Jose Rincon says people aren’t buying his merchandise — not even his special offer: $3 for a grab bag filled with clothes and electronics.

His cut-rate swap meet is practically deserted, and many of the local stores, restaurants and car dealerships have gone under. Whenever big chain stores announce that they’re hiring, hundreds of applicants vie for the few positions available.

“Honestly, everybody’s hungry to get a job, and they’re willing to do whatever they can. And there’s not very many positions,” says Aurora Chacon, a single mom with a teenage daughter and enormous medical expenses.

She got laid off after the farm company she worked for downsized. Now, she hopes it doesn’t take another eight months to find a job. She’s surviving on weekly unemployment checks and $500 in savings.

“You look in the paper, there’s five ads for help wanted — five,” she says. “For a driver, a hay stacker, and the other three were for nursing” — nothing for which Chacon is qualified. So until she finds another job, she and her daughter are rooming with her grandmother.

‘People Have To Survive’

That’s not uncommon, says Kimberly Collins, a border economics professor who lives in El Centro. She says chronic joblessness has become a way of life here.

“There are soup kitchens, and the food bank has lots of customers. But you don’t see people just milling around the streets because people have to survive,” Collins says.

“People rent out, they convert their garages,” she says. “They make them apartments. They bring in income other ways. And a lot of people have garage sales, and they’re continuously having garage sales.”

But these days, more garages are vacant. El Centro used to be a relatively inexpensive place to live in California, with three-bedroom homes selling for $150,000. Before the housing bust, construction and home sales were booming. Now, neighborhoods are filled with foreclosed houses with “bank owned” signs.

Even before the recession hit the rest of the country, El Centro was seeing double-digit unemployment.

“Typically, we were running 17 percent. We’ve always been double the California average,” says Ruben Duran, the city manager of El Centro, where the population is 40,000 and the median income is $34,000 a year. He notes that the job situation is even worse in smaller nearby communities.

An Informal Economy

Duran explains that some farm workers live in El Centro as legal U.S. residents only part of the year. When the lettuce season ends, for example, many of them travel farther north to pick different vegetables and fruit. Others choose to stay.

“Some folks work for the six months, and they’re done,” Duran says. “They don’t work; they draw unemployment and they have their savings.”

The area boasts many Border Patrol, Secret Service and FBI agents. The Navy air base and two federal prisons are also major employers. Many more people scrape by on an informal economy that goes under the radar. But even here, in a place where people have come up with creative ways to survive, getting by has gotten a lot harder.

Ernie Cortez sums up his job prospects while eating a snack of Hot Cheetos and peanuts with chili and lime: “It sucks. It really sucks,” he says. He hangs out at one of the few affordable places in this desert town: a stand where locals enjoy chili-hot raspados, or Icees, even when the temperature rises to 120 degrees.

“There’s a lot of struggle down here, basically. You get in trouble a lot,” Cortez says. “There’s nothing to do.”

Population change in the 1990s: +4,351 (+13.0%).

Unemployment in December 2008:

Here: 19.5%
California: 5.4%
El Centro races chart
El Centro compared to California state average:
  • Median household income below state average.
  • Median house value below state average.
  • Unemployed percentage above state average.
  • Black race population percentage significantly below state average.
  • Hispanic race population percentage significantly above state average.
  • Median age below state average.
  • Foreign-born population percentage significantly above state average.
  • Length of stay since moving in below state average.
  • Number of rooms per house below state average.
  • House age below state average.
  • Percentage of population with a bachelor’s degree or higher below state average.

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