As the Legislative session came to a close this week, California Democrats are all patting themselves on the backs for enacting a series of modest “progressive” measures, but the truth is that lawmakers have no real “progress” to celebrate.
The California Legislature needs to start thinking long-term about the state’s major public policy problems, and the economy in particular, which continue to fall by the wayside because they are not priorities for most lawmakers, who are primarily just focused on small victories that they can turnaround quickly to score political gains and appeal to their base.
Democrats in particular need to start thinking more about how they can help the entire state and its economy, and not just about how they can help provide more welfare or wage regulations to people living in poverty. Eliminating the “welfare queen” rule and providing farmworkers with more overtime pay is not going to bring any measureable short or long-term economic gains to the state.
California’s long-term success depends on a strong and growing economy. And nearly every major policy issue in California has a major connection to the economy (i.e. housing, water, regulatory, tax, debt), yet these are the same issues which are not being addressed by the California Legislature in any significant way.
In fact, nearly all of the so-called “progressive” victories from this year simply come at the expense of economic growth and job creation to provide select “core” Democrat constituencies with a special benefit (i.e. farmworker overtime, paid family leave, minimum wage).
The unfortunate reality is that California Democrat lawmakers and the California Democrat Party have no ideas about how to create jobs and improve the California economy—all of their ideas serve to hinder and restrict economic growth and encourage the flight of capital and jobs out of the state.
California Democrats have not even come to grips with the new economic reality in California that our economy is not special and certainly not out performing the national economy despite being the most heavily taxed and regulated.
In fact, the Bay Area is the only area doing well and could possibly be considered “exceptional” in terms of growth and resilience, while the rest of the state is underperforming the national economy by 20-40%, according to data obtained from the U.S. Department of Commerce.
Specifically, 19 of the state’s 26 metro economic regions underperformed the national economy for the combined 2008-14 period, with eight of those regions listed among the worst economic regions in the whole country. Only the state’s two Bay Area regions experienced economic growth that significantly exceeds the national averages.
In July, 76% of the jobs created in the state were created in the Bay Area, even though it composes only about 25% of the state’s population, according to the Economic Development Department.
More than 10,000 businesses have already left California since 2008 due to the high cost of doing business and poor regulatory climate in this state, according to a landmark study by Spectrum Location Solutions.
The health of the California economy should be the top priority or among the top priorities of every policymaker in Sacramento. But the Democrats, including Governor Brown, won’t even so much as admit that there is any room for improvement on economic policy in this state.
These numbers and the economic challenges they reflect are real. It is an objective fact that nearly every study of California’s business and tax climate puts us either dead last or among the worst of all 50 states in terms of economic policy towards business.
California Democrats believe more welfare spending, subsidies and wage regulations will solve the problem. They are wrong.
This so-called “progressive” agenda is coming at a great cost to the state’s economy, but the state’s leaders claim these policies take the state forward and may actually improve the state’s economy through some twisted left-wing logic.
"If this state does not start seriously focusing on the business climate. Probably the only thing that is going to be left is high-tech, Pharma and the motion picture industry," says Tom Scott, the California Director for the National Federation of Independent Business.
Scott says there are probably about a 1,000 things wrong with the state’s approach to business, but that the leadership of this state is actually headed in the completely wrong direction when it comes to improving the state’s business climate.
Scott believes that a concerted effort needs to be made by the leadership of this state to improve our business climate, instead of going the other way and enacting policies that will only serve to encourage more job flight and economic decline.
How could any reasonable person in California disagree that economic development should be a priority of the California State Legislature? Yet the California Legislature does nothing to improve the economy, but everything it can to hurt the economy (Republicans excluded).
Any concerns or notes of caution related to the “progressive” agenda are quickly dismissed as pure hogwash and business propaganda.
But the job loss and economic decline in California is real, and it might just take another big crash for everybody to acknowledge it, even the Democrats in the State Legislature.
The California Democrat Legislature somehow believes that the entire California business community is living in a “gold rush” and they need to rush to do everything they can to tax and regulate business as quickly and heavily as they can to distribute the proceeds to “working families” and labor unions.
This desire is not grounded in economic reality and has led to the deterioration of the state’s economy and business climate, particularly in the inland regions.
That’s unchecked socialism folks, and that’s where this Legislature has been headed for a long time with the same results found in failed economies of the past. You’re welcome to call that “success” but it’s certainly not progress.
David Kersten is the president of the Kersten Institute for Governance and Public Policy (www.kersteninstitute.org). He is also an adjunct professor of public policy at the University of San Francisco and an independent consultant on public policy issues.