For hundreds of years, California has been bursting at its seams with a diverse culture. From the Gold Rush of the 1850s to the early 20th century when it became the heart of the American movie industry, California has been long admired by people from all over searching for economic, leisure, social, and technological opportunities. This search for opportunity has led to ethnogenesis- the creation of new cultures- in countless cities throughout California. Many people are familiar with the ethnogenesis that has occurred in San Francisco, but there is one particular city about an hour and thirty minutes away from San Francisco that has also experienced ethnogenesis: Stockton. The city of Stockton is located on the San Joaquin River in the northern San Joaquin Valley. With a current population around 320,554, Stockton is the thirteenth largest city in California. The city used to be a desirable place to live due to its seaport, its central location, and the agricultural opportunities available to farmers. However, the city’s bankruptcy in 2012 marked the beginning of problems that are still trying to be solved today. As unemployment increased, poverty in Stockton was on the rise as well as the city’s crime rates. These problems never came to an end. In fact, they only led to more issues for both the residents of Stockton and the people living on the streets.
Before Stockton became one of America’s most miserable cities to live in, it was actually a desirable place to live. As early as 1933, the Port of Stockton became the first inland seaport in California, where ships from all over the world would arrive. Shipbuilding was the main industry in the city after the Gold Rush up until after World War II. With a central location relative to both San Francisco and Sacramento, the city became the region's transportation hub for many of the agricultural and manufactured products of Northern California. Rich peat soil and a temperate climate made the area around Stockton one of the richest agricultural and dairy regions in California. Almost every major fruit, nut, and field crop has been grown, and current major crops include asparagus, cherries, tomatoes, walnuts, and almonds. Grapes makeup forty percent of the fruit harvest, and award-winning wines are produced from the vineyards north of Stockton (History & Archaeology). The agricultural opportunities in Stockton lured people in. The land was inexpensive for farmers to cultivate their crops, the climate was ideal due to its hot, dry summers and its cool, rainy winters, and employment was on the rise. Along with the agricultural opportunities, the Delta waterways proved to be an excellent source of fishing for both industry and recreation. From fishing to boating, the waterways were the focal points of many early residents’ dreams of wealth and prosperity. At the time, people felt lucky to call Stockton their hometown, but those positive feelings were bound to change.
The Recession of 2008 marked the beginning of the end for the city of Stockton. The post-2001 economy grew quickly due to the growth of the real estate market, and these inflated real estate prices led to increased revenue for Stockton. But when the housing bubble collapsed in 2007 and the financial crisis began in 2008, Stockton’s revenues fell rapidly. Stockton housing prices fell 39% in the 2008 fiscal year, and the city had the country's highest foreclosure rate of 9.5% (Evans). The reason Stockton was hit by the recession so hard was because of the subprime mortgage crisis, which refers to the timeframe from which interest rates were too low, causing mass spending and eventually leading to banks losing almost all liquid assets. Banks were auctioning off houses all over California as a result of the huge real estate bubble that began forming in Stockton in 2003. People in the Bay Area and Silicon Valley discovered that you could buy a four-bedroom home in Stockton for much less than what was offered in the Bay Area. Developers started turning asparagus fields into subdivisions, and lenders handed out free money to anyone who wanted to buy.
Most of the mortgages issued in Stockton were called subprime loans, meaning less than prime quality. The borrowers often had dishonest credit, were financially strapped, or lacked sufficient income to qualify for a standard mortgage. It was all predicated on the idea that real estate prices would keep going up. But by the summer of 2005, speculators flipping houses in Stockton had helped drive the price of four-bedroom homes to more than $400,000 and the market began to soften, then it started to plunge (House Of Cards: The Mortgage Mess). Subprime borrowers who had taken the free money found themselves upside down, owing more on their new house than what it was worth. Brown lawns and foreclosure signs became the typical homes found throughout Stockton. The city became the nation's foreclosure capital with more than 6,000 homes in default or foreclosure, and this spiraled into a problem of unemployment, poverty, and crime.
After the Recession of 2008, unemployment in Stockton increased drastically. Due to the shrinking economy, Stockton had an unemployment rate of 13.3% in 2008, one of the highest in the United States. In 1990, the Stockton unemployment rate was 9.0%. In 2011, the unemployment rate skyrocketed to 18.0% (Stockton, CA Economy at a Glance). Studies show between December 2007 and December 2010, ninety-nine large metro areas accounted for more than two-thirds of the net increase nationwide in the unemployed population, with the majority of those increases found in suburbs. Stockton, Fresno, and Riverside are all considered metro areas, and they experienced the highest increases in unemployment in the three-year period since the recession began. Their unemployment rates increased by more than 7% (Brookings). As the unemployment rate increased in Stockton, the poverty rate also increased, and this direct correlation only led the city to spiral downwards.
While there are many variables in an economy that can create poverty, unemployment is one of the most common causes. The obvious reason as to why unemployment creates poverty is through the loss of income, where many families are left without sufficient salaries to meet living expenses. This can lead to indebtedness from borrowing money to support one’s needs, homelessness, and malnutrition if individuals are unable to find other sources of finance. Other issues that arise are youth unemployment. According to a Brazilian case study, unemployment of parents was shown to place significant stress on the children in the household. Unemployed adults unintentionally influence their children to drop out of school and enter the workforce (Hinteregger). Not only do children have no motivation to stay in school, but they don’t have parents that help pave a path to success. Children are left with no drive, no knowledge on how to succeed, and no support. Adult unemployment isn’t just a personal setback. Rather, it’s a setback for the future generations of the working class.
The unemployment increase in Stockton led to large increases in the poverty rates. In 2008, the percent of people in Stockton living in poverty was 21.6%. By 2014, that percentage grew to 28.06%. In 2013, the city had almost 30,000 children living below the federal poverty line ($23,050 for a family of four), according to the U.S. Census Bureau and the U.S. Department of Health and Human Services (Parrish). A large number of these families that live below the poverty line have parents that struggle with addiction. In these cases, children become a liability unless the parents are able to get public assistance. But in reality, these parents can’t help their children when they can’t take care of themselves.
Poverty is considered a form of danger for both families and children. Besides the danger of homelessness, malnutrition, and not paving a prosperous future for children, studies have shown that unemployment and poverty leads to increased crime rates. When individuals are unable to earn incomes legally to supply for their families, they may turn to criminal and violent activity. In March 2012, a research was conducted by BOCSAR in order to analyze the relation between unemployment and crime in Australia. The findings concluded that unemployment leads to the creation of huge income disparities in society, thus leading to an increase in crime rate (OpinionFront Staff). Therefore, the study confirms the age-old hypothesis that the rate of unemployment is directly proportional to crime rate. In regards to Stockton, crime rates were increasing tremendously when unemployment was on the rise, contributing to the danger residents felt at work, walking into the grocery store, and in their own home.
After Stockton filed for bankruptcy, the city had to cut back dramatically on policing, contributing to the increase in the city's longstanding problems with violence. Stockton’s crime rates are 73% higher compared to the California mean and are 83% higher than the nation's mean. In regards to violent offenses, Stockton has a rate that is 219% higher than the California average. Compared to the rest of the United States, it is 268% higher (Areavibes). In 2009, Forbes ranked Stockton America’s fifth most dangerous city due to its crime rate (Greenburg). The most common crimes that occur in Stockton include criminal homicide, forcible rape, robbery, burglary, and gang-related violence. But regardless of what the crime may be, a city that was once considered a wonderful place to live should not have gotten to this point. People who work in downtown Stockton should not have to feel nervous about parking in the parking garage and walking to their offices. But that’s the unfortunate truth of Stockton, and the city is taking small steps to improve these matters.
Considering Stockton was the largest city in the country to declare bankruptcy in the years after the recession, it still suffers from high rates of poverty, foreclosures, and violent crime. The poverty and crime rates have prompted Mayor Michael Tubbs to come up with a solution as a way to reduce economic hardship: a universal basic income, a program to guarantee no-strings-attached money to certain swaths of the population. Tubbs will soon unroll an experiment to give $500 cash every month to a select group of families for about eighteen months. The project, which will begin in 2019, is being funded by one million dollars from the Economic Security Project, a philanthropic group committed to advancing the debate on unconditional cash and basic income in the United States (Rosenberg). Stockton will be the first U.S. city to run the program. Even though the project is a trial experiment, Tubbs hopes it can answer a few questions: What do people do with the money? And how do their decisions influence other outcomes?
Mayor Tubbs plan has plenty of skeptics, and I would say I’m a bit skeptical myself. I don’t think government handouts with no strings attached will be spent wisely. In fact, handing out free money will cause the problem of not encouraging people to search for work. I believe an approach that directs people on the path of finding a job would be more appropriate. And if Stockton’s income program were to expand nationally, the expense of it would be a major issue. The U.S. National Debt is already at $21 trillion, and handing out $10,000 a year to 300 million Americans would cost $3 trillion, nearly double the entire yearly federal budget. Though Tubbs is optimistic of his plan, I think there are better solutions for the diminishing city.