First in a series
By TOM HONIG
Santa Cruz has a very strange economy.
Those of us who live here are used to the vagaries of life in Santa Cruz -- high housing costs and low wages. Dramatic natural beauty and congested roads that would make a Southern Californian cringe. And here's another one: a small town atmosphere in a downtown that has some big-city social issues.
Most of us notice these contradictions, but sometimes it's nice to have someone from the outside give us some perspective.
The Santa Cruz Business Council featured a speaker last week by the name of Jeffrey Michael, an economist from University of the Pacific. Details of his talk are right here in a Sentinel story by business writer Jondi Gumz.
He portrayed a strange local economy: a total of $13 billion in personal income, but only $4.2 billion coming from local wages. (In fact, he said in most places, local wages are a major factor in the economy. Not here.)
What that means is that Santa Cruzans make their money either by commuting (that's the young people) or by investment income (older people.) The political implications are profound, and explain why there's a deepening divide in the political dialogue locally. Older, wealthier folks are happy in their living situation, and don't really care that much about jobs or growing a healthy local economy. Younger, more struggling people in their early working years would love not to commute over the hill; they'd rather do what the older folks do -- stay here.
Essentially, the economy boils down to this: Santa Cruz is a bedroom community of San Jose. People may not like to admit that, but it's true.
(NEXT: The implications of our contradictions.)