With an Expanding UC Campus and More Jobs, Merced Is Booming. But That Growth Isn’t for Everyone

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The Central Valley City of Merced is a place where prosperity sits alongside entrenched poverty. Merced has experienced the top personal income growth of any metro area in the country for the past five years, mostly fueled by an expanding UC campus. (Matt Rogers for KQED)

To walk down Main Street in Merced is to see a revitalization boom: Historic theaters are getting facelifts, and new bars and restaurants are opening. Merced has experienced the top personal income growth of any metro area in the country for the past five years, mostly fueled by an expanding UC campus. This Central Valley city looks like a place of prosperity.

Yet, just a few blocks away are neighborhoods where families live doubled up, where stores with fresh produce are hard to find. For many Merced families it is tough to make ends meet. Forty-three percent of all babies and toddlers in this county live in poverty. Merced is booming, but it hasn’t reached everyone.

Take the Allison family: Bobbie Allison is raising her four young kids on her own. It’s a struggle, especially with her occasional job as a cashier at a 7-Eleven in Merced, where she makes about $11 an hour. They used to live in Merced but had to move to Atwater, a 30-minute drive north, to find an affordable rental.

“Minimum wage just doesn’t cut it,” Allison said. “I just need something that pays more than minimum wage.”

For Bobbie Allison, balancing work and caring for her four children is a struggle, despite California's safety net. (Matt Rogers/KQED)

Despite Allison’s efforts to find work to support her children, they are part of the more than one-thirds of all Merced youth who experience early childhood poverty. In the county, 43 percent of all children under the age of 3 — or nearly 4,800 youth — are impoverished, according to Kidsdata. Statewide, 285,000 families with children under 5 live in poverty, according to data from the Population Reference Bureau and Kidsdata that's based on U.S. Census statistics for 2017.

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Allison hates that her family is part of such statistics. She has been through the county’s welfare-to-work program twice. Now she’s tapped out. Allison said she has put in countless job applications and has heard back only from one employer, a large poultry plant.

“My biggest hope is Foster Farms, but that’s a very large commute,” Allison said. The pay would be $12 an hour, slightly more than 7-Eleven, and she would get more hours. Yet the commute to get to the plant and drop off her kids with a baby sitter would be about two hours each way.

“I think the problem is that it is very difficult to get out of the poverty situation,” said Monika Grasley, director of a Merced nonprofit called Lifeline CDC.

All Grasley’s staff are welfare recipients, so she sees their daily life struggles up-close. She said many people are working hard in Merced to make sure the poorest kids and their families don’t fall into complete disaster.

To find affordable Section 8 housing, Bobbie Allison moved 30 minutes outside Merced with her children. (Matt Rogers/KQED)

“Merced County has an amazing safety net for people that live in poverty,” Grasley said. Yet, she sometimes feels like those who care are so busy putting Band-Aids on the deep poverty problems that no one is thinking about helping families be self-sufficient.

“Being on the system and making a certain amount of resources — then to get beyond that, the jump is too big,” Grasley said.

The cost of living is too high, she said. With rent, child care and transportation costs consistently rising, Bobbie Allison needs a higher-paying job.

Another major challenge with moving people out of poverty in Merced is that one-third of all the county’s adults do not have a high school diploma, which severely limits job options.

Grasley said the system needs to focus on giving people practical skills training — not keeping them one step ahead of disaster.

“We need to create a transitional stepping system where folks can actually move forward and get the training that they need and have jobs available for folks,” she said.

To get out of poverty, a family would need to be self-sustaining with an income that adequately covers housing, food, clothing and child care. Researchers at the California Budget and Policy Center estimate that would be between $45,000 and $50,000 a year for a family of four in Merced.

Bobbie Allison doesn’t think it’s possible for her, but the mayor of Merced, Mike Murphy, hopes it will be for her and others.

“The factors that lead to childhood poverty are issues that a number of folks in Merced and in our state are working on,” Murphy said.

He knows many of Merced’s residents don’t have the education or professional qualifications to get higher-paying jobs.

“Our economy is diversifying. Agriculture is a big part of our way of life and our economy but that’s changing, and the largest factor in that is the presence and the growth of the University of California, Merced,” he said.

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The campus in Merced, which opened in 2005, is the newest expansion for the UC system, and many hope it will revitalize the local economy.

In the short term, as the campus expands, there will be construction jobs available, but Murphy’s vision is much bigger: The hope is that more kids will be inspired by the UC campus to go to college, and that would make them more employable, he said.

Construction is going on everywhere in the city as UC Merced’s footprint expands. Opposite Murphy’s office in downtown Merced is a brand-new building. “This was a vacant lot for the longest time, and then the university bought this and constructed this building,” Murphy said.

He hopes the revitalization of downtown Merced — facelifts to historic buildings and theaters, new restaurants and bars — will bring in more students and tourists. The increased economic activity, he said, should trickle down to everyone.

One historic building in downtown Merced being renovated, The Tioga, was once a famous hotel that was later converted into apartments. Most recently, The Tioga offered 90 units of affordable housing, and the mayor confirmed the building was home to low-income residents — until the renovation.

“It was housing but it was not well-kept,” Murphy said.

Economic development like this site in Merced will eventually bring new, higher-paying jobs to the community. (Matt Rogers/KQED)

The downside of UC Merced’s expansion has been displacement of the city’s poor, pushing them farther out of town. As students and university staff move in, housing is snapped up by those with higher incomes.

Bobbie Allison had to move from Merced to Atwater to find affordable housing and a landlord willing to accept her Section 8 housing voucher. With her job and child care still in Merced, life is more complicated.

Murphy is confident that his city will help lift up its poorest residents. He counts on the help of the state, too, which provides welfare benefits to Merced’s poorest families.

Gov. Gavin Newsom and his administration have made ending poverty in California one of their priorities. “Child poverty is the overarching problem we’re trying to solve,” said Kris Perry, deputy assistant secretary in the state’s Health and Human Services Agency.

Perry comes from the early childhood field and has seen the crisis up-close.

“Research has shown time and time again that it's one thing to give parents services, it’s another thing to put cash in their pockets — that is one of the most important things you can do when you’re trying to figure out how to ameliorate poverty,” she said.

Newsom has proposed an increase to the cash aid that poor families get through the CalWORKS grant. But Perry said bringing down such high levels of poverty takes more: “This will take a really big push, not only from the state but also from the county of Merced.”

Nationally, the National Academies of Sciences, Engineering, and Medicine recently released a blueprint for cutting child poverty in half in 10 years that involves new expenditures of close to $90 billion a year.

The group noted that the real cost of child poverty is around $1 trillion per year in lost revenues due to lower productivity in the workforce, poor health and higher crime. The plan lays out two possible plans that both involve increasing cash aid and bringing more people into the workforce.

It is unlikely that the Trump administration will move on these proposals, having already signaled cuts to domestic spending and anti-poverty programs in its next budget — which leaves the lot of California’s impoverished children squarely in the hands of state and local elected representatives.

A scene from Atwater in the Central Valley in early 2019.
A scene from Atwater in the Central Valley in mid-March 2019. (Matt Rogers for KQED)

As for Bobbie Allison, she isn’t waiting for politicians to solve her problems. She heard back from Foster Farms and has gone through job orientation. Now she has to figure out how to manage her four young children, two of whom are still waitlisted for a preschool seat, so she can work the 9-5 shifts she has been offered.

“I will figure something out one way or the other. I always do,” she said.

Deepa Fernandes is an Early Childhood reporting fellow at Pacific Oaks College. The fellowship is funded in part by First 5 LA.