Reporting

November 19, 2012 by John Guenther

From Twinkies to Cuties: California economy increasingly divided


Hostess truck in San Francisco and an orange grove near Highway 166. (Photo Credits: Ezra Wolfe and Chuck Abbe via Flickr).

The biggest post-election news story is turning out to be the Hostess bankruptcy drama. Before an agreement on mediation Monday prevented the shutdown of operations, most news stories lead with the death of the Twinkies, or the "Twinkie Apocalypse," even though the brand will most likely survive. The real story is, of course, jobs and manufacturing.

While pundits duked it out over who was to blame for the potential loss of jobs--300 at a Hostess plant in Sacramento alone--California might be missing the real story also: a widening economic fault splitting the state in two.

Just like during the election, news outlets followed the Hostess story from all angles, including how long the shelf life of a Twinkie really is and whether or not a hipster beer company would buy up the bankrupt bakery.

And while news and junk-food junkies watched that drama unfold, a California fruit company cut the ribbon on a new 64,000 sq ft facility where 500 new workers will be hired to pack Cuties brand oranges. 

These new jobs demonstrate that agriculture really is a bright spot for the California economy and will be beneficial for the local economy there. 

But, according to the Bureau of Labor Statistics, agricultural graders and sorters make an average hourly salary of $10.18 and annual of $21,180. Hostess drivers and bakers make $20 and $16 an hour, respectively.

Again, focusing on the pure numbers and arguing over unions and the labor dispute is also missing the bigger story.

Losing manufacturing jobs and gaining low-skill, low paying jobs might just be one example of some issues bigger than loss of Twinkies (which is a lot for some people, we are aware). California is increasingly split economically: coast vs. inland economies and income groups.

At the Milken Institute Summit on California last week, Lt. Gov. Gavin Newsom hit on this issue, saying California lives in two worlds--coastal and inland--and that we have to bring the two together to move forward. The recovery has been vastly different for different regions. The Bay Area economy is red hot while Sacramento actually lost jobs in the state jobs report for October.

The problem reaches into the world of real estate, as shown by a report released on Friday from the UCLA Anderson school (hat tip to the Debord Report at KPCC). Again, demand and prices for real estate in the Bay Area and Los Angeles has shot up while the Inland Empire has seen little recovery:

"So looking behind the aggregate statistics that combine very different market data, one finds a mixed picture. California housing markets are both recovering and that recovery should accelerate, and they are still in the doldrums at the same time."

Dan Walters at the Sacramento Bee also picked up the theme, mentioning a report showing California ranks high in a new poverty measurement. It showed "that California has the third largest 'income inequality' between those in the highest and lowest levels, and the second largest between those in the highest and middle quintiles."

The columnist summed up the problem as stemming from an economy that lost its industrial base, state policies that didn't keep up, a workforce unprepared for the new reality and an education system that hasn't been getting its job done, either.

Facing these daunting issues, how in the world could we "bring the two together" as Newsom said? Well, as Confucius supposedly said, "the man who moves a mountain begins by carrying away small stones."

Starting somewhere, we can encourage efforts to match California's industry needs with career education programs. High-skill jobs are available, but it will take partnerships like the C6 Consotium in the Central Valley to get them filled with qualified workers.

Then, California must move beyond focusing on the "Twinkie" stories and work to create a comprehensive economic competitiveness strategy.

Because whether we're making Twinkies or Cuties, the real economic story is always about jobs, jobs, jobs.

Categories: Agriculture, Jobs, Workforce

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