California has become a very blue state. Democrats control both the governor’s office and the Legislature. With that power comes the responsibility to confront the problems facing the people of our state. In particular, Democrats are responsible for confronting our state’s increasing poverty, declining opportunity and significant income inequality – in other words, the problems Neel Kashkari is talking about. When Neel spends time as an unemployed 40-year-old looking for a job in Fresno, his point is that, despite all the gushing about a California comeback, our state government is failing to improve economic opportunities for those most in need.More.
The International Business Times recently noted that while California has the world’s eighth largest economy, it nonetheless has our nation’s highest poverty rate. According to the U.S. Census Bureau’s Supplemental Poverty Measure (SPM), for the three year period from 2009-11 (the bureau recommends the use of three-year averages to compare estimates across states), California had both the nation’s highest number (8.8 million) and percentage (23.5 percent) of people living in poverty. In the most recent report for 2010-12, the numbers were worse. While California still had both the nation’s highest number and percent of people living in poverty, there were more people (9 million) at a higher percentage (23.8 percent).
Gov. Brown refers to California’s poverty epidemic as “the flip side of California’s incredible attractiveness.” But, these are more than mere statistics. Behind these numbers are real Californians consumed by anxiety. Will there be jobs for them or their children? Will those jobs pay enough? Will they spend the rest of their lives dependent on government benefits? They struggle searching for jobs that offer dignity and self-respect, wondering whether their children will ever be able to support themselves or start families.
In July, California had the fourth-worst unemployment rate in the nation, at 7.4 percent. While that’s bad, it’s actually an improvement. Unfortunately, the big improvements have come in the wealthiest areas, particularly those affected by Silicon Valley’s high tech boom. July’s unemployment rate was 5.9 percent in the San Jose area and 4.9 percent in the San Francisco area.
Outside this enclave, it gets ugly. In Fresno, July’s unemployment rate was 10.8 percent; in Stockton, it was 11.1 percent; and, in Bakersfield, 10.4 percent. Once a beacon of opportunity, Los Angeles came in at a dismal 8.7 percent, which includes the low unemployment of the more affluent Westside.
Wealthy Californians in Silicon Valley and along our beautiful coast are prospering. For those less fortunate, those living in the other California, our state’s anti-business policies are depriving them of the jobs that could meaningfully improve their lives.
In Chief Executive Magazine’s 2014 survey of CEOs’ views on the best and worst states for business, California came in 50th for the 10th year in a row. It’s no surprise that Toyota moved its U.S. headquarters from Torrance to Texas or that even California-based Tesla Motors is locating its planned giant battery factory in Nevada rather than in California.
Small businesses fare no better. The Legislature just sent another round of bills for Gov. Brown’s signature that will further escalate California’s status as our nation’s most anti-business state and affirm the well-deserved “F” Thumbtack.com’s 2014 Small Business Friendliness Survey gave California for both small-businesses friendliness and overall regulation. Already struggling in the nation’s worst regulatory environment, California businesses, and those who desperately need the jobs they create, have little hope of assistance by way of veto from Gov. Brown.
Government regulations come at a cost. Noneconomic benefits may justify those costs but there are still costs. Rational governance would view regulations as investments in social benefits and resist regulations that fail to produce enough of such benefits or unnecessarily increase costs. California’s current leadership has failed to do so, resulting in poverty and income inequality.
According to an analysis by 24/7 Wall St. of Census Bureau data, California has our nation’s seventh-largest gap between rich and poor, the seventh-highest proportion of households earning more than $200,000 per year and the highest number of households earning less than $10,000 per year.
How can this be in a state dominated by Democrats, who proclaim their concern about income equality? It’s because California’s government has become so focused on regulating businesses and redistributing wealth that it’s forgotten that you can only redistribute wealth if you have it...
California, the once-Golden State, getting even less golden under Democrat Party rule.
RELATED: A blast from the past, from Joel Kotkin, "The Golden State Is Crumbling."
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