Jobs growing in California’s Central Valley, but most wages still low, say labor leaders

As the central San Joaquin Valley sees a rise in warehousing and other low-wage jobs – some regional labor leaders say California can do more to address “widespread” concern with worker wages.

The Central Valley experienced the second highest rates of growth in low-wage sector jobs in the state since October 2019, trailing behind only the Inland Empire region, according to an analysis by the nonpartisan research group Public Policy Institute of California. The institute used labor market data from the California Employment Development Department.

Overall, Central Valley jobs grew by 2% between October 2019 and December. But low-wage jobs, including leisure and hospitality, and trade, transportation, and utilities — a category that includes warehouse jobs — grew faster, by 5%.

“Because job loss was concentrated in low-wage sectors (during the pandemic), the jobs recovery also skews in that direction,” PPIC researchers said in a blog post explaining the analysis.

High-wage work – jobs in sectors such as information, financial activities, and professional and business services – shrank by 1% in the Central Valley during this same time frame, according to the PPIC analysis.

According to a separate PPIC survey of 2,307 California adults titled “Californians and Their Economic Well-Being” which was released in November, 82% of Central Valley adults view the lack of well-paying jobs as either a big problem or somewhat of a problem.

The Inland Empire was the only region in California with higher rates of concern about the lack well-paying jobs, at 88%.

Ana Padilla, executive director of the UC Merced Community and Labor Center, said the survey indicates that “where warehousing is soaring, there is widespread public concern with worker earnings—particularly in the Inland Empire and the Central Valley.”

Central Valley labor, workforce leaders think wages can improve in region

Despite the challenge of low wages in the Central Valley, regional workforce and labor leaders say things like strengthened labor protections and job training can raise wages in the region.

Blake Konczal, executive director of the Fresno Regional Workforce Development Board, said that in addition to the decline of small businesses and rising inflation, the question of low wages in the Central Valley is “really a question of education and job training.”

“Access to good job training (and) career training directly linked to employment is the answer to that problem.”

The PPIC survey found that a majority of Californians across partisan groups support increased government funding for job training programs.

“The findings are a call for greater public engagement not in changing the industries in the state — because we already have profitable industries — but in wage standards and how business is done,” Padilla of UC Merced said. “Without those greater standards, any industry could move here and advance low-paying jobs, and it seems the public is already concerned about that.”

Can more unions raise Central Valley wages?

Meanwhile, Dillon Savory, executive director of the Fresno-Madera-Tulare-Kings Central Labor Council, which represents 50 unions in the four-county region, said the problem of low-wage jobs is a “symptom of the overall problem within our existing economy” that goes beyond the Central Valley.

He said a combination of complex issues – from worker misclassification as independent contractors to the decline of small businesses to the “broken” labor laws in the country – are just some of the contributing factors leading to the growth of low-wage jobs.

“At this point,” he said, “corporations in America and in California know that they can pay people poverty wages, and those people will have to go get subsidized government assistance.”

Savory thinks that one way wages can rise in the Central Valley is through a stronger presence of unions throughout Valley industries, so that employers have no choice but to raise their wages.

He pointed to the Central Valley’s food production industry, from the processing to packaging to retail sectors, “we have pretty good density union-wise in that industry.”

The “magic” with having enough density in an industry, said Savory, “is that the non-union employers, like Costco, feel the need to absolutely up their game and treat their employees well enough where they won’t leave for another job in the same industry.”

Which job sectors have grown in the Merced area over the past year?

According to EDD labor market data on Merced County, total industry employment increased by 2,000 jobs between October 2021 and October 2022.

Non-farm employment rose by 2,000 jobs while farm employment did not add any jobs during this period. The sector that saw the most growth in this time frame was the government, which added 1,000 jobs and grew from 19,100 to 20,100 jobs.

Leisure and hospitality expanded payrolls by 600 jobs from October 2021, raising total jobs from 6,500 to 7,100.Education and health services added 400 jobs, raising total employment from 10,700 to 11,100 during this time frame.

Mining, logging, and construction added 200 jobs, while professional services and other services added 100 jobs each. Meanwhile, trade, transportation, and utilities dropped by 400 jobs, compared to October 2021.

This job loss was concentrated in retail trade, which dropped from 8,700 to 8,300.