Driving through Newport Beach in Orange County. Communities along the coast have largely rebounded from the recession.
SAN BERNARDINO, Calif. — For decades, California has been seen nationally and by its own residents as a state divided into north and south, urbane tree-huggers versus car-obsessed beach hoppers. But the more meaningful division, it turns out, may be between east and west.
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Along the highway in the city of Moreno Valley in Riverside County, where the economy remains depressed.
Communities all along the state’s coastline have largely bounced back from the recession, some even prospering with high-tech and export businesses growing and tourism coming back. At the same time, communities from just an hour’s drive inland and stretching all the way to the Nevada and Arizona borders struggle with stubbornly high unemployment and a persistent housing crisis. And the same pattern holds the length of the state, from Oregon to the Mexican frontier.
“This is really a tale of two economies,” said Stephen Levy, the director of the Center for Continuing Study of the California Economy. “The coastal areas are either booming or at least doing well, and the areas that were devastated still have a long way to go. The places that existed just for housing are not going to come back anytime soon.”
Nick DePasquale, who runs a Ford dealership here, can see it clearly. When he looks at the sales figures for dealerships less than 100 miles away, Mr. DePasquale sees signs of hope. Sales are up, if not drastically, at least enough to show that more people there are trading in their aging vehicles for spiffier models.
But when he glances at his own bottom line, the reality is grim. Less than five years ago, he was selling 300 cars a month. These days, the number rarely budges above 75. Even if customers come in looking to buy, few of them are able to get a loan approved, if their credit is pockmarked with defaults and foreclosures. “We’re trying to climb out of the depths, but we were about the first in this mess and it looks like we will be the last ones out,” Mr. DePasquale said. “There aren’t enough people feeling good enough to buy a new car around here.”
Asked if he could imagine anything changing soon, he let out a little chuckle and said, “The hottest-selling thing in this city is a $5,000 used car, and we don’t have a lot of those on this lot.”
San Bernardino County, which with Riverside County makes up the Inland Empire, a sprawling area now scattered with vacant homes built in the last decade, posted an unemployment rate of 12.6 percent in March. Compared with Orange County, on the more prosperous, western side of California’s vertical divide with an unemployment rate of 8 percent, it can feel like another world.
The disparities have played out in all kinds of ways. The Inland Empire and the San Joaquin Valley, in the center of the state, have some of the highest rates of poverty in the country. El Centro, on the state’s southeast edge, has the highest unemployment rate for any metropolitan area in the country, nearly 27 percent. Stockton, 550 miles to the north and also on the eastern side of the divide, became the first city to test the state’s new process for possible bankruptcy.
At the same time, the gap between the per capita income in the San Francisco Bay Area compared with the Inland Empire grew to more than $40,000; it was $26,000 four decades ago. While suburbs in the eastern parts of the state were some of the fastest-growing areas in the nation in the last decade, that growth has slowed to a near halt.
Investors are moving in to snap up foreclosed homes selling for a quarter of what they once did, but a housing glut remains. And the psychological toll in the area is almost palpable: While people here read about an upswing in other parts of the state and country, they look around their blocks and see friends out of work, shuttered stores and vacant lots. In January, Forbes magazine named Riverside the hardest city in the country in which to find a job.
During the boom times, many middle-class workers who lived along the coast moved east, eager to gobble up affordable housing in exchange for a difficult commute. By some estimates, roughly a third of working adults who live in the Inland Empire worked in neighboring counties along the coast.
“During the first part of the century, when things were booming again, we saw the coastal areas moving inland and there was a lot of discussion about how jobs would follow,” said Hans Johnson, a researcher with the Public Policy Institute of California. “But people were just following the building of roofs, so what you end up with in a bust, areas that were dependent on growth suffer tremendously when it dries up.”
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