True unemployment remains high statewide
Though the housing market has picked up as of late in California, the economic outlook, overall, for the state remains grim with many counties having unemployment rates that stand at 12 percent, or more, and some parts of the San Joaquin Valley suffering from true unemployment in the 20 percent to 30 percent range. Moreover, parts of Riverside and San Bernardino Counties are staggering under the weight of 20 percent, or more, true unemployment.
Underemployment also poses a serious problem
Adding to the negative impact of a high rate of joblessness is the high incidence of underemployment in jobs that pay no benefits and pay wages or salaries that do not empower a lifestyle beyond bare necessities. Bereft of anything beyond food, rent/utilities, clothing and gas money, the underemployed do not have the means to help spark and fire economic recovery.
Strategic advantages that give good cause for hope
Though high unemployment and widespread underemployment do not instill confidence when one thinks about California’s economy, there is reason for hope. Detailed below are steps that it should take to spark and sustain economic recovery. If assiduously applied, significant job creation could be triggered, California’s state revenues would be bolstered, and the economy could be made healthy again and remain an effective competitor in the state, regional, national and world economies.
The state should review its assets, which are considerable: a) a diverse and highly trained/educated workforce; b) the world’s eighth-largest economy, with the nation’s largest market of about 40 million people; c) the nation’s gateway to economies and markets of great scale in the Pacific and East Asia regions; d) some of the nation’s and world’s finest colleges/universities, research institutes and think tanks; e) headquarters for some of the world’s most innovative companies, including Google, Hewlett-Packard, Tesla and eBay, among others; and f) with some of the nation’s and world’s most stringent environmental laws, the pacesetter in the use of nonfossil fuel and eco-friendly technology, which should, over time, greatly improve efficiency and produce a steadily growing number of green jobs in the state.
The degree of legislative gridlock should decline
Coupled with the strategic advantages just noted, California voters in November 2010 passed Proposition 25, which initiated a constitutional amendment to make the passage requirement for budget acts a simple majority of 51 percent, rather than a super-majority passage requirement of 66 percent. This reinstatement of the simple-majority rule should alleviate the problem of gridlock that has often made passage of the budget extremely difficult, if not impossible. Though the risk of gridlock still exists, the danger of it occurring frequently has been reduced and will, hopefully, give legislators, from both political extremes, stronger incentives to seek common ground in the design, crafting and passage of the budget, which would positively impact the lives of all Californians.
Living-wage constructs are vital to the state’s 58 counties
Each of California’s 58 counties should work diligently to forge living-wage constructs to ensure that the working poor and middle class can afford to live above an everyday subsistence level. The poor, and the rapidly evaporating middle class, find it impossible to be “good customers” so vital to the recovery and growth of the state’s economy, which is 60 percent, or more, consumer driven. California can ill afford to have large numbers of its residents who are “bad customers” because of financial distress.
California’s sales tax should be reduced to trigger consumer consumption
To further stimulate its economy, California should trim its sales tax from 9 percent, inclusive of local taxes, to 6 percent. For any state, including California, the sales-tax construct is regressive and does nothing to stimulate the consumer consumption so vital to our state’s recovery and long-term and sustainable economic growth.
As advocated by then-gubernatorial candidate Meg Whitman in 2010, California should sharply reduce its tax on factory-equipment orders to spur greater profitability among manufacturing companies and to make the state a more attractive place for out-of-state companies to do business, and to foster a more favorable business environment for entities already here, to stay. Candidate Whitman also advocated the creation of tax breaks as incentives for research centers and think tanks to relocate here from out of state. So doing would enhance California’s strategic advantage in regional, national and global economies of scale. In steadily increasing measure, innovation will have to fire the state’s recovery and sustain its growth over the long term.
California should simplify its laws and requirements for start-ups
To the end of making California more competitive on a state, regional, national and global scale, the state’s labyrinthine laws relative to start-ups should be simplified to encourage entrepreneurs to start new businesses and companies. Doing so would also encourage small and medium-sized firms to expand their production/service capabilities to stimulate the growth of new jobs so vital to this state’s recovery and long-term economic welfare.
California must not create a further innovation deficit by cutting education funding
Public schools, K-16, are having to absorb severe budget cuts, which are creating education and training deficits that will cause more underemployment and unemployment that will drain tax revenues and produce a growing creativity and innovation deficit statewide, which could well hurt business and economic competitiveness, from local to state to national to international economies of scale. Prospects for adequate funding of public education, for the next four to five years, or longer, appear very grim and do little to engender hope for economic recovery and sustainable growth over the long term.
As residents of Ventura County, we must think outside the box
One of the most salient features to come to the fore at the recent 100% Summit, sponsored by the Social Justice Fund for Ventura County and other groups, was that a broad spectrum of stakeholders countywide need to search for “out of the box solutions” to assure stable funding not only for K-16 public education, but also to secure sufficient funding for critically needed social programs such as: care for the elderly, care for the infirm, initiatives to help transition homeless people to adequate housing with attendant training to assure their employability and attendant absence from lists of the homeless, outreach programs to reach at-risk youth, mentoring/tutoring programs to bolster students’ academic skills, initiatives to improve access to public transportation, and steps to augment the vital role that Moorpark, Oxnard and Ventura Colleges play in supplying a well-trained workforce to meet the staffing needs of for-profit and nonprofit organizations around the county. In short, we cannot rely on Sacramento any longer and we must forge our own economic destiny. We should, however, continue to advocate for positive change in the halls of power in Sacramento, but we must also be very realistic about the budgetary crisis gripping the state and find our own win-win solutions to problems we face in Ventura County.
Private-public partnerships are vital to maintaining the county’s competitiveness
Business leaders, education leadership, neighborhood council leaders, public-policy makers, chambers of commerce leadership, nonprofit chiefs, students and political leaders, among others, should collaborate diligently to seek creative and “out of the box” solutions to make Ventura County not only the greatest county in the state, but the greatest county/parish in the nation. Without such ongoing, creative and diligent collaboration, Ventura County would sink into the rapidly deepening twilight of economic and lifestyle mediocrity and the deep darkness of abject poverty. The choices we face are stark. Do we choose brotherhood/sisterhood or victimhood? Do we hang together or hang separately?
Dave Morse serves as a substitute teacher, writer and community volunteer in VTA County.