.The Wages of Aging

Santa Cruz County’s economy saw a rebound in the last few years, but an aging workforce and the lack of high-paying jobs might spell trouble for the economy in coming years. These are some of the findings highlighted in the 2024 State of the Workforce report, which was released last month.

In one of the most expensive counties in the nation, low wages continue to be an issue as housing prices and the cost of living soar.

“Employment in Santa Cruz County has remained relatively high, but the cost of living has also remained high, largely due to elevated housing prices. In the county, wages have failed to keep pace with the cost of living, with only one in eight county residents able to afford to buy a median-priced home,” read the report, in part.

The number of residents 65 and over has increased, rising 2.9 percentage points from 2018 to 2022 and accounting for 17.5% of the population. By comparison, prime-working-age adults (25-54) saw a decline of 0.4 percentage points, putting the county below the state average at 12.1% in 2022.

“The aging of the county’s population poses significant challenges for the county’s economy and workforce in the years to come. It may contribute to potential shortages of skilled workers in the future,” the report says. “The lack of affordable housing, combined with relatively low wages, pushes working-age families out of the county, shrinking the size of the county’s prime working-age population.”

The quality of jobs in the county has also declined, with low-pay, low-skill jobs making up 57.7% of the total in 2023, compared to 56.3% in 2021. That is higher than the state average of 53.4%.

According to MIT’s Living Wage calculator, in a family of four with two children and two adults, each adult would have to work two jobs and make about $90,000 each to make a living wage here.

This reality is making young people think twice about staying in Santa Cruz County.

Ian McGlynn, 24, says he works three, sometimes four jobs in the retail and service industries to pay for a $2,600 one-bedroom apartment he splits with his partner. He moved up from Southern California to attend UCSC in 2017, and says that many of his friends have moved away recently.

Explaining that he’s at an age where he’s ready to start “the next chapter,” McGlynn says, “Santa Cruz doesn’t feel like a place where you can pull that off.”

Paige Dixon, 24, born and raised in the Aptos, works two jobs in the retail and service industries, down from three last winter. Living with her parents, she is trying to “have my life set up to sustain myself by the time I move out.”

Dixon says such a move would require “working at least two jobs” and putting in six days of work each week.

Despite the challenges, the economy is holding steady overall. In 2023, the county saw its biggest economic boom in the post-Covid era, adding 9,100 jobs—an increase of 9% from 2017 to 2022. That rise was led by high-paying industries such as defense, aerospace, transportation and manufacturing (DATM), which saw an increase of 222% during that time frame.

This high-earning cluster has an annual average compensation of about $159,000 per year, with many area jobs created by Joby Aviation. Between 2021 and 2023, the DATM industry increased by almost 50%. Overall, high-paying professions like these accounted for 19.4% of total jobs in 2023, down from 20.2% in 2021.

Mid-wage jobs, with an average salary between $50,000 and $74,000, are primarily found in the healthcare, education, building & design, and logistics industries, which together accounted for a significant portion of the 22.9% of jobs in 2023, down from 23.5% in 2021.” are mostly concentrated in the healthcare industry and accounted for 22.9% of jobs in 2023, down from 23.5% in 2021.

Although the county’s employment did grow by 5.7% between 2020 and 2023, it is growing at a slower rate than the state average, which increased by 9% during the same period. Unemployment in the area remained at pre-pandemic levels for 2023, mirroring the state at 4.8%. However, it is still higher than the national average of 3.6%.

The report highlights the importance of nonprofits in creating employment opportunities. In 2023, local nonprofits added 1,400 jobs.

According to the report, “Nonprofits like Dientes Community Dental and Digital NEST help to empower people in disadvantaged communities to develop the skills they need for the jobs of the future through mentorship, guidance, training, career fairs and expos, internships, tuition forgiveness, and other innovative programs.”Find the full report at workforcescc.com.