Thursday, September 23, 2010

If Fresno is "awful" and "Looks Like Detroit," I wonder what Meg Whitman thinks of Stockton?

OK, I'll bite on the Fresno/Detroit comparisons following Meg Whitman's comment,  as reported in the article in the Fresno Bee.  I agree that Whitman's comment is being blown out of proportion, but it is a teaching opportunity about the Valley Economy.  My perspective is someone who was born in Michigan, now lives in the Valley, is a professional regional economist, and has spent a fair amount of time in each area over the years.

First, about the numbers.  The Bee makes valid comparisons of economic conditions inside the city limits, but does not compare the greater metro areas.  This is deceptive, as one of the key differences between Fresno and Detroit are the surrounding areas.  The city of Detroit is indeed very bad, but its suburbs and surrounding small towns are much more prosperous, and more people in the Detroit area live outside the city limits than inside.  The Detroit metro area includes over 4.4 million people, and only 900,000 live in the city (about 20%).  In the Fresno metro area, half the population lives inside the city limits and a lot of the surrounding areas are actually poorer (some areas are more affluent like Clovis).  So, if you compare the statistics for the larger metro area, the Detroit area has significantly higher income than Fresno.

Detroit is indeed a sad case of one of America's greatest and most affluent cities that has been sliding substantially backwards.  The Detroit situation is similar to a lot of old industrial cities in the Eastern U.S. some of which are struggling (Cleveland), others that are prospering (Baltimore), but all have a poor, high crime, shrinking population, urban core city as families left for the suburbs.

Next, some quotes from the article.  I actually liked and agreed with this comment from the Whitman campaign.
"Meg knows that Fresno cannot be left behind as it has been in the past when the economic situation around the state gets better but Fresno doesn't respond as quickly," campaign spokeswoman Andrea Jones Rivera said in an e-mail.

The comments attributed to former California Secretary of State Bill Jones were less on target.
And former California Secretary of State Bill Jones said that Detroit and Fresno are in similar situations where they are overly dependent on one industry -- in Detroit, the automobile industry, and in Fresno, agriculture -- that has been hit hard.

Jones is correct that Fresno needs to diversify its economy to reduce dependance on agriculture, but the woes of the Fresno and Central Valley economy have much more to do with the housing collapse and construction industry than agriculture.

Which raises my final point, alluded to in the title. What about Stockton and Modesto? Unemployment in these cities is even higher than Fresno, when historically it has actually been lower. What is Meg Whitman's answer for the Northern San Joaquin Valley (and Sacramento and the Sacramento Valley) which was hit earlier and arguably harder by the recession.

While most of the outrage about her comment is calling Fresno awful, I am left wondering why she answers every question and comment about the Central Valley in the context of Fresno. I am interested in how Meg Whitman has balance her time and concern in the Valley between Stockton and Fresno. For example, how many trips has she made to Stockton compared to Fresno? I would be interested to see the numbers, maybe the Record should call the campaign and find out.

Update 9/29: To be fair, I noticed that Whitman said companies should be putting call centers in "Fresno or Stockton" instead of Phoenix in the last night's debate.  While I don't think call centers will be the Valley's savior, I was pleased to her mentioning both Fresno and Stockton, and to her acknowledging that fixing the Valley's economic woes is much more than an agriculture issue (or green jobs).  Perhaps I have been too critical of her.


  1. -Jeff: The "discussions" that occur on the campaign trail are rarely opportunities for teaching and in particular when the subject is regional economics. It is hard to imagine Ms. Whitman or Attorney General Brown engaging the public or the press in how state policy can promote, through infrastructure improvements, logistics and commodity movement investments that will enhance the Valley's economic competitiveness.

    The real lesson from these comments on Fresno and the Valley may be that we need to sell ourselves to our political leaders as something more than a call center haven and a place to grow food. These are industries that can provide jobs for our population which is disproportionately undereducated and underskilled compared to the rest of the state. But higher paying job opportunities in logistics, component parts manufacturing, health related industries, and innovative technologies are just as compatible here in the San Joaquin Valley, and may in fact be what we truely need to diversify and thrive in the coming decades. These industries in the Valley should not be unfathomable to our state leaders.

  2. Victoria,

    That is an excellent comment. Better than my original post.