Look, I've been reading through some reporting from CalMatters about prison closures in California, and it's a sobering story that doesn't directly affect our Bay Area market, but it's worth understanding the broader economic patterns. Governor Newsom has closed five prisons so far, with another potential closure in the works that could save the state around $150 million annually. The issue is that these closures have devastated small communities that depended on prison employment to keep their local economies afloat.
Take Blythe, a small desert city near Arizona, or Susanville up in the Lassen National Forest. Both towns had reasonably stable economies when they had steady state employment from the prisons. But when California's sentencing laws changed and fewer people got incarcerated, those facilities shut down. In Blythe, the governor ordered closure of Chuckwalla Valley State Prison back in 2022, and the city was already struggling to pay its bills before that happened. The local leadership has asked for state help, but nothing's materialized yet.
Susanville's situation is even more dramatic. After the prison closure was announced in 2021, people essentially abandoned ship. According to the reporting, the city's population dropped from about 16,000 people in 2021 down to 14,000 by 2024. When people lose their jobs and see the economic foundation crumble, they vote with their feet and move somewhere with more opportunity.
What I am seeing locally here in the Bay Area is that we've been fortunate enough to have a diversified economy that doesn't depend on any single industry or government operation. Our job market, while certainly affected by broader economic cycles, has enough variety that we're not watching entire towns empty out the way these prison-dependent communities are. That said, this CalMatters reporting reminds me that economic resilience matters everywhere, and communities that rely too heavily on one employer or sector are vulnerable when conditions change.
