BAKERSFIELD, Calif. — This mid-size city has become the surprise star of California’s Central Valley.
The state’s economic recovery has largely been concentrated on the coast, leaving behind much of the hard-hit San Joaquin Valley. But Bakersfield, perhaps best known for oil, agriculture and country music, has reclaimed an old title: boomtown.
Bakersfield has been adding population and jobs at a brisk pace and is a few thousand jobs from matching its peak employment level five years ago. A price-fueled energy bonanza, low corporate operating costs and an advantageous location are contributing to the area’s good fortune.
Employment has grown across many sectors, including manufacturing. Even construction, which suffered mightily statewide during the housing bust, has strengthened. And unlike many struggling municipalities, in Kern County officials have recommended a budget increase that would allow the hiring of more than 150 people.
Signs of growth are obvious.
San Joaquin Community Hospital, in downtown Bakersfield, is building a four-story cancer treatment center. Just south of town, equipment giant Caterpillar Inc. is finishing a distribution center. Roads and highways are getting face-lifts. And several corporations have moved operations to the area.
These and other projects have given Bakersfield something to boast about. It leads the country in year-over-year construction employment growth, with payrolls swelling by almost 23 percent since July 2011. By comparison, state construction employment grew 5 percent.
For employers like the Griffith Co., a general contractor, construction volume is up 20 percent from the year before for its Bakersfield branch; it expects to do more hiring when more projects get off the ground.
“It’s very exciting,” said Luke Walker, Griffith’s assistant regional manager. “We’re getting close to where we were right before the recession happened.”
According to state employment data, Kern County is just 5,600 jobs from matching its peak employment of 239,600 reached in September 2007, when developers were tossing up houses and condos at an unsustainable pace. And the big gainer is Bakersfield, the county seat and its largest city by far.
The area, which has large petroleum deposits, is benefiting from a surge in energy prices. That has led to more drilling for oil and natural gas and boosted other energy projects, which means more hiring.
“We have work in the oil fields,” said Danny Kane, business manager for the International Brotherhood of Electrical Workers, Local 428, based in downtown Bakersfield. “We have a lot of solar work. We have wind. We are just fortunate to have those opportunities in Kern County.”
Despite the gains in some sectors, the economy in the area hasn’t fully recovered.
The unemployment rate remains high at 13.6 percent in July, but it has dropped 4.2 percentage points since its peak of 17.8 percent in March 2010. And there are still about 52,000 unemployed people in Kern County, according to data from the state’s Employment Development Department.
Economists, however, note that even during good times, Kern County has had an elevated unemployment rate compared with the state as a whole because of its large agriculture industry and its seasonal hiring pattern. During Bakersfield’s peak employment five years ago, for instance, the unemployment rate was 7.2 percent; the state’s jobless rate was 5.6 percent at the time.
Although employment has recovered recently, population has been exploding for a decade as people have sought cheap housing and work opportunities.
From 2000 to 2010, the county’s population grew to 839,000 — a nearly 27 percent jump compared with 10 percent statewide, according to U.S. Census Bureau data. The city boasted nearly 350,000 Bakersfieldians in 2010, more than 101,000 additional residents than in 2000, a 41 percent increase.
“We’re growing faster than we create jobs,” said Melinda Brown, director of business development for the Kern County Economic Development Corp.
But the recent employment growth is a signal that the area has gotten past “all the layoffs, and people are hiring here and there,” she said.
In addition to companies expanding, county planners have aggressively courted others who looked to cut costs during the recession, Brown said.
In the last year, several companies have decided to move operations to Bakersfield, attracted by cheaper office space and land and fast approval of business licenses. The city’s location is also a selling point; it’s just two hours north of the ports of Los Angeles and Long Beach, attractive to companies with West Coast operations.
Caterpillar last year bought 46 acres of land and has nearly completed a 400,000-square-foot distribution center at the Tejon Ranch Commerce Center near the junction of Interstate 5 and state Highway 99. This follows the opening of a Dollar General distribution hub earlier this year. The industrial center houses hubs for Target, Ikea and Famous Footwear.
The Tejon Ranch Co., a publicly traded company, also recently announced plans to open an outlet center in 2014 with the Rockefeller Group at the intersection of the two highways, near its commerce center.
But despite these gains, county economic planners say Bakersfield is still hindered by a variety of weaknesses.
Among them, they say, many outsiders view the city as little more than a dusty industrial and agricultural town near an interstate.
“Bakersfield’s perception is tough to overcome,” Kern County’s Brown said. “It’s a challenge in bringing companies here.”
But even more problematic for future growth is the poorly educated workforce. Only 9.8 percent of Kern County’s population has a bachelor’s degree, according to census data, which means high-paying jobs in engineering are hard to fill and tend to go to workers who relocate from out of state.
“Bakersfield is still a Central Valley economy,” said Eduardo Martinez, a Moody’s Analytics economist, noting that the large agriculture industry means much of the labor force is migrant workers, low-skilled and uneducated.
And the county’s reliance on oil makes it vulnerable to drops in energy prices, Martinez said. “There’s a high dependence on agriculture and mining, and that’s positive during boom years, but not so much if there’s a crash.”
To that end, employers are investing in worker training, said Richard Chapman, president of the Kern County Economic Development Corp. Other programs sponsored by Chapman’s group, such as the Alliance of Women in Energy, pair local high school students with working professionals who mentor them for careers in science and engineering.
Developing residents’ skills, Chapman said, is a priority to ensure future employment growth is more widespread and includes well-paying jobs for area residents.
“The only thing that can stop us,” Chapman said, “is the availability of the workforce.”