North Drifts Toward Income Polarization

REDDING, Calif. —  While the rest of California is wringing its hands over 7% unemployment and an unaccustomed hiatus in its century-old real estate boom, the huge and gorgeous region known to some as Superior California struggles with vastly harsher economic conditions uncushioned by years of prior growth.

Unemployment in much of this area exceeds 20%, and the logging business, a keystone of the local economy, is only now coming around from what seemed like a coma. Environmental rulings have limited access to trees, and the construction slump has dampened demand for lumber.

“I’ve worked for three different sawmills in the past year and a half,” says Paul Gardiner, waiting his turn at the unemployment office in Oroville. “They all closed.”

Nature, in the form of a prolonged drought and a bad recent freeze, has conspired to suppress agricultural employment as well.

Government services are stressed: Unemployment offices have been swamped, and Butte County nearly went bankrupt. Thinly populated Colusa County has the worst unemployment--about 24%--in the state. Yuba County had the state’s highest percentage of welfare recipients at the start of 1990, the latest figures available.

Things would be much worse if not for the equity refugees who have arrived in droves in recent years, cashing in their gains on homes in Los Angeles and Orange counties and the Bay Area and retiring to the bucolic lifestyle and cheap housing available in places such as Redding, ringed in alpine splendor by the snowy Trinity and Cascade mountain ranges.

Virginia Bickers and her husband did just that, moving to Redding from the San Francisco area in 1983. Bickers now has a successful second career selling amply comfortable $100,000 homes to people just like herself.

The odd result is simultaneous growth and persistently high unemployment, aggravated by the recession. Like the rest of California, most of these northern counties gained population in the 1980s.

Ironically, newcomers such as Bickers and the decline of wood-related businesses threaten to transform the region into a rigidly two-tiered economy, with affluent retirees, physicians and attorneys at one end and retail clerks at the other.

Logging and lumber mills are dangerous, but timber-related work pays $10 or $12 an hour. The new jobs in retailing, fast food and so forth pay about half as well.

Rich Camillieri, manager of the Redding unemployment office, says unemployment in Shasta County was 13.3% in January, compared to 10.1% a year earlier. In the past decade, he says, lumber-related employment has fallen at least 50%, to perhaps 5,000 or 6,000.

Some of that change is already visible here in Redding, which is a budding health-care and retailing center. New medical offices and shops cater to new arrivals with money.

But not far from the Redding Medical Center, the state-operated Employment Development Center tries to retrain displaced loggers. Also nearby is the state unemployment office, optimistically called the California Economic Development Department, which not long ago was deluged by claims.

The newcomers are a mixed blessing. John Sanzone, director of the Cal State Chico Center for Economic Development and Planning, says affluent former urbanites bring in money, but they also inflate property values and vote conservatively. Dedicated to the rural flavor of their new communities, many aren’t so keen on growth, either.

“We import all of our capital and export all of our natural resources,” Sanzone says.

Cash-rich city dwellers aren’t the only newcomers. Like many of the cheaper inland counties, Shasta County and its neighbors have also seen an influx of welfare recipients, who get the same $694 a month (for a family of three) as they would in, say, San Francisco. The result is that Shasta County, for example, has half again as many welfare clients per capita as Los Angeles County.

Camillieri notes that, with food stamps, MediCal and other benefits, it doesn’t pay to give up welfare for less than $6.50 an hour. “We don’t have that many jobs that pay at that level,” he says.

Since raising taxes is virtually impossible under Proposition 13, Shasta County, with a $126-million budget, is facing a shortfall of $16 million next year.

Sanzone says the 12-county northeast California region he studies, with its emphasis on natural resources, is simply behind the times. The world economy has changed. California’s growth has been and will continue to be knowledge-based.

Not everybody is bothered by this. Those who can make a living with a personal computer, a modem and a fax machine often find such places much to their liking. After the recent rains, the fields of Butte County are green as the Irish countryside, and the nut and fruit orchards are carpeted with yellow wildflowers, the trees covered with blossoms. Trinity County is so unspoiled, it doesn’t even have a traffic light.

In Chico, surrounded by magnificent countryside, there are nice shops and restaurants. You can get good books and fine wine, and houses are still cheap.

“If you have a Visa card, it’s paradise,” Sanzone says. “If you don’t, it’s a real drag.”