US economy

Is California a Good Role Model?


Writing in Forbes in May, Shellenberger argued that “California isn’t just the least progressive state. It’s also the most racist.”

These attacks have prompted angry retorts in some quarters.

Manuel Pastor, a sociologist at the University of Southern California, sharply disputed the allegations of racism in the Kotkin and Shellenberger essays. Pastor shot back in an email:

The notion that California has become like apartheid South Africa is over-the-top rhetoric. Consider whether as an immigrant you would like to be in a state that fully cooperates with ICE or one that has passed a “California Values Act” that has us labeled a “sanctuary state.” Consider whether you want to be in a state that is cutting back on education — say, Arizona, until the recent teachers’ strike — or one that has a Local Control Funding Formula that is now directing more money to districts and schools with more English learners, poor children, and foster youth.

Kevin Drum, a writer at Mother Jones, wrote in January that “California Is Doing Fine, Thank You Very Much”:

There’s a whole cottage industry on the right dedicated to the proposition that California is a hellhole. Why? Because California is the most liberal state in the nation, and the existence of a high-tax, high-service state that nonetheless has a great economy is an affront to their principles. And yet, California’s economy is doing fine.

Richard Florida, director of the Martin Prosperity Institute at the University of Toronto, argued in an email that California is better described as a crucial proving ground in a country undergoing exceptional structural change in its economy and demography.

“I think warts and all that California remains a bright spot and innovative force in the US political economy,” Florida told me by email:

I am not sure these are California problems. They are symptoms of the more general structural transformation of the economy and the bifurcation of the labor market into a small share (say 33 percent) of knowledge jobs and a much larger share of low wage service jobs (say half).

California, Florida noted, “leads on just about every measure I’ve seen of innovation (patents, start-ups etc.) and talent (college grads). So the nature of its economy produces this kind of divide.”

The actual economic data can be used to make the case for either side.

The state has prospered and economic mobility is relatively high. At the same time, if Democrats’ top goals are to reduce poverty, lessen inequality, get a roof over everyone’s head and close the education gap, the party has a long way to go.

Let’s look at the plus side first. Take per capita personal income, which grew nationally from $4,218 in 1970 to $51,631 in 2017, according to the St. Louis Federal Reserve. In California, over that same period, income grew significantly more, from $4,966 to $58,272, in real dollars, unadjusted for inflation.

In recent years, California has ranked among the top ten states in terms of economic growth, far outpacing national growth. From 1977 to 2017, California’s real gross domestic product increased by 77.7 percent. During the same period, the national gross domestic product grew by 58.9 percent.

One of the most important measures is economic mobility — the ability to ascend the ladder. On this measure, California does relatively well, ranking 14th in the nation, according to a 2014 study by the Stanford Center on Poverty and Inequality.



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