demographic-division
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New Report Shows Santa Cruz County’s Demographic Division

State of the Workforce highlights a number of disparities between north and south

New Santa Cruz County Business Council Executive Director Emily Ham says local companies struggle from high housing costs and traffic, but she sees reasons for hope. PHOTO: TARMO HANNULA

It doesn’t take a statistics degree to spot the geographic schism in Santa Cruz County.

The population is disproportionately whiter and high-earning in the northern end of the county than it is to the south, with a dividing line somewhere around Highway 1’s San Andreas Road exit, where the cost of living begins to get slightly more affordable. For working families, these informal boundaries can be a matter of life and death, as evidenced by California’s environmental screening tool, which shows Watsonville’s higher rates of asthma, unsafe housing and poor water quality. We saw similar phenomena in the disparity in health outcomes amid the Covid-19 pandemic, which hit South County much harder than it did other regions. 

There’s a word for this trend of geographic isolation: segregation. 

It isn’t getting any better, either—in fact, new research shows that the problem has only gotten worse over the past three decades. Like most areas across the nation, the Santa Cruz-Watsonville metropolitan region saw segregation increase from 1990-2019, according to UC Berkeley’s newly released findings from the Roots of Structural Racism Project, which came out last week. Not only that, but Santa Cruz-Watsonville saw the 16th-highest increase in segregation out of 209 regions studied over that span. Generally speaking, redlining and other exclusionary 20th-century American housing policies laid the groundwork for such divides and exacerbated them. 

In Santa Cruz County, it isn’t only race or socio-economic status that divides us. 

A comprehensive new report—Santa Cruz County 2021 State of the Workforce—shows a variety of stark disparities between the northern and southern reaches of the county. Among them are differences in educational achievement—with North County having much higher rates of high school and college diplomas—and also in age. South County residents are overall much younger than those in North County.

Such population differences can make it difficult for local officials to govern and plan, says researcher Josh Williams, who led the work on the new workforce report. 

“You have different economic profiles as you try to develop countywide policies, and what’s relevant in the north may not be relevant to the south, and vice versa. But it’s not totally unique to Santa Cruz,” says Williams, who’s based in San Diego County. “The Central Coast really has this issue. If you go from Santa Barbara up to Santa Cruz, it’s a beautiful area. It has a high quality of life, but it also has a high cost of living. They have all these affluent people who live there, but two of their biggest industries are tourism and agriculture. Those industries are generally low-paying. So you have these large employers that are low-paying in counties that are expensive. It creates a lot of challenges for the working poor.”

IN SICKNESS AND HEALTH

If Santa Cruz County’s wage disparities were bad before the spring of 2020, the Covid-19 pandemic only made them worse. 

Unemployment skyrocketed after the pandemic hit in March of last year, remaining high for months—particularly among lower-paying careers. According to findings referenced in the State of the Workforce, local low-wage workers saw their earnings drop 34% and middle-income workers saw them drop 23%, while higher-income workers saw a drop of merely 6%. 

Claudia Sanchez, a case manager for Families in Transition, remembers seeing the pandemic upend the lives of the families that she and her coworkers help. The terror caused by job losses and uncertainty is ongoing, she adds.

“The stress is a lot higher because of high unemployment and reduced wages,” Sanchez says. “Many parents needed to stay home and make decisions about what to do about their kids with schools and daycares closed. Many did get Covid and that cut their wages further. And then there was the stress of trying to keep their kids fed and pay the rent and keep their ends met.”

The combined industry cluster of tourism, recreation and hospitality already had the county’s lowest average earnings. Those jobs saw the greatest decline in employment—58%—between February of last year and February of this year, the report states.

A somewhat similar dynamic rocked local small businesses, which had a very hard time navigating the disruptions. Larger and wealthier corporations had an easier time reorganizing their operations and skating by, Williams tells GT.

Going forward, Williams says it would be too simplistic to say that the outlook for Santa Cruz County is either good or bad.

“I don’t think there’s a forecast that says it’s generally optimistic, it’s generally pessimistic. Economies don’t work like that,” says Williams, the president and founder of BW Research Partnership. “The forecasts are not up or down. They’re mixed. And it depends on what industry you’re in and how they’re being impacted.”

The Santa Cruz County Workforce Development Board hired BW Research to create the State of the Workforce report last year. The Santa Cruz County Board of Supervisors will hold a study session on the analysis, key findings and recommendations on Tuesday, Aug. 24. The county hopes to produce a similar report again next year.

Emily Ham took over as the Santa Cruz County Business Council’s new executive director about a month ago, and she says that now is the perfect time for an analysis jam-packed with so many insights. 

“Everybody’s taking the pulse right now to see where the chips have fallen, where the economy is headed. Everyone is trying to wrap their heads around that then prepare for our new reality,” Ham says. 

Ham herself has spent the past few weeks reaching out to Business Council members and local businesses to see where they are. Many of their complaints, she says, have been familiar ones. In addition to the stress of navigating an unprecedented health crisis, entrepreneurs tell her that transportation and high housing costs continue to pose challenges.

Transportation and housing were not featured prominently in this year’s report. Williams notes that last year’s shelter-in-place and work-from-home orders lightened up traffic on freeways and local roads, although it’s picking up again now. 

What happens next on transportation and housing is unclear. The report argues that the future of remote work presents both challenges and opportunities. 

On the one hand, remote work could keep cars off the road, and it also creates the potential for an expanded non-local workforce—as Santa Cruz County businesses could hire workers who don’t actually have to live in the notoriously expensive region. 

However, the county’s high quality of life could also draw in new residents who have jobs elsewhere and want nothing more than to live a little closer to the beach.

REC ROOM

The State of the Workforce makes five recommendations for how the county might move forward.

The top recommendation is for new measures to make it easier for employees to return to work, including through subsidized child care, new public health measures and the introduction of hiring bonuses. The other four focus on strengthening job training and collaboration across industries. Their scope extends beyond the county to education leaders and to the business community. But Workforce Development Board Director Andy Stone says many of the recommendations are in line with directions that the county’s already been taking.

The county already set aside $1.2 million in federal American Rescue Plan Act funding for expanding broadband access, supporting local apprenticeship programs and support for woman- and minority-owned businesses. Stone says some of the potential decisions around the size of more ambitious projects—like hiring bonuses and childcare—will be up to the Board of Supervisors. The county is working toward supporting local child care businesses, although spokesperson Jason Hoppin says there are no specifics to announce just yet.

While low wages are typical in the industries of agriculture and tourism, Williams says he’s hopeful that those sectors could retool. Basically, by embracing new technologies, there should be opportunities for such businesses to become more efficient and productive, while boosting wages, he explains.

In general, Ham says she’s optimistic about Santa Cruz County’s economy. 

The city and county of Santa Cruz are building more housing, and there will be many opportunities to collaborate on big solutions. 

“It’s such a great community to work with,” Ham says, “and everyone’s so willing to share knowledge and work together across different industries.”

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