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January 2010, Volume 16, Number 1

California: Indicators, Napa, Immigration

The Great Valley Center (www.greatvalley.org) released a report on the Central Valley economy in November 2009. The 450-mile long, 19-county Central Valley is an agricultural powerhouse with a low per-capita income. If it were a separate state, the Central Valley would be number one in farm sales and number 48 in per capita income.

The GVC report offered five recommendations to speed economic development: 1) improve the quality of the work force; 2) support value-added agriculture; 3) diversify the economy away from agriculture; 4) learn the needs of rural communities; and 5) secure government funds to help people in need.

The Central Valley's population rose from 5.7 million to 6.7 million between 2000 and 2008. The Central Valley's population rose faster than the state's despite a low per-capita income, about $30,000 in 2007 compared to almost $42,000 for the state.

Labor force growth has been faster than job growth, helping to explain high unemployment rates, especially in the San Joaquin Valley. Employment growth between 2003 and 2009 was dominated by sectors that provide services to people, including educational and health services and government. California's unemployment rate in November 2009 fell to 12.3 percent from 12.5 percent the month before, but unemployment rates in the San Joaquin Valley continued to rise, topping 18 percent in Merced county and exceeding 15 percent in other San Joaquin Valley counties.

Between 2000 and 2007, homebuilding created many first nonfarm jobs for immigrant farm workers climbing the US job ladder. By 2009, construction employment fell sharply, and several Central Valley areas had among the state's highest foreclosure rates.

Agriculture accounted for about 10 percent of Central Valley employment in 2008, down from 20 percent in 2003. About two-thirds of California's farm sales are from the 19-county Central Valley (85 percent of these sales are from the San Joaquin Valley).

According to the GVC, wages are lowest in the areas of the Central Valley with the most farm workers, the southern San Joaquin Valley. GVC reported average hourly earnings of $9 an hour in 2008, compared to almost $10 for all California farm workers. However, EDD reported that the average hourly earnings of workers employed in California agriculture were $10.67 statewide in 2008 and $10.40 for the San Joaquin Valley. (www.labormarketinfo.edd.ca.gov/?PAGEID=158)

Salinas. Salinas, with 140,000 residents, has a higher murder rate than Los Angeles, largely because of conflicts between gangs. Many gang members are second- and third-generation children of farm workers, and all of the city's 27 homicides in 2009 were gang related. Salinas's mayor, who estimated that 10 percent to 15 percent of the city's families include a gang member, borrowed ideas from counterinsurgency efforts in Iraq under the state-funded Operation Ceasefire to try to identify gang members and win the trust of local residents to combat gang wars.

Most of the homicides are in the eastern part of Salinas, where many houses include two or more families who double up to afford the rent; housing prices rose faster than wages over the past decade. The most densely populated area of Salinas is in the vicinity of Towt Street and Garner Avenue.

Napa Housing. Napa county has three farm worker centers each with 60 beds for solo male migrant workers; they are operated by California Human Development Corporation or CHDC (www.chdc.org). The centers charged residents $12 a day in 2009; the actual cost of housing and meals was $29 a day. The difference is covered in part by a $10 an acre tax on grape growers who do not provide housing for their workers, raising $400,000 a year.

In 2000, newspapers reported on farm workers camping near the Napa River and sleeping outside a church in St Helena. At a time when wine production and prices were rising, there were "expos‚s" of poor treatment in an area dubbed "America?s Eden." A 14-member Farmworker Housing Oversight Committee estimated there were 200 to 300 beds for migrant workers in Napa county in 2000 and asserted that 1,200 to 1,300 were needed. In 2001, the housing authority put up yurts to house 40 migrant workers, but workers continued to sleep at the St. Helena church.

Vintner Joseph Phelps donated five acres to build a new 60-bed center and the state approved a law that allows grape growers to assess themselves to cover the deficit in migrant center operating costs. The River Ranch center was built at a cost of $6 million or $100,000 a bed in 2003. In 2009, the new River Ranch center, and the refurbished Calistoga and Mondavi centers, were not full even at the peak of the harvest in September? occupancy averaged 76 percent in 2009.

The major reason the subsidized farm worker centers are not filled with workers appears to be the preference of settled workers to live in houses or apartments in cities and the growing use of out-of-area contractors in the Napa Valley. Some well-established farm workers own homes in one of Napa county's five cities, and others commute from lower-cost cities outside the county. Many vineyards are farmed by management companies that rely on directly hired workers who are employed nine to 10 months a year, and supplement these crews with contractor crews from Stockton and other Central Valley areas. In some cases, farm labor contractor (FLC) crews commute two to three hours each way from Napa rather than stay in Napa overnight.

Workers seeking to live in the subsidized farm worker centers must show with pay stubs that they did agricultural work within the past year, but their legal status is not checked. Most Napa center residents have families in Michoac n and Guanajuato, and many of those sharing two-bed rooms are father and son or relatives.

The Napa housing experience offers a cautionary tale for assertions that "if high-quality farm worker housing is available, farm workers will fill it." Napa county is the only California county in which wine grape growers assess themselves to subsidize farm worker housing. The fact that high-quality farm worker housing remains vacant despite lengthy commutes highlights the difficulty of accurately forecasting the demand for beds for migrant farm workers.

Immigration. A quarter of California's 38 million residents were born abroad; California had over 10 million immigrants in 2008, and immigration accounted for almost half of the state's population growth that averaged over 500,000 a year between 2000 and 2008. Over 55 percent of the immigrants in California are from Latin America, including 45 percent from Mexico. Latinos are expected to surpass whites as the largest racial and ethnic group by 2015.

Between mid-2008 and mid-2009, population growth slowed to 350,000 a year, as the state lost 800,000 jobs and many residents moved to other states. The state estimated the population at 38.1 million in 2008; the US Census estimated 36.8 million residents. One reason for the difference is that the state estimates, based on drivers changing their licenses, show less outmigration. The federal government estimated net out-migration from California of almost 270,000 in 2005, while the state estimated net out-migration of 53,000.

The state projects that California's population will top 40 million in 2014. It assumes about 600,000 births a year, 260,000 deaths a year, net foreign migration of 250,000 a year, and declining net out-migration.

Most Latin American immigrants have little education, posing challenges for K-12 schools. Over 25 percent of California K-12 pupils are English Language Learners, compared to 10 percent of US K-12 pupils. Half of California K-12 pupils are eligible for free or reduced priced meals in school, compared to 40 percent of US K-12 pupils. Parental income is closely related to student performance; schools with students whose parents have lower incomes have lower test scores and graduation rates.

Researchers disagree about the prospects for integrating immigrants and their children. They agree that more efforts must be made to ensure that the children of especially Latino immigrants receive the education required to climb the US job ladder. However, researchers differ on exactly how to reform education and on whether immigration selection should be linked to prospects for integration. Public Policy Institute of California researchers urge a shift in educational spending from categorical programs requiring schools to spend state funds on particular programs to flexible programs that would allow schools, for example, to invest more in early childhood education.

UCLA geographer Clark recommends that the immigration selection system be re-oriented to select newcomers based on skills rather than family ties; he also recommends increased spending on education to assure successful integration. University of Southern California demographer Myers says less about immigrant selection and more about the need for aging baby boomers to "invest" in immigrants with little education so that they can earn more and pay the taxes that will be needed to finance pensions and health care; Hayes-Bautista et al made the same argument as Myers two decades ago.

Immigrants are almost 38 percent of California's workers and 16 percent of US workers. Immigrant workers are more closely tied to the business cycle? their unemployment rate is lower in good economic times and higher in bad economic times. Employed immigrants earn about 25 percent less than employed US-born workers in California. Their earnings rise with experience in California, but do not "catch up" to the earnings of similar US-born workers.

A November 2009 Los Angeles Times/USC poll found that most voters believe California is in long-term decline. A sixth of respondents agreed that "immigration is out of control," but more agreed that unauthorized foreigners should be allowed to earn legal status, 54 percent, than agreed that unauthorized foreigners should be removed from the US, 39 percent.

Budget. Despite sharp cuts to education, prisons and other programs and services, California had an estimated $6.3 billion deficit in 2009-10. With tax revenues continuing to lag behind projections, a deficit of over $14 billion is projected for 2010-11. Governor Arnold Schwarzenegger asked the federal government for $8 billion in aid in 2010-11 to avoid further social service cuts.

Schwarzenegger's new idea for 2010-11 is to offer $1,400 to employers or employee associations that train workers; they are reimbursed if the trained worker works for at least three months. Employers could also receive $3,000 for each worker who has received UI benefits that they hire, train and employ for at least three months.

California's general fund expenditures of $89 billion in 2009-10 include $6 billion in interest on general obligation bonds already issued, raising questions about whether voters will approve over $11 billion in new bonds to pay for water infrastructure in the November 2010 election. Every $1 billion in bonds requires about $70 million in annual debt service.

California's In-Home Supportive Services program (IHSS) program spends about $5 billion a year so that 350,000 caregivers can provide assistance to 450,000 elderly and disabled in their homes. About 60 percent of IHSS caregivers are relatives of the persons who "employ" them, and half of IHSS providers live with their "employer." The federal government covers about half the cost of IHSS services, the state a third, and the counties about 17 percent.

In an effort to combat fraud, Schwarzenegger persuaded the Legislature that caregivers and the people they serve must be fingerprinted. IHSS is one of the fastest-growing state programs, with costs to the state expected to top $2.5 billion by 2014-15.

AB 32. California's Air Resources Board in November 2009 outlined a statewide cap-and-trade system to limit greenhouse gas emissions from 600 power plants, refineries and cement plants in 2012. If carbon trades at the 2009 European price of $20 a ton, the California plan could cost state industries $8 billion a year in 2020. The 135-page draft rule, which implements Assembly Bill 32, does not specify whether permits to emit will be sold or given away to major emitters.

AB 32, enacted in 2006, requires California's emissions to drop to 1990 levels by 2020 and requires the California Air Resources Board to make an accounting of greenhouse emissions. In November 2009, CARB estimated that power plants and factories account for 43 percent of California's greenhouse emissions, followed by transportation at 36 percent (Californians use about 45 million gallons of gasoline a day). Some 65,000 facilities emitted more than 25,000 metric tons of carbon dioxide or related greenhouse gases in 2008, led by Chevron's Richmond refinery, which emitted 4.8 million tons in 2008 and Shell's Martinez refinery, which emitted 4.6 million tons.

Bedsworth, Louise et al. 2009. California 2025: Planning for a Better Future. PPIC. www.ppic.org/main/publication.asp?i=895 Myers, Dowell. 2007. Immigrants and Boomers: Forging a New Social Contract for the Future of America. Russell Sage Foundation. Clark, William A.V. 1998. The California Cauldron: Immigration and the Fortunes of Local Communities. Guilford Press. Hayes-Bautista, David, Werner Schink, and Jorge Chapa. 1988. The Burden of Support: Young Latinos in an Aging Society. Stanford University Press


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