Santa Cruz job market struggles amid rising housing cost
Briana Mathaw
SANTA CRUZ, Calif. (KION-TV) – The job market in Santa Cruz County is facing significant challenges as the workforce continues to shrink.
Experts suggest that the decline in employment is not just due to one factor, but rather a combination of issues.
From unaffordable housing to the abundance of low-paying jobs, there are multiple reasons why the local workforce isn’t growing at the pace it needs to.
As of 2024, the unemployment rate in Watsonville sits at 13.6%, while cities like Capitola, Santa Cruz, and Scotts Valley are doing better with rates ranging from 3.1% to 4.3%. Experts say the key reason for these disparities is simple, people can’t afford to live in the area.
Josh Williams, president of BW Research, explains that less than one in four households can afford the median priced house in Santa Cruz County, which contributes significantly to the issue. “So that affordability is a real problem. And again, at the end of the day, costs always go up,” he said.
The population in Santa Cruz County has dropped by 1.1% since 2021, and while job numbers have slightly increased, the majority of those jobs remain low-paying.
“You’re also seeing that, you know, your primary working-age population, you know, moving out. And that’s why the populations have been declining,” Williams added.
Locals are feeling the strain of the job market every day, as many express frustration over the lack of well-paying opportunities.
“There just aren’t a lot of jobs that are really robust, where you can make a decent living, or even afford an affordable apartment,” a Santa Cruz local said.
“The market out here is rough because, I feel like the minimum wage is very low,” another Santa Cruz local said.
The affordability of housing continues to be the biggest barrier to economic stability in the region, and the situation is only getting worse.
According to the report, nearly 50% of renters are spending more than 35% of their income on rent, which is a significant financial burden. “That’s a challenge,” Williams said.
The report also highlights that 57% of jobs in Santa Cruz County are in the lowest wage tier, which further limits economic mobility for many.
“Most people that have moved out are really in that primary working-age group. So it’s created a challenge for specific industries that are struggling to find workers,” Williams added.
Another issue is the rapid rise in home prices, which is outpacing income growth. This has driven housing affordability down to just 21%.
One local described the impact of this reality, saying, “I feel like people get kicked out of homes a lot because they can’t make rent or their mortgage because of how hard it is.”
Despite these challenges, certain sectors are still seeing job growth. According to Briana Mathaw’s live report, healthcare, tourism, education, and retail remain the biggest employers in Santa Cruz.
However, industries like defense and aerospace, including companies like Joby Aviation, are seeing the fastest growth in the region.