You are hereThe Economy
On Sunday, Singapore cremates its greatest leader, the late Lee Kuan Yew, architect of its good fortunes. Yet the flames also could extinguish the era of relentless social and economic progress that Lee ushered in during his long, amazingly productive life.
California in 1970 was the American Dream writ large. Its economy was diversified, from aerospace and tech to agriculture, construction and manufacturing, and allowed for millions to achieve a level of prosperity and well-being rarely seen in the world.
Forty-five years later, California still is a land of dreams, but, increasingly, for a smaller group in the society. Silicon Valley, notes a recent Forbes article, is particularly productive in making billionaires’ lists and minting megafortunes faster than anywhere in the country. California’s billionaires, for the most part, epitomize American mythology – largely self-made, young and more than a little arrogant. Many older Californians, those who have held onto their houses, are mining gold of their own, as an ever-more environmentally stringent and density-mad planning regime turns even modest homes into million-dollar-plus properties.
In this column, we often rate metropolitan areas for their performance over one year, five or at most 10. But measuring economic and social progress often requires a longer lens, spanning decades.
Nowhere is this clearer than in education, which many claim is the key to higher-wage economic growth. Yet there are two sets of numbers that need to be distinguished: those states with the highest percentage of educated workers and the states that have increased their numbers most rapidly.
In the years after the Cold War, much was written about Europe’s emergence as the third great force in the global political economy, alongside Asia and the United States. Some, such as former French President Francois Mitterand’s eminence grise Jacques Attali, went even further: in his 1991 book Millenium Attali predicted that in the 21st century, “Japan and Europe may supplant the United States as the chief superpowers.”
Do the middle class and working class have a future in the Southland? If they do, that future will be largely determined in the Inland Empire, the one corner of Southern California that seems able to accommodate large-scale growth in population and jobs. If Southern California’s economy is going to grow, it will need a strong Inland Empire.
The calculation starts with the basics of the labor market. Simply put, Los Angeles and Orange counties mostly have become too expensive for many middle-skilled workers. The Riverside-San Bernardino area has emerged as a key labor supplier to the coastal counties, with upward of 15 percent to 25 percent of workers commuting to the coastal counties.
In a new report recently released by National Core, a Rancho Cucamonga nonprofit that develops low-income housing, I and my colleagues, demographer Wendell Cox and analyst Mark Schill, explored the challenges facing the region.
Since 1980, the percentage of Americans who claim Hispanic heritage has grown from 6% to 17%. By 2040, Latinos will constitute roughly 24% of the population.
Many Democrats no doubt see President Obama’s executive actions on immigration as a step not only to address legitimate human needs, but their own political future. But perhaps a more important question is how these new Americans will fare economically.
The blue team may have lost the political battle last year, but with the rapid fall of oil and commodity prices, they have temporarily gained the upper hand economically. Simultaneously, conditions have become more problematical for those interior states, notably Texas and North Dakota, that have benefited from the fossil fuel energy boom. And if the Obama administration gets its way, they are about to get tougher.
California, after nearly five years in recession, has made something of a comeback in recent years. Job growth in the state – largely due to the Silicon Valley boom – has even begun to outpace the national average. The state, finally, appears to have finally recovered the jobs lost since 2007.
To some, this makes California what someone called “a beacon of hope for progressives.” Its “comeback” has been dutifully noted and applauded by economist Paul Krugman, high priest of what passes for the American Left.
In this information age, brains are supposed to be the most valued economic currency. For California, where the regulatory environment is more difficult for companies and people who make things, this is even more the case. Generally speaking, those areas that have the heaviest concentration of educated people generally do better than those who don’t.
In the past, this season was marked by a greater interest in divinity, the family hearth and the joy of children. Increasingly our society has been turning away from such simple human pleasures, replacing them with those of technology.
Despite the annual holiday pageantry, in the West religion is on the decline, along with our society’s emphasis on human relationships. Atheism seems to be getting stronger, estimated at around 13 percent worldwide but much higher in such countries as Japan, Germany and China. “The world is going secular,” claims author Nigel Barber. “Nothing short of an ice age can stop it.”
Once giants walked this earth, and some of them were Democrats. In sharp contrast to the thin gruel that passes for leadership today, the old party of the people, with all its flaws, shaped much of the modern world, and usually for the better. Think of Franklin Roosevelt or Harry Truman, John Kennedy, or California’s Pat Brown, politicians who believed in American greatness, economic growth, and upward mobility.
Urban America is often portrayed as a tale of two kinds of places, those that “have it” and those who do not. For the most part, the cities of the Midwest—with the exception of Chicago and Minneapolis—have been consigned to the second, and inferior, class. Cleveland, Buffalo, Detroit or a host of smaller cities are rarely assessed, except as objects of pity whose only hope is to find a way, through new urbanist alchemy, to mimic the urban patterns of “superstar cities” like New York, San Francisco, Boston, or Portland.
With his questionably Constitutional move to protect America’s vast undocumented population, President Obama has provided at least five million immigrants, and likely many more, with new hope for the future. But at the same time, his economic policies, and those of the progressive wing of the Democratic Party, may guarantee that many of these newly legalized Americans will face huge obstacles trying to move up in a society creating too few opportunities already for its own citizens, much less millions of the largely ill-educated and unskilled newcomers.
In this difficult recovery, many of the strongest local economies have been those with a high share of educated people in their workforce, particularly areas where technology companies and other knowledge-based industries are growing most rapidly.
Mayor de Blasio has his work cut out for him if he really wants to end New York’s “tale of two cities.” Gotham has become the American capital of a national and even international trend toward greater income inequality and declining social mobility.
There are things the new mayor can do to help, but the early signs aren’t promising that he will be able to reverse 30 years of the hollowing out of the city’s once vibrant middle class.