Skip to navigation
Skip to main content
April 2012 Volume 18 Number 2
California: Parlier, Calexico, Budget
The San Joaquin Valley is the agricultural powerhouse of the US and California. California accounts for an eighth of US farm sales, largely because it produces high value fruit and nut, vegetable and melon, and horticultural specialty (FVH) crops such as nursery products and flowers. Over three-fourths of the state's $37 billion in farm sales in 2010 were crop commodities, and almost 90 percent of the $28 billion in California crop sales represented labor-intensive FVH commodities.<< back
About half of California's farm sales and farm employment are produced in the eight-county San Joaquin Valley with four million residents that stretches from Stockton in the north to Bakersfield in the south. The leading US farm county is Fresno, which had farm sales of almost $6 billion in 2010.
High farm sales and high poverty rates go together in the San Joaquin Valley. Over a quarter of Fresno county's 935,000 residents, 27 percent, had incomes below the poverty line in 2010, and over a third of Fresno county's school-aged children were poor. Neighboring Tulare county had the second-highest farm sales, almost $5 billion, and the second-highest poverty rates.
Over 20 percent of residents of San Joaquin Valley cities such as Fresno and Merced lived in high-poverty neighborhoods in 2010, defined as those with poverty rates of 40 percent or more.
Alan Berube of the Brookings Institution says that the San Joaquin Valley added jobs during the construction boom of 2002-07, and now offers fewer farm jobs for those who lost construction jobs. Berube echoes many reports by concluding that the San Joaquin Valley must improve the skills of residents and diversify the economy away from reliance on seasonal farm jobs. However, many San Joaquin Valley youth go away to college and do not return because there are few jobs for college graduates.
Almost half of San Joaquin Valley residents are Hispanic. Despite high poverty rates and double-digit unemployment rates, the San Joaquin Valley continues to attract immigrants from rural Mexico. Indeed, so many rural Mexicans have moved to the San Joaquin Valley in the past decade that many Fresno county cities have per capita incomes that are similar to the per capita income of Mexico, about $10,000 or $14,000 at purchasing power parity (PPP) in 2010 (PPP makes adjustments to reflect the fact that living is cheaper in Mexico).
Parlier, the buckle of the raisin belt in Fresno county, epitomizes the farm worker cities of the San Joaquin Valley. Parlier had almost 15,000 residents in 2010, and their youthful age profile was similar to that of Mexico; 30 percent of Parlier's residents were under 15, and less than six percent were over 65. Almost all of Parlier's residents are Hispanic, and 80 percent speak a language other than English at home. Parlier's per capita income was $10,800 in 2009, half the average for Fresno county.
The rural Mexicans who move to Parlier are seeking higher incomes and more opportunities. If they had stayed in rural Mexico, they would have had incomes lower than the Mexican average. Moving to Parlier is rational for rural Mexicans because it helps them to increase their incomes from perhaps half the Mexican average in Mexico to the Mexican average in the US. Many immigrant parents say they want to give their children more opportunity by moving to the US.
Unemployment rates in major farming counties in recent years have topped 17 percent during the winter months. California's unemployment rate was almost 11 percent in winter 2012, significantly above the US rate of 8.3 percent in March 2012. One reason California's rate has not declined is because more state residents are seeking jobs in the improving economy.
Place Matters released a report February 29, 2012 emphasizing that 30 percent of San Joaquin Valley residents did not have high school diplomas, compared to 15 percent of US residents. It found a wide variance in life expectancy by zip code, from 69 to 90, with the lowest life expectancy in zip codes with more low-income Hispanics. Poor air quality was also more common in areas with more low-income Hispanics, helping to explain why a sixth of San Joaquin Valley children are diagnosed with asthma before reaching 18.
The so-called Latino health paradox was explored in Place Matters. The health status of immigrant Hispanics is similar to that of non-Hispanic whites, but health status deteriorates for second- and third-generation Latinos raised in the San Joaquin Valley. Reasons for deteriorating health outcomes range from poor diets to the ready availability of fast and processed foods. Place Matters calls on federal, state, and local policy makers to increase and reorient spending to improve the health status of poor San Joaquin Valley residents.
The Marin Workforce Housing Trust estimates that Marin county farmers employ 500 farm workers to generate farm sales of $50 million a year. John and Karen Taylor of the 300-cow Bianchini Ranch say they provide housing for five full-time employees. Efforts to use a mix of federal, state and grant monies to improve farm worker housing drew little interest from farm workers in March 2012, even though organizers said they would not ask anyone about their immigration status.
A University of California/Davis study released in March 2012 concluded that the ground water consumed by residents of the San Joaquin and Salinas valleys is often contaminated with nitrates from fertilizer applied to crops and manure from dairy cows. The researchers concluded that it would be cheaper to close down contaminated wells than to reduce the application of nitrates in agriculture, the region's economic engine.
Calexico. The AP reported on border commuter workers in California's Imperial Valley April 1, 2012. Many of the field workers employed in Imperial county, where the unemployment rate was almost 27 percent in February 2012, live in Mexicali and commute daily to the US. Many begin their commute very early, at 2 or 3 am, so that they can cross the border and walk to La Dona, a gathering spot for workers and crew leaders. The wait to cross the border has increased from 10 to 20 minutes in the 1990s to an hour or two today.
Crews depart from Calexico for the fields between 5 and 6 am, returning between 2 and 4 pm in the afternoon. California's minimum wage is $8 an hour, and most workers earn the minimum wage in hourly jobs, and $9 to $10 an hour in piece-rate jobs.
Interviews with local farmers suggest that US workers will not do farm work. Steve Scaroni believes that Americans would not take the jobs he offers even if he paid $15 rather than $9 an hour because "Nobody raises their kids to be farm workers." Jack Vessey, who grows vegetables and melons on 10,000 owned and leased acres, uses Scaroni crews for harvesting.
The Imperial Valley includes about 480,000 acres of farm land between the Mexican border and the Salton Sea. It receives about 20 percent of Colorado River water via the 82-mile All-American Canal that was constructed in the 1940s, enough for six million homes. Under the first-in-time, first-in-right water law, farmers who productively began to use Colorado River water retain the right to continue using it.
In 2003, the 1,300-employee Imperial Irrigation District agreed to sell water to San Diego over the next 75 years, the largest farm-to-city water transfer in the arid west. About 6,000 acres of Imperial farm land have been idled to send water to San Diego via the Colorado Aqueduct owned by the Metropolitan Water District of Southern California. Most studies find that the payments made by San Diego for this water have more multiplier effects on employment in the Imperial Valley than would have occurred if the idled land had been farmed.
Federal, state and local government agencies, from the 1,240 Border Patrol agents to two state prisons that employ 2,400 guards, employ a third of Imperial Valley workers. However, most private-sector jobs offer low wages, such as sales jobs in three Wal-Mart Supercenters that cater to shoppers from Mexicali, a city of a million.
Stockton. Stockton may become the largest US city to declare bankruptcy if mediation with public employee unions and major bond creditors fails. The city of 290,000 faces a budget deficit of $20 million to $40 million because of pension and health benefit promises to public employees and water-front-redevelopment efforts. Both were to be paid by developer fees from new housing, but development slowed after 2007. Forbes magazine has twice named Stockton the worst US city.
Bankruptcy is normally a collective process. Procedures encourage creditors to come together under court oversight and negotiate a plan to share the losses equitably for the sake of the greater good. When private firms go bankrupt, the federal government, which insures traditional company pensions, takes over the defunct plan and pays retirees their benefits, up to statutory limits. There is no insurance backstop for municipal pensions, but Calpers, the state pension system, argues that the state Constitution bars any reductions in pensions promised to workers. Vallejo reduced health care benefits for public employees, both active and retired, when it filed for bankruptcy, but not pension benefits.
Budget. Governor Jerry Brown proposed a $93 billion general fund budget for 2012-13 that included a $9 billion deficit. Brown proposed to close the remaining deficit with spending cuts and an initiative that would raise sales taxes by 0.5 percent and raise income taxes for couples earning more than $500,000 a year. However, two other initiatives would also raise income taxes, prompting a debate over of the virtues of the competing tax efforts.
The California Federation of Teachers (CFT) proposed an initiative that would raise taxes only on those earning $1 million or more, while the daughter of the Berkshire Hathaway Vice Chairman, Molly Munger, proposed an initiative that would raise taxes for most California residents in order to provide additional funding for K-12 schools. In March 2012, Brown reached an agreement with the CFT to combine forces on an initiative that would raise the sales tax by 0.25 percent and raise taxes on high earners. Polls suggest that over 60 percent of Californians support the Brown-CFT initiative to raise taxes.
Rankings of countries by their GDPs in 2011 had the US first at $15 trillion; followed by China at $7 trillion; Japan at $6 trillion; Germany at $3.6 trillion; and France at $2.8 trillion. The UK is number six at $2.5 trillion; Italy seven at $2.2 trillion; and Brazil eight at $2.1 trillion. California had a $1.9 trillion GDP in 2011.
Ajinkya, Julie. 2012. Toward 2050 in California. A Roundtable Report on Political Participation in the San Joaquin Valley. Center for American Progress. March. www.americanprogress.org/issues/2012/03/fresno_2050.html Larry Parsons, "Report: Nitrate pollution beginning to affect Salinas Valley water quality," San Jose Mercury News, March 13, 2012. Kurtis Alexander, "Fresno County has state's highest poverty rate," Fresno Bee, November 30, 2011. Joint Center for Political and Economic Studies and San Joaquin Valley. PLACE MATTERS. 2012. Place Matters for Health in the San Joaquin Valley: Ensuring Opportunities for Good Health for All. February 29. www.jointcenter.org/newsroom/press-releases/joint-center-releases-reports-on-how-poverty-concentration-and-racial-segr-0