Inland Regions of California - A Whole Different World

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The Economic Geography of California's Interior Regions: Sacramento, Inland Empire, and Central Valley

Based on my research, I'll analyze the geographic, economic, demographic, and housing factors that shape California's interior regions, comparing them to the coastal metro areas.

I. Sacramento Region

Geography and Infrastructure

Sacramento's geographic position has profoundly influenced its economic development:

1. Strategic river location: Located at the confluence of the Sacramento and American Rivers, Sacramento developed as a transportation hub during the Gold Rush era. Today, this central location continues to provide economic advantages.
2. Proximity to Bay Area: Unlike other interior regions, Sacramento benefits from being within reasonable commuting distance to the Bay Area This proximity has led to Sacramento developing an economy that "more closely resembles that of the San Francisco Bay Area" than other inland regions. Datausa

 

California's Inland Regions: Household Income and Spending Compared to National Averages

Based on my research of the most recent available data, here's a comprehensive comparison of income and spending patterns in California's inland regions compared to national averages:

Sacramento Region

Income

Sacramento's income levels exceed national averages but fall below coastal California regions:

• Median household income (2023): $83,753 to $88,724, approximately 107-113% of the national average This represents a 6.08% growth from the previous year, outpacing the national growth rate of around 4.2%.
• Income distribution: Sacramento has a higher proportion of households in the $75,000-$100,000 range compared to the national average Though income inequality in California overall (measured by the GINI index at 0.498) exceeds the national average of 0.478.

Spending

Sacramento residents allocate their spending differently than the national average:

• Housing: 37.9% of total expenses versus 33.1% nationally This higher housing burden persists despite Sacramento being more affordable than coastal California.
• Transportation: Slightly lower than the national average due to shorter average commute times (25.6 minutes in Sacramento versus 27.6 minutes nationally)
• Healthcare: 6% of spending versus 8% nationally, reflecting California's generally lower healthcare costs
• Entertainment and discretionary spending: 4.2% versus 4.7% nationally

Inland Empire (Riverside and San Bernardino Counties)

Income

The Inland Empire shows strong income growth but still lags behind coastal areas:

• Median household income (2023): $82,184 in San Bernardino County, approximately 105% of the national average This represents a 6.15% increase from 2022, outpacing national growth rates.
• Riverside County: Similar patterns with median income around $84,000 The cost of living in San Bernardino County is "19% higher than the national average" despite being lower than neighboring coastal counties.

Spending

Inland Empire residents face unique spending challenges:

• Housing: 36-38% of household budgets The Riverside-San Bernardino area's Consumer Price Index for housing rose 4.2% year-over-year as of January 2025.
• Transportation: Higher percentage than Sacramento due to longer commute times (32.5 minutes average) Most people in San Bernardino County "drove alone to work" with an average of 2 cars per household.
• Food: Recent data shows food prices increased 4.0% over the past year in the region, outpacing overall inflation The food index for the Riverside-San Bernardino area "advanced 1.6 percent from November 2024 to January 2025."

Economic Trends

The Inland Empire has shown remarkable job growth:

• Employment growth: The region led Southern California in job creation during the pandemic era The Inland Empire added "100,300 jobs since December 2019," which was "50% of California's total hires over three years" and "5% of all U.S. employment growth."
• Industry shift: Transportation and warehousing jobs grew by 42% since 2019, making logistics the dominant economic sector However, after exceptional growth in 2021, the industry contracted in 2023-2024 as consumer spending shifted from goods to services.

Central Valley (Fresno, San Joaquin, and Kern Counties)

Income

The Central Valley shows the largest gap compared to national averages:

• Median household income (2023): $71,271 in Fresno County, approximately 91% of the national average Fresno city's median household income was $66,804 in 2023, about 85% of the U.S. median.
• Growth rate: Despite lagging behind, the region experienced a 6.04% income growth rate in 2023, exceeding the national average Fresno's median household income "grew from $63,001 to $66,804, a 6.04% increase" between 2022 and 2023.

Spending

Central Valley residents face affordability challenges despite lower overall costs:

• Housing: Lower costs than other California regions but still consuming a higher percentage of income than the national average A recent analysis found that 53.8% of households in the Visalia/Tulare County area are "rent-burdened," spending more than 30% of income on housing.
• Food: Higher percentage of budget than the national average due to lower incomes Income distribution across age groups shows significant disparities, with householders aged 45-64 having the highest median income at $74,530 versus just $37,405 for those under 25.
• Healthcare: Despite slightly lower percentage spending than national averages, the region faces healthcare access challenges

Key Comparisons to National Averages

1. Housing burden: All inland regions spend a higher percentage of income on housing compared to the national average of 30%, with the burden ranging from 33-38% Nationwide, about 52% of renters are considered "cost-burdened," but this percentage is higher in most inland California regions.

2. Transportation costs: Generally comparable to or slightly below national averages, but with significant variation by specific location and commute patterns San Bernardino County has longer average commute times (32.5 minutes) compared to both Sacramento (25.6 minutes) and the national average (27.6 minutes).

3. Healthcare spending: Consistently 1-2 percentage points lower across all inland regions compared to the national average This reflects California's generally lower healthcare costs compared to the national average.

4. Wage growth: All three inland regions saw median household income growth rates exceeding national averages in 2022-2023 Growth rates ranged from 5.9% to 6.15% compared to the national rate of approximately 4.2%.

5. Poverty rates: Higher than national averages in all inland regions, with the Central Valley showing the highest rates Sacramento's poverty rate stands at 14.4% and Fresno's at 18.9%, both higher than the national average of 12.4%.

This comparison reveals that while California's inland regions offer more affordable alternatives to the state's coastal areas, residents still face higher housing cost burdens relative to income than the national average. However, strong income growth in recent years has helped offset some of these pressures, particularly in the Sacramento region and parts of the Inland Empire.