Monday, March 3, 2014

Eds and Meds

I was looking into the city of Redding, California (don't ask), and the Wikipedia entry has an interesting table listing the city's major employers. Here they are:

1 Shasta County 1,838
2 Mercy Medical Center 1,600
3 City of Redding 773
4 Shasta Regional Medical Center 700
5 Shasta College 650
6 Oakdale Heights 580
7 Wal-Mart 500
8 Blue Shield of California 470
9 Redding Rancheria 310
10 United States Postal Service 300

Note that every single one of them is either 1.) government, 2.) medical, 3.) education, or 4.)Wal-Mart.

Government:
1 Shasta County
3 City of Redding
10 United States Postal Service

Medical:
2 Mercy Medical Center
4 Shasta Regional Medical Center
6 Oakdale Heights (a retirement community)
8 Blue Shield of California

Education:
5 Shasta College (presumably educating people for medical and government jobs)

Wal-Mart:
7 Wal-Mart (i.e. lousy-paying crap jobs)

Redding Rancheria is an Indian Reservation.

According to the article:
In the 1950s the city continued to grow with the expansion of the lumber industry, the building of Whiskeytown and Keswick Dams, and the completion of Interstate 5 in the late 1960s. By 1970, Redding had grown to 16,659 people. In the 1970s, the town of Enterprise on the eastern bank of the Sacramento River was annexed into Redding and the city's acquisition of other county areas ultimately increased the population to around 35,000. A major reason the residents of Enterprise supported this annexation was the prospect of less expensive electricity provided by Redding's municipal utility, which receives power from the dam. However, the 1970s also saw difficult times for the lumber industry as housing construction plummeted during the 1973-75 recession and Unemployment in Shasta County peaked at over 20%. Also, largely unrestricted logging over the previous hundred years eventually led to an increase in environmental regulations to protect both flora and fauna as well as degraded watersheds, rivers, and streams. In part due to these restrictions and also due to the depletion of virgin forest as well as automation in remaining mills, employment levels in the forest products industry would never again see the levels of the post-war timber boom. The city of Redding, as well as much of forested (primarily rural) Northern California, began a slow, painful transition to a service-based economy. The majority of the once plentiful blue-collar jobs, typical in the timber industry economy for decades, were permanently lost. 
In recent decades an influx of retirees from the San Francisco Bay Area and Los Angeles seeking lower cost housing and a slower pace of life has caused a shift in the city's economic base toward the service sectors of medical, legal, retail and tourism. A lot of lower income families from larger cities, hoping for a chance at a better quality of life, have as a result, followed. However, the unemployment rate is consistently well above the state average: as of 2011 it stood at 14%. With few industrial jobs, lack of available resources, and the lack of a major university within reasonable commute times, wages tend to be low and job availability tends to be limited.
Of course, this is just one city, but it is a real testament to what the American economy actually has become. Eds and meds (and government). This doesn't exactly inspire me with confidence. But what can be done about it?

1 comment:

  1. In Kurt Vonnegut's Player Piano the last dominoes standing among the occupations were engineers and managers. The big picture of a future that doesn't need most of us was spot-on, but pretty far off the mark as to which of us. The last domino standing is health care. Education might be on the current lists of largest employers, but it is not a growth field. The health care domino will probably fall eventually. At some point people will decide that some form of "death panels" are a lesser evil than 50, 60, 70 percent of GDP being sucked into the black hole known as health care.

    Arnold Kling calls education and health care "the commanding heights." I think that's just a right wing think tank strategy to demonize the few sectors that haven't yet completely Walmartized their human resources model. It trickles down to retail politics under the names "government unions" and "government pensions." I find more credible William Baumol's "cost disease" theory.

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