A Valley the Upturn Left Behind

By ERIC LICHTBLAU

Nov. 6, 1998 12 AM PT

TIMES STAFF WRITER

FRESNO —

These weren’t exactly dream jobs the vending machine manufacturer was offering in its “help wanted” ad. This was tedious assembly line work, affixing decals and buttons to Coke machines for maybe seven bucks an hour. On the swing shift, no less.

So when 835 would-be workers showed up at a Ramada Inn a few months ago to apply, the recruiters at Vendo were nothing short of amazed. The line stretched so long that the firm eventually quit taking applications. “We were just overwhelmed,” said a supervisor.

These are desperate economic times for many people in Fresno and the sprawling Central Valley region that surrounds it. Don’t bother the folks here with talk about the state’s bustling economy or its comfortably low unemployment rate. They haven’t seen it.

As farm laborers, industrial workers and white-collar managers alike have struggled to find work in the Central Valley, unemployment has languished stubbornly in double digits throughout the year--often two to three times the state’s 5.7% average, even higher in some pockets. Nor is there much sign of improvement, as job creation has failed to keep pace with a population boom.

In an area so dependent on its rich farming roots, some leaders insist that the valley’s tenuous job base will always be determined largely by the whims of Mother Nature. But others say the region has fallen back on that excuse for too long, and they blame a plethora of underlying causes--including political inertia, a failure to modernize and diversify the local economy, and a lack of proper training and education for the welfare-bound underclass.

An even bigger problem, some suggest, may be old-fashioned PR. Forced to expand beyond its generations-old agricultural base, the region has often failed to present a strong image to outside investors, critics say.

A national magazine recently ranked Fresno at the very bottom of a list of cities in which to start a business. The best business opportunity, the magazine quipped, is selling green cards to illegal workers.

“We’re literally the ‘other California,’ completely forgotten,” said Joseph J. Penbera, an economist at Regency Bank and Cal State Fresno. “This is the sum total of years of neglect. . . . Everyone wants to be associated with a growing, thriving urban area, and we’re not in a sexy area.”

Recent global uncertainties have made many outside the Central Valley nervous about the economy. But mere apprehensions are nothing like the deep-seated anxieties felt here in a region that stretches 400 miles from Shasta County south to Kern County.

Penbera spoke recently to a gathering of city managers from around the state, many of whom were wrestling with the enviable task of deciding how to spend excess tax revenues.

“I sat there and I just couldn’t believe it. That’s not a problem here,” he said. “Here, there are just so many people discouraged by these [economic] problems because they seem so insurmountable, and the contrast to the rest of the state is so stark.”

So stark that social service workers in Fresno County, where unemployment rose in the last monthly report to 11.1%, are encouraging some welfare recipients to consider leaving the area altogether, said Edwin Rivera, a county employment coordinator.

Even jobless professionals such as Bob Martin, once the high-paid chief executive officer at a Fresno HMO, are grudgingly looking for jobs elsewhere.

“The economy here is way behind Los Angeles and the rest of the state . . . and it doesn’t look like the area is in any hurry to attract business,” said Martin, 47, a native of the area whose employer folded this year.

“I always thought I’d have a job, and now 10 months later I’m still unemployed,” he said. “I’ve been able to get by on my savings so far, but with the economy the way it is here, it’s getting to the point where the only way I can find something is [to consider] taking a big pay cut just to get by. . . . It’s frustrating.”

Fabian Rodriguez, a 36-year-old landscaper in Fresno, has been out of work much of the last six months. His wife recently took part in a county training program to get back in the work force. The couple and their two children receive a welfare stipend to help pay their modest $225 rent, but they have struggled. “If we ain’t got a coupon [for a grocery item],” Rodriguez said, “we go without it.”

Region Must Do More

A few major new developments--such as a Pacific Telesis service center in Merced, staffed in part by ex-welfare recipients, and a Gap distribution center in Fresno--have stirred optimism.

“Our unemployment rate is too high, there’s no question about that. But we are seeing signs of hope,” said Fresno Mayor Jim Patterson, who recently survived a recall effort fueled partly by frustration over the city’s development efforts. “We are no longer being left off the search lists. Diversification just takes a little time.”

Still, the Central California Futures Institute said in a report this summer that “our region has not even dented its unemployment problem in the last five years,” spurring problems with crime, illiteracy and other social ills.

Mounting frustrations have given rise to a dizzying array of economic plans, seminars and business pitches in recent months.

Penbera, for one, believes that the region should declare a state of emergency and appoint an “economic czar.”

Even gubernatorial candidates Gray Davis and Dan Lungren stepped into the fray at an August debate in Fresno. In a rare moment of agreement, they said the region must do more to expand into agricultural-related industries and to capitalize on the job creation promised by a planned University of California campus in Merced.

But the campus won’t open until 2005, and business leaders such as Bill Evans, president of Tulare County’s Economic Development Corp., are tired of waiting for the good times to arrive.

“Patience my ass,” said Evans, who recently visited Europe trying to persuade investors to process cheese at facilities in Tulare County, where unemployment climbed last month to 13.7%.

“This double-digit unemployment is just unacceptable when the rest of the state and the country is on this great recovery,” he said.

“We have to wake up,” agreed Victor Lopez, mayor of Orange Cove, a rural community in Fresno County where up to half the 8,000 residents rely on welfare. “It’s so sad that here we live in the bread basket of the world, and yet we have many of the poorest cities in the state right here--the poorest of the poor, really.”

Stagnation in the Valley

On the lawn of Orange Cove’s City Hall, practically outside Lopez’s window, laborers in baseball caps and cowboy hats routinely congregate at picnic tables, playing cards as they wait for someone from one of the nearby packing plants or farms to come by offering work. Few have been by lately.

Antonio Garcia, 56, arrived a few months ago from Michoacan, Mexico, with temporary work papers in hand, hoping to pick grapes. He sat quietly with fellow laborers one hot morning recently, offering just a few words in Spanish about how he found a bed for $25 a week.

When the talk turned to work, he managed his only words in English: “No work for me here.”

Some 34% of Orange Cove’s residents are now unemployed, and the average adult earns just $4,000 a year--the lowest per-capita income in the state, the mayor said. The city has recently managed to attract big-dollar grants for day care and community centers, but revitalization is labored at best.

The town’s poorest people live in a row of tenement-like apartments just a few blocks from City Hall, a blighted neighborhood known sarcastically as “the Hilton.” Families of eight, 10, even 13 people cram into single-room units for up to $400 a month.

As children played under an open fire hydrant one recent morning, Bobby Durham wondered aloud how he would find the money to see a doctor about a painful ear infection.

Durham, a native of the area who looks much older than his 54 years, earns minimum wage for sweeping sidewalks and cleaning up around the complex. It isn’t enough, he says, but his options are few. “I can’t read or write. I ain’t got no teeth. Where am I going to find a good job?” he asked.

Nearby on the town’s main drag, the complex’s landlord, Susan Jones, had her own problems.

It was happy hour at the bar Jones owns, but the dimly lit place was almost empty, the pool tables vacant. Business is down almost 50% this year.

“We’ve got ‘For Sale’ signs up everywhere in town. There’s no cash flow,” said Jones, treasurer of the Orange Cove Chamber of Commerce--what there is of it.

“It’s not a dying town,” she said, “but it’s certainly stagnant.”

Stagnation is a word heard a lot in communities throughout the Central Valley. Eleven of the 15 counties with the worst unemployment in California lie in this sprawling region, with more than 210,000 people listed as unemployed among a population of about 5.5 million. An estimated 2.1 million people are working.

The Central Valley is considered the richest farm belt in the nation, with nearly $17 billion produced last year, and where as many as one in three jobs is tied to agriculture in counties such as Tulare and Glenn.

Demand for the region’s produce is expected to grow. Even so, workers have reason to worry: automation and a shift to pricier crops have lessened demand for certain laborers; and this year’s El Nino storms have cost farmers hundreds of millions of dollars in lost revenues.

Historically, the Central Valley’s reliance on farming has proven both a blessing and a curse.

It has insulated the region from the kind of severe economic downturn seen statewide from 1990-93, when California suffered its worst job losses since the Great Depression. The valley was “barely affected”--because it was removed from aerospace and related industries that went into a tailspin, according to a 1997 regional report by Pacific Gas & Electric.

But the area has also been much slower to reap the benefits of the state’s economic upturns, suffering chronic unemployment over the last three decades that has averaged nearly 50% higher than the rest of the state.

Unprepared Work Force

Many blame the problem on the inherently cyclical and weather-dependent nature of farming. Skeptics, however, have begun to sharply question such thinking.

“It’s one of those conventional wisdom things that over time has taken on mythological proportions,” said Carol Whiteside, who heads a public policy institute called the Great Valley Center.

Even at peak harvests, she noted, employment still lags 6% to 7% behind the state and nation, indicating problems well beyond the farms.

In fact, it is the region’s manufacturing sector--not farming--that saw a noticeable slowing in the second quarter of 1998, with jobs declining at a 6.4% annualized rate, said Joe Mattey, regional economist with the Federal Reserve Bank of San Francisco.

Total job creation was virtually flat in the first seven months of the year, increasing 0.5%, with just 5,300 new jobs, he said. That was far below the statewide expansion of 2.5%, which created 225,000 jobs. Southern California alone created more than 100,000 jobs in that time.

Although some areas have seen modest increases recently, growth has not kept pace with the influx of new residents, therefore jobless rates are higher in most counties than they were a year ago, bucking state trends.

The cheap cost of living--many apartments rent for a few hundred dollars, and an average house goes for $123,000--has attracted new arrivals by the carload. One study predicts that the population will grow through 2010 at a rate 50% higher than the state and twice the national pace, but Whiteside warns that little is being done to keep all those extra people working.

Particularly frustrating, valley leaders say, is the realization that businesses outside the area are making millions processing food grown here.

Valley tomatoes are shipped to Utah to be made into catsup, oranges are trucked to Southern California to make juice, and dairy products are routed to Wisconsin to be packaged as cheese, officials say.

Orange Cove’s Mayor Lopez grows angry just thinking about such exports.

“I could have those jobs. Why is that happening?” Lopez demanded. “We have the people here who want to work. Bring me the cheese, and I’ll cut it up for you right here.”

But some question whether the region’s work force would be able to fill any influx of new jobs.

Several high-tech companies have explored establishing new operations in the valley--only to abandon plans after discovering that “the work force was not as prepared as they’d expected,” said Richard Machado, state regional director for trade and commerce.

Indeed, “an unprepared work force” was identified as the No. 1 barrier to job creation at several regional forums held this year by the Futures Institute. “Not only are too many people without adequate skills . . . in many cases even basic math, language and work performance skills are lacking,” planners concluded.

In every one of the San Joaquin Valley’s counties, high school completion falls below the state’s 76% average--generally far below. Those who do graduate are less than half as likely to go on to the University of California.

A case in point was the recent round of hirings at Vendo, the vending machine manufacturer. Although 835 people applied, officials said they were barely able to fill the 120 openings; most of the applicants simply didn’t meet qualifications for written tests, work experience, or drug and criminal histories.

Deeply Rooted Attitudes a Problem

Improving the work force is crucial, believes Patterson, the Fresno mayor.

“It’s not that the jobs aren’t here,” he said. “But we have a rapidly growing population that often times is undereducated and underemployed. We just have to find a better way.”

Hopes may hinge on people like Cynthia Law.

A single mother of three, the 39-year-old Fresno woman hasn’t held a job for most of the last 17 years, relying on welfare payments that now total $682 a month.

She may be symptomatic of a Central Valley culture that has fueled unemployment by allowing too many people to live off welfare without aggressively seeking work, Fresno case workers say. “They get comfortable in the system. It’s a softer life,” said Marvin Johnson, a job-training supervisor.

Indeed, Law said that with the cost of living so cheap, “there was no pressure” to find work. “It was too easy just to sit at home and wait for the check to come. I [was] . . . always thinking something better would come along instead of going out to find it.”

That’s all changing as a result of welfare reforms capping the length of time that recipients like Law have to find work before they are thrown off the welfare rolls.

Law remembers crying over the mere thought of finding a job. “I thought, ‘There’s no way in the world I can do this.’ I’ve never done anything,” she said.

Recently, however, she took part in a three-week county training program--learning how to prepare a resume, interview with an employer and dress for work. Her mood is now hopeful.

“I’m at the bottom of the ladder,” she said, “but you have to start somewhere.”

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Central Valley Economic Woes

Unemployment has hit hard in the Central Valley, with jobless rates in most areas far above the state’s 5.7% rate average. Eleven of the 15 counties with the state’s highest unemployment lie in this region.

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County: Jobless rate

1. Tulare: 13.7%

2. Colusa: 11.5%

3. Fresno: 11.1%

4. Merced: 11.1%

5. Glenn: 10.7%

6. Yuba: 10.7%

7. Kings: 10.4%

8. Kern: 10.3%

9. Madera: 9.3%

10. Stanislaus: 9.1%