The average worker in the central San Joaquin Valley earned 3 to 20 percent less in wages in 2015 than the nationwide average, with an even sharper lag of 15 to 30 percent less than the average within California.
The gap between pay in the Valley compared with the state and nation was reflected in the latest survey of occupational wages to be released by the U.S. Bureau of Labor Statistics for metropolitan areas across the country. The May 2015 survey details average hourly and annual wages for more than 800 distinct occupations in the labor force across 22 broad occupational categories.
A Fresno Bee analysis of the salary data shows that the average hourly pay for all 340,660 workers in Fresno County – listed as the “Fresno metropolitan statistical area” by the federal agency – was $21.08, with an average annual salary of $43,840. That’s 9 percent lower than the national average hourly or annual pay, and 21 percent less than the average in California.
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What’s telling about the region is that more than 148,000 workers in Fresno County – almost 44 percent of the workforce – toil in occupations where the average hourly wage was less than $15 per hour. Those tend to be jobs that don’t typically require a high school education. That includes more than 23,000 farm, nursery and greenhouse workers whose average wage was just a few pennies above the current California minimum wage of $10 per hour, according to the federal figures.
Similarly, the average salary for the more than 28,000 workers in food preparation and food service occupations in Fresno County was $11.61 per hour – a little lower than the statewide average of $12.23, a little more than the national average of $10.98.
“In any economy, whether it’s national, state or local, education has value,” said Blake Konczal, executive director of the Fresno Regional Workforce Development Board, which provides job training and placement services in Fresno County. “To the extent that we have more residents who have achieved a lesser level of education on average than other parts of the state or country, it’s anticipated that’s what this type of analysis would show.”
The U.S. Census Bureau’s 2014 American Community Survey estimated that more than one-quarter of Fresno County’s population ages 25 and older – 26.8 percent – do not have a high school diploma. That’s a higher proportion than those who have at least a four-year college degree (19.5 percent).
By contrast, about 15,000 people work in jobs that paid over $100,000 per year, or about $48 per hour, in Fresno County in 2015.
“It turns out the stuff your mom told you was right: It does pay to stay in school, to get your high school diploma, a college degree, or vocational training in a marketable skill,” Konczal added. “If we want to increase the wages here in the Valley, we have to increase the education attainment level.”
It turns out the stuff your mom told you was right: It does pay to stay in school, to get your high school diploma, a college degree, or vocational training in a marketable skill.
Blake Konczal, Fresno Regional Workforce Development Board executive director
But low-skill jobs aren’t the only occupations where the region faces a pay gap. At some higher skill levels, the differences in pay can be striking.
In management-type jobs and jobs in business and financial operations – both occupational categories that pay well above average and together encompass more than 28,000 workers – the Fresno County average salaries were 22 percent lower than the state average. For management occupations, including chief executives, general managers, production managers, educational administrators and food service managers, the average hourly wage was $47.41. That’s significantly less than the state average of $61.02, and it’s 14 percent below the U.S. average of $55.30.
Among business and financial jobs, which covers buyers and purchasing agents, claims adjusters, human resource and labor relations specialists, and accountants and auditors, the average pay in Fresno County was $30.67 per hour, compared with $39.40 statewide and $35.48 nationally.
Better than average
There are a few local bright spots, however. The broad category of education/training/library occupations, from preschool through college, is the only one in which Fresno County outperformed both the state and national average salaries. The overall average annual salary within those occupations amounted to almost $61,000, compared with about $59,440 in California and $53,000 across the country.
And within some job occupations that require the highest levels of education, the Fresno region was well ahead of state and national averages. Physicians and surgeons within the county, for instance, had an estimated average annual salary of $255,820 – the highest pay of all occupations in the county. That was 25 percent more than the statewide average of $203,920, and almost 30 percent higher than the U.S. average of about $198,000.
“The higher you go in the skill level, the higher the pay,” said Mike Dozier, executive director of the Office of Community and Economic Development at Fresno State. Among medical professionals, “I would bet those are higher than the state or national averages (because) it’s really a supply and demand issue.”
The Fresno area, Dozier said, has a higher patient-to-doctor ratio than the state as a whole. “People in hospitals often talk about the difficulty of getting physicians to come to the area, so they have to pay more money to get them to come here.”
Dozier added that the region’s higher proportion of low-wage jobs is tied directly to lower educational attainment and the resulting lack of skilled labor.
“A lot of it has to do with operations and the cost of doing business,” Dozier said. “A lot of the lower-end jobs are with companies or businesses that work on the margin within the areas where they are located, and it always comes back to supply and demand. … There is so much supply of unskilled labor in this area, (those businesses) can afford to be competitive.”
The gap here is the amount of skilled labor we have to go into those jobs that pay more.
Mike Dozier, executive director, Fresno State’s Office of Community and Economic Development
“But the lower the skill levels, the lower the educational attainment necessary for that skill, the worse we’re going to stack up against the state and federal averages,” Dozier added. “The gap here is the amount of skilled labor we have to go into those jobs that pay more.”
Konczal and Dozier both attended a meeting of manufacturing businesses in Fresno this week, “and local manufacturers were bemoaning the fact that they cannot find enough qualified workers like machinists and welders,” Konczal said.
The combination of low education and skill levels and the plethora of low-wage jobs creates a dual-pronged urgency for economic development professionals in the region: attracting employers who can provide better-paying jobs, and increasing the educational attainment of the workforce to meet the needs of those employers. But there’s a dilemma because the region faces what Konczal describes as a “chicken-and-egg” situation to determine which aspect to resolve first.
Konczal praised the quality of local high schools and colleges, including California State University, Fresno, and Fresno Pacific University, “and they are producing wonderfully qualified and well-educated graduates,” he said. “But we do not have the diversity of economic sectors to adequately employ all of the well-educated people that these institutions are producing.” That, he added, creates a situation where young professionals migrate to other areas to start their careers even if they may wish to stay in Fresno.
“To the extent that we address the first issue (of educational attainment), we can increase the value of our human capital, and make it possible to attract more and better industrial sectors and help the businesses already here to expand and employ more local residents,” Konczal said.
Location is a factor
Across all occupations in the survey, Kings County had the highest average hourly salary among Valley counties at $22.53. Neighboring Tulare County had the lowest average wage at $18.72.
The data in the federal survey predates California’s approval earlier this year of a new law that increased the state’s minimum wage from $9 per hour to $10 as of Jan. 1. That will increase to $10.50 per hour at the beginning of 2017 and rise incrementally until it reaches $15 per hour on Jan. 1, 2022.
But the effects of the minimum wage law tend to vary from region to region within the state.
“In the Bay Area, $15 (per hour) is barely sustainable,” said Dozier. “Here (in the Valley), that’s more than a lot of places pay. It bootstraps or hurts smaller businesses that rely on the less-skilled employee.”
$9.592015 average wage for baggage porters and bellhops, the lowest hourly wage in Fresno County
$122.99Average wage for physicians and surgeons, the highest hourly equivalent wage in Fresno County
Still, Dozier said, raising education and skill levels of local residents is important to the region’s economy.
“Our college attainment rate is low, and whenever you have something like that, the economy in the region is affected by that,” he said. “It’s not that everybody has to get a college education, but it’s an indicator of the economic health of a particular region.”
In the Silicon Valley south of San Francisco, Dozier said, about 47 to 48 percent of the population has a bachelor’s degree or higher. “And that includes about 21 percent with at least a master’s degree, which is more than what we have for all college attainment,” Dozier said. “Anywhere you look that has a robust economy, you see higher educational attainment.”
Konczal said that while some people tout Fresno County’s and the Valley’s lower wages and lower cost of living as drawing cards to attract businesses to the region, “that’s really a double-edged sword.”
“Using the low cost of living and low wages (to attract companies) can prove successful in the short run,” he said. “But the problem is that there will always be someplace cheaper. … It’s far better to market our assets, and of the primary assets that all employers look for – whether in an up economy or a down economy – finding good employees is always in the top three.”
“It’s a national problem, and it’s exacerbated here,” Konczal added. “But you could say that a bigger problem means it’s a greater opportunity, too.”
Such opportunities don’t necessarily require a college degree, Dozier said. Efforts are underway up and down the Valley to create more educational options for residents, from associate degrees and certificates in career technical education to bachelor’s, master’s and doctorate degrees. “The more people you have trained and educated, the higher wages you’re going to attract,” he said.
“What we need to do in this area more than anything else is emphasize education, not just for the sake of education but for the sake of employment, getting educated in the career fields where you can get a higher-paying job.”
Occupational wage comparisons
How the average hourly wage for broad occupational categories in Valley counties compares to the statewide average in California as well as the average across the country.
Fresno Co. mean hourly
Kings Co. mean hourly
Madera Co. mean hourly
Tulare Co. mean hourly
California mean hourly
National mean hourly
Business and Financial Operations Occupations
Computer and Mathematical Occupations
Architecture and Engineering Occupations
Life, Physical and Social Science Occupations
Community and Social Service Occupations
Education, Training and Library Occupations
Arts, Design, Entertainment, Sports and Media Occupations
Healthcare Practitioners and Technical Occupations
Healthcare Support Occupations
Protective Service Occupations
Food Preparation and Serving Related Occupations
Building and Grounds Cleaning and Maintenance Occupations
Personal Care and Service Occupations
Sales and Related Occupations
Office and Administrative Support Occupations
Farming, Fishing and Forestry Occupations
Construction and Extraction Occupations
Installation, Maintenance and Repair Occupations
Transportation and Material Moving Occupations
Source: U.S. Bureau of Labor Statistics, May 2015 Occupational Employment Statistics survey