In the month of July, the California economy added jobs – a lot of jobs. With a whopping 25,200 jobs, the Golden State eclipsed the jobs gains of all other states. The jobless rate over the last year has fallen from 11.9 percent to 10.7 percent today. If you’re looking at numbers like these, it’s easy for optimism and excitement to take hold and to walk away from the data with the warm feeling that the California economy has finally, after half a decade of downturn, begun the process of a real recovery.
But there are other, more detailed data out there, and unfortunately they paint a much less positive picture of the California recovery. California’s recovery is a fragmented one: massive gains in one sector and continued crippling stagnation in others. The uneven recovery is what is producing hollow job growth numbers that despite their girth had no impact on the unemployment rate from June to July.
Perhaps the most noteworthy statistic of California’s lagging recovery is that not only does the state have the third highest unemployment rate in the country, but in 39 of its 58 countries, unemployment is over 10 percent.
California perpetually ranks poorly when it comes to ease of doing business surveys due to regulatory and taxation policies, most recently highlighted by Claremont McKenna College’s Kosmont-Rose Institute Cost of Doing Business Survey. The survey looked at 421 cities, and out of the 50 most expensive cities to do business in the nation, a whopping 16 of them were in California.
Stats on manufacturing show the result of this. In 1998, five percent of the world’s semiconductor factories were located in the Golden State. Today? Less than one percent. Santa Clara County, home of the crown jewel of economic growth in California, Silicon Valley, once had one quarter of its jobs in the manufacturing sector ten years ago. Today, one-third of those jobs have disappeared.
Between 2007 and 2010, the median income of California fell by 11 percent, almost twice the decline nationally. And despite the overall job growth, with much of it coming in the in the Silicon Valley, even the Valley experienced a three percent drop in median household income over the last year, more evidence of the duality of California’s job situation: some growth, yet simultaneous decline in other economic indicators even in the most expansive and innovative region of California.
The California Economic Summit Action Plan is designed with inclusiveness in mind: a recovery that doesn’t stake its statistical success to one economic or geographic region, and instead an all-encompassing recovery that can collectively lift California. By identifying clusters and funding regional intermediaries, regions can flourish together and even out a recovery whose divisive growth has hamstringed our state’s economic success.
As Lt. Govenor Gavin Newsom put it at the Economic Summit in May, we need to ” focus on regions and, in this case, regions rising together.”
“It’s about aligning best practices and strategies that are unique to the characteristics of each of the unique regions.”