A Rising Tide Doesn't Lift All Boats In California

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As President John F Kennedy once quipped, the rising tide lifts all boats; but one only needs to compare San Francisco and Stockton - cities just 80 miles apart - to question whether the rising tide lifts all boats equally. California has recovered all of the jobs the state lost during the recent recession. But that doesn't necessarily mean the state's job market is uniformly doing well.

California's tale of two states isn't new or surprising, but it is one that has been conspicuously absent from the Sacramento agenda. Yet, in the event there wasn't enough evidence already, the January 2015 Hoover Institution Golden State Poll adds further weight. Since September 2013, the Hoover Institution Golden State Poll has asked the same economic confidence questions; one of which asks employed Californian adults, "if you left your current job, how confident are you that you could find a new job in California in the next six months that pays as much as your making now."

Up until the recent poll, more employed Californians have said they are not confident than confident in being able to find an equivalent job, but the margin has been narrowing. In September 2013 the margin was 15 points, falling to 5 points, 4 points, and then 3 points in the January 2014, May 2014, and October 2014 polls, respectively. The January 2015 poll, for the first time, finds employed Californians are more confident (49%) than not confident (45%). Thus, the tide is rising, but digging deeper into this question provides further proof that it isn't an even lift.

Family Income: The Golden State Poll breaks down respondents by family income. Those in the middle income range - between $40,000 and $100,000 - are evenly split on confidence (47% confident, 47% not confident) suggesting continued job market trepidation among the middle class. Meanwhile, the most confident (by a margin of 12 points) in finding an equivalent job are those making under $40,000. This is further proof that while California's job market is indeed recovering, the quality of wages for post-recession jobs is lower than they were pre-recession.

Education: Looking at education demographics further exposes the quality of job issue (note: there is a connection between education and family income). Those with a college degree are not confident in their ability to find an equivalent job (45% confident to 50% not confident), suggesting the high-skilled job market isn't recovering sufficiently. Yet, those employed Californians with only a high school diploma or less are very confident in finding an equivalent job (51% confident to 41% not confident), providing further proof that California's job market appears more robust for lower-skilled, lower-wage labor.

Region: Lastly, by comparing the margin of confidence and the degree of confidence between the Bay Area, the Southern Coast, and the Central Valley, the rising tide doesn't look even. The Bay Area, by a 13 point margin, is the most confident in finding a similar job - not surprising given the booming tech industry, while, the Southern Coast is a little less confident (margin of 7 points), but still significantly more confident than not. However, the Central Valley is the least confident (margin of 3 points), which is within the margin of error. On degree of confidence, the Central Valley's unease is more pronounced. Equivalent pluralities cluster around "somewhat confident" (34%) and "not at all confident" (37%). Thus, the Central Valley's soft confidence is equally weighted to its complete lack of confidence in the job market.

California has many built-in advantages - including but not limited to its climate, natural resources, diverse population, and university system, but California's setbacks, such as its high tax regime, its volatile budget, its high cost of living, and its burdensome regulatory environment, are increasingly overshadowing them. When Californians celebrate the overall rising of the tide, they ignore the boats left behind. It is time for Governor Brown and other California leaders to start pushing a growth agenda to ensure JFK's words hold true.


Carson Bruno is the assistant dean for admission and program relations at the Pepperdine School of Public Policy. Follow him on Twitter @CarsonJFBruno.

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