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Many signs point to a Bakersfield boom

Unlike much of the state, Bakersfield is adding residents and jobs while attracting companies. But the economy has not fully recovered, and the city is hindered by a variety of weaknesses.

September 09, 2012|By Ricardo Lopez
  • In one of many signs of Bakersfield's growth, San Joaquin Community Hospital downtown is building a four-story cancer treatment center.
In one of many signs of Bakersfield's growth, San Joaquin Community… (Kirk McKoy, Los Angeles…)

BAKERSFIELD — This mid-size city has become the surprise star of the 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 of 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 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% since July 2011. By comparison, state construction employment grew by 5%.

For employers like Griffith Co., a general contractor, construction volume is up 20% 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% in July, but it has dropped 4.2 percentage points since its peak of 17.8% 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 the seasonal hiring pattern of its large agriculture industry. During Bakersfield's employment peak five years ago, for instance, the unemployment rate was 7.2%, compared with 5.6% for the state as a whole.

Although employment has recovered recently, population has been exploding for a decade as people have sought work opportunities and cheap housing.

From 2000 to 2010, the county's population grew to 839,000, a jump of almost 27%, compared with 10% statewide, according to U.S. Census Bureau data. The city boasted nearly 350,000 Bakersfieldians in 2010, about 101,000 more than in 2000, a 41% 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.

The area's population growth is the main reason San Joaquin Community Hospital is building a 60,000-square-foot cancer center, said Jarrod McNaughton, vice president of marketing and business development. The region has lacked a major hospital-based cancer clinic, and many residents travel to Los Angeles for treatment.

The project, which has created almost 100 construction jobs, is expected to be completed this year. The hospital, with about 2,100 employees, has plans for about 80 new positions in the treatment center, McNaughton said.

"We're hiring well-paying jobs into an economy that has been pretty sluggish," he said. "We're tying to do our part to meet demand and help the economy here."

The hospital has bought nearby property and will demolish buildings to make way for future growth, McNaughton said.

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