Campus: CSU, Stanislaus -- July 17, 2000

Growing Divergence from Other Counties in the State and Valley Find Merced County Facing Tough Challenges

Report from Center for Public Policy Studies at California State University, Stanislaus Offers Recommendations for Meeting the Challenges

Merced County has the youngest population in the state, and one of the youngest in the nation. And it will continue to be younger in the future since it is aging more slowly than the rest of the region, state, and nation, according to a report prepared for the Merced County Board of Supervisors by the Center for Public Policy Studies at California State University, Stanislaus. Compared to all counties in the state, Merced ranked first in terms of the proportions of the total population under the ages of five (10.3%) and 15 (31%) in 1998.

Merced County has become one of the most racially and ethnically diverse counties in the state and has been diversifying at a faster rate than the state as a whole. In Strategic Choices: Creating Opportunity in Merced County, the Policy Center's research team identifies the principal sources of increasing diversity as growth in the Hispanic and Asian/Pacific Islander populations. These groups comprised 46.1% of the resident population in 1998, up from 20% in 1970. Department of Finance projections put the Hispanic and Asian/Pacific Islander populations at over 60% of the County's total by the year 2020.

The CSU Stanislaus Center compiled a similar report for the Stanislaus County Board of Supervisors in 1998 titled Critical Links. It took the Center's team a year to complete the report, compiling detailed statistics on Merced County's economy, the seventh most productive agricultural county in the country. The document is expected to help county leaders and businesses in their decision-making processes and includes a number of recommendations, with a heavy emphasis on improving education opportunities for Merced's booming younger population.

The upgrading of skills is a key challenge in Merced County. Surveys of employers and community focus groups highlight concerns about the skills of the County's workforce. Employers, for example, are much more likely to consider general and technical skill levels to be "adequate" than "good."

Raising educational attainment and performance levels is another challenge. Relatively low percentages of high school students take the Scholastic Aptitude Test (SAT), an important entrance requirement for many colleges and universities. In 1999, for instance, while almost 36.5% of high school students statewide took the SAT, only 21% did so in Merced. For the state as a whole, 51.5% of the test-takers scored above 1000; in Merced County it was 39.5%.

Income trends reveal that Merced, Fresno, and Madera Counties have lagged San Joaquin, Stanislaus, and Santa Clara Counties in personal income growth. In contrast, transfer payments and poverty rates have been higher in these counties.

According to Kenneth Entin, the Center's senior researcher and lead investigator for the study, "the trend data reveal that there is increasing divergence not only between San Joaquin Valley counties and coastal areas but within the Valley as well. Merced County is lagging in a region that is trailing the rest of the state. In this regard, it shares more in common with Fresno and Madera Counties than it does with San Joaquin and Stanislaus Counties."

Strategic Choices is the most comprehensive report ever produced about Merced County and provides a wealth of information about demographic, economic, and social trends. The report also offers an array of policy ideas and options for meeting the challenges facing Merced County. The report characterizes these recommendations as avenues to opportunity that are designed to add value to on-going efforts to enhance the County's human capital, job creation, and community building potential.

Successfully navigating the avenues of opportunity will require public actions and partnerships between private and public sector leaders that connect workforce preparation to economic development goals. It also will involve the leveraging of local assets, including the UC Merced campus, Merced College, and the Castle Airport Aviation and Development Center.

The report concludes that the new UC Merced campus will foster a climate of opportunity that can lead to increased access to higher education in the San Joaquin Valley and more economic development options in Merced County. However, the campus is unlikely to fundamentally change underlying demographic and economic trends in the foreseeable future.

Merced College will continue to serve a greater number of high school students in Merced County than other institutions of higher learning, and its academic and vocational offerings will address the more immediate needs of employers. The opening of the west side campus could be an impetus for economic development.

The Castle Airport Aviation and Development Center has great economic development potential but appears to lack a strategic focus. There is general agreement in Merced County that a strategic plan for the facility would provide this focus.

Since the young and diverse population will play key roles in the County's future, there is a need to pay particular attention to policies and programs that improve the skills of young people and the economic development opportunities available to them. It is also incumbent upon the leadership of the County to it view its youth and diversity as assets in any broad vision and strategy for economic development. "In the emerging global economy," said Policy Center Director and research team member Steve Hughes, "Merced's linguistic and cultural diversity are very important assets and ought to be treated as such."

The strongest economic assets in the County are to be found in its agricultural sector. Agricultural production and food processing, according to economist and research associate Kelvin Jasek-Rysdahl, accounted for 42% of the County's $6.8 billion in total industry output in 1996, the most recent year for which complete data were available. In fact, agriculture and food processing were the only sectors to generate more than $1 billion in output. Poultry processing, frozen fruits, juices and vegetables, dairy farm products, tree nuts, natural and processed cheese, commercial printing, and transportation and public utilities were among the major exporters of goods and services from Merced County.

The bottom line is that Merced must find ways to protect and build upon its agricultural base, which Strategic Choices identifies as the County's economic engine, while simultaneously diversifying the economy. New job creation should be based on the expansion of existing businesses as well as the attraction of new ones. It also should be guided by policies and programs that successfully develop the County's human capital.

Dr. Entin concludes the report on a positive note. "While Merced County faces challenges in the years ahead, it also is clear that the Board of Supervisors and other stakeholders in the public, nonprofit, and private sectors are resolved to make strategic choices that will create opportunity. The timing is right, the opportunities are available, and the assets are in place."

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