Opinion: California economy can beat the world, but not for all residents

An employee assembles a rocket motor at the SpaceX plant in Hawthorne. Courtesy of SpaceX

The juxtaposition of two California events on Tuesday couldn’t have been more ironic.

Gov. Gavin Newsom, whose paucity of public appearances this month had been puzzling – and the subject of much social media speculation – emerged in Monterey, where he delivered a very optimistic, if not boastful, assessment of the economy of the state.

Newsom ticked off data points that he said prove “the California dream is still alive and well” and that the state “continues to dominate in all categories.”

“The future is still being invented here,” he told California Forward’s annual economic summit. “I hope we can stop fighting,” he added. “We have to focus on what’s right.

Simultaneously, the Public Policy Institute of California released a new survey of Californians’ attitudes toward the economic well-being of the state – and theirs – that was anything but optimistic.

One observation: “Less than half expect good economic conditions over the next 12 months. Majorities in all income groups are pessimistic about the economy.

Another: “Most Californians say the availability of high paying jobs is a problem in their part of the state, and 22% see it as a big problem. “

“An overwhelming majority of age, education, gender, and racial / ethnic groups see this as a problem,” PPIC said. “Notably, 26% of Californians say they have seriously considered leaving their part of the state because of the lack of well-paying jobs. Of those who have considered moving, most would leave the state rather than go elsewhere in California. “

Overwhelmingly, survey respondents believe the government’s gaping gap between the haves and have-nots is widening. “The majority of partisan groups and regions say that children growing up in California today will be worse off than their parents,” PPIC reported.

Another revelation: “Twenty-five percent of Californians and 36% of low-income residents worry every day or almost every day about the cost of housing. Low-income residents are also more worried than those with higher incomes about paying their bills, paying their debt, and saving enough for retirement.

So is the booming and dominant economy that Newsom represents reality, or is the PPIC poll a more accurate snapshot of a society with deeply rooted and perhaps even intractable socio-economic inequalities? ?

In a sense, it’s both. The positive data points that Newsom so eagerly ticked off are not, in and of themselves, inaccurate, but their beneficiaries are primarily those who are already in the state outrank. Its members escaped most of the negative effects of the pandemic-induced recession and benefited greatly from sharp rises in the stock market and other assets, such as real estate.

In contrast, those who were in the underclass when COVID-19 got stuck suffered the brunt of its economic impacts, as more than 2 million jobs disappeared, and the socio-economic gap widened. well dug. The PPIC poll reflected not only the recent negative experiences of those at the lower rungs of the economic ladder, but also an appreciation of their plight by most of those at the upper echelons.

Additionally, Newsom selected the data to bolster its claim of economic dominance. He omitted, for example, the fact that California’s unemployment rate of 7.5% is the highest in the country, or that California’s poverty rate of 17.2% as calculated by the Census Bureau to include the cost of living is also the worst in the country.

This high poverty rate reflects what the PPIC survey found – that large numbers of Californians constantly worry about the high cost of keeping the roofs above their heads, paying their bills and paying their debts.

We could therefore legitimately say that in the face of the economic distress felt by millions of its inhabitants, California is also dominant.

CalMatters is a public service journalism company committed to explaining how the California State Capitol works and why it matters.

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