Unemployment in Santa Cruz County dropped to 6.2 percent in September, the lowest rate since June 2008. California’s overall unemployment rate hit 7.3 percent, another low point since the recession, according to the Bureau of Labor Statistics.
The unemployment rate is not uniform throughout the county. Watsonville and Freedom have the highest unemployment in the county while Santa Cruz, Aptos and Capitola are below the state average.
Understanding economic stability in Santa Cruz County is complicated because seasonal, low-wage work dominates county employment. To further stabilize the county’s economic condition, work is being done to attract new, higher-paying industries and develop cheaper housing for new workers.
“It is important to remember a lot of our economy is based on agriculture, hospitality and tourism,” said Gary McNeil, the interim director of workforce development in the county’s human services department. “If you have something going on such as the great recession, where other sectors are being hit hard and others are losing jobs, it really affects our unemployment rate.”
The unemployment rate in the county has been constantly shifting since 2008. In February 2010, the county hit 15.5 percent unemployment, the highest recorded rate for the county, according to the Employment Development Department.
Of Santa Cruz’s three biggest economic sectors — agriculture, tourism and health care — two of them are seasonal. Employers in the agriculture and tourism sectors typically lay off their workers when the busy seasons end. This makes it harder to assess the county’s unemployment level because employees could lose their jobs at any time.
Barbara Mason, the county’s economic development coordinator, said agricultural work is now becoming more stable and allowing more people to retain work within the sector for longer. Out of the 105,200 jobs available throughout the county in September, the agricultural sector is the most dense category with 11,800 workers, according to the Employment Development Department.
“It becomes less transient over the years because farmers have become really good at dealing with what to grow month-to-month and the farms don’t close,” Mason said. “The farmers have been skilled in making sure the crops are rotating out to other products to make sure the workers are there year round.”
Extended warm periods without rain have benefited the tourism sector, attracting customers for a longer period of time.
“We’ve also got tourism, and tourism is cyclical,” Mason said. “We end around Labor Day on a normal year, and then you’ll start to see all of the unemployment rise again. Anything tourist related, like restaurants and hotels, does not need as much staff during the off-season.”
The Santa Cruz economy’s seasonal quality makes it difficult to understand employment trends in the area, Mason said.
“It’s the nature of our economy to be cyclical here. We will see a better balance come in over time where there will be more opportunities for full-time jobs,” Mason said. “It’s kind of a faulty method to see, how can we not have such a large dip? We’re always going to have a dip. It’s the nature of the types of markets we have here.”
Due to its proximity to Silicon Valley, Santa Cruz has seen growth in its technology industry. Websites like Santacruzworks.com specialize in making tech job listings more accessible to the community and aid companies in finding interested employees.
Santa Cruz Chamber of Commerce director Bill Tysseling said Santa Cruz needs to develop more stable and reliable infrastructure to attract new industries and drive down the unemployment rate.
“As an economic development matter, the core remedies for job creation tend to have to do with developing infrastructure that make employers interested in investing,” Tysseling said. “Here, that is most acutely water transportation and housing.”
Allowing other industries to settle in the area would bring in higher paying work, as the agricultural and tourism fields are low-end paying jobs, Tysseling said.
“The secret to paying higher wages of course is to have more successful businesses,” Tysseling said. “That does have to do with those basic infrastructure problems that need to be solved and the other things that are constrained to have businesses invest.”
Tysseling added that the high cost of living deters individuals from moving to Santa Cruz. It also keeps UC students from staying after graduation, which hinders county prospects of developing stable industry capable of employing a large number of residents.
“One of the key things to do is to build housing that makes it possible for students who want to stick around to do that and to live in something other than somebody’s garage,” Tysseling said.
Economic development coordinator Mason said accessory dwelling units, also known as granny units, can be a solution to Santa Cruz’s housing crisis. These units are built behind existing homes as opposed to requiring a full lot.
“Small granny unit houses are something students or young families can get started in,” Mason said.
Without affordable housing, individuals will not consider moving to Santa Cruz for work.
“If we are unwilling to develop denser housing designs, then Santa Cruz is almost certainly going to follow the laws of supply and demand,” Tysseling said. “It will become increasingly difficult for business to invest here because there will be fewer and fewer affordable places for their workers to live.”