America's Worst Job Market: El Centro, California
Rob Silverblatt

 

What 27.6% Unemployment Looks Like: This metro area has the country's highest unemployment rate

El Centro, Calif., is the largest U.S. city to be situated entirely below sea level. At the moment, it's also home to the country's most underwater job market. Nationally, the unemployment rate sits at 9.5 percent. But in the El Centro metropolitan area, it's a staggering 27.6 percent. And as workers across the country struggle to navigate the anemic labor market, El Centro has emerged as a case study about just how fragile the economic recovery can be.

In recent years, California's multi-billion dollar budget shortfall and its painful cutbacks have been one of the most telling examples of the bleak fiscal outlook on the state and local levels. But even by California standards, El Centro's situation is unusually dire. Since the recession hit, the area's housing market has fallen apart, its wages have remained dismal, and its unemployment rate has soared.

Amit Singh, director of operations at the worker-placement firm Labor Finders International, saw firsthand how the recession savaged El Centro's economy. Labor Finders used to have an office in El Centro, but the company was forced to close down earlier this year. "Unfortunately, the economy there was hit hard, and it just wasn't supporting our business. We tried there for many years to find better avenues, but the opportunities were just not there," says Singh. "We just didn't find that there were any future growth opportunities. Actually, the picture looks pretty grim."

Located within Imperial County and just miles away from the Mexican border, the El Centro metropolitan area is home to upwards of 150,000 people. Among them is Cheryl Viegas-Walker, a banker who also serves as the city's mayor. In El Centro, the position of mayor rotates between the members of the city council. Viegas-Walker has sat on the council for 13 years and is currently serving her third term as mayor.

Viegas-Walker attributes the city's sky-high unemployment rate to its agricultural economy. Laborers in El Centro grow and harvest broccoli, lettuce, wheat, and just about everything in between. All told, agriculture in Imperial County is a billion-dollar-a-year industry. But agricultural work is often temporary by nature, and seasonal job losses take a toll on the city's overall unemployment rate. Meanwhile, competition from workers from nearby Mexico makes agricultural jobs harder to come by

Nationally, 128 metropolitan areas have joblessness rates of more than 10 percent, according to the Bureau of Labor Statistics. By and large, that list is packed with rural areas like El Centro. Nearby Yuma, Ariz., has the country's second-highest unemployment rate, and it shares many characteristics with El Centro. "I think that what there needs to be is an appreciation and an understanding of the huge impact of having an agriculture-based economy," says Viegas-Walker.

In El Centro, unemployment has always been a concern. Notably, in the past decade, the area's joblessness rate has never dropped below 12 percent. But when the economy soured during the recession, El Centro's unemployment rate surged, rising from 15.3 percent at the beginning of 2007 to 31.3 percent by the middle of last year as the housing market crumbled.

"We had a large construction boom going on," says Sam Couchman, director of workforce development and veteran services for Imperial County. "So those construction workers being unemployed when the construction boom ended and everything kind of came to a standstill -- that's why you continue to have a high unemployment rate."

Singh remembers watching the process unfold as contractors finished planned construction and then abandoned Imperial County. "When they were done and those communities were done, then they kind of went away," he says. "They had overbuilt; they weren't selling the homes that they had, so why would they build more?"

But it's not just housing. The retail and manufacturing sectors also got squeezed, applying further pressure to an already struggling economy. Currently, the government is one of the few reliable employers left. Imperial County has two state prisons, and a number of El Centro residents work there, as well as in Homeland Security and border patrol jobs. "All of those jobs have been very secure," says Viegas-Walker. "And in fact they've been adding people as opposed to laying people off."

Another potential bright spot is the hope that El Centro will be able to expand its renewable-energy industry. Already, El Centro residents are awaiting the planned arrival of the company Tessera Solar. The company hopes to secure permits this year for an Imperial County branch. If all goes as planned, Tessera could be a major employer for El Centro residents.

Cecilia Garcia, an adult development specialist at Imperial Valley College, says El Centro workers have already begun accepting renewable-energy internships with Tessera in Arizona in hopes of positioning themselves for eventual employment at the new location. "When the company [comes], they're going to be prepared so they can be hired," she says.

The way Couchman sees it, El Centro is currently in the middle of a waiting game -- just like much of the rest of the country. "We see a little bit of recovery on the horizon," he says. "It's happening very slowly, [but] as the country recovers, we will recover."

 

 

America's Worst Job Market: El Centro, California

 

(c) 2010 U.S. News & World Report