California, Part IV

One final article on what we can learn about developing an economic growth strategy from California. John Judis wrote for the New Republic a more nuanced article than the Time magazine cover story on the future prospects of California. Its worth reading.

Judis agrees that California – no matter how dysfunctional its state government – is going to be a technology-based growth engine. But he argues that economy is likely to leave out lots of folks. This, I believe is America’s challenge, not just California’s.

Judis observes that California’s economy has no middle. Either you are part of the high wage technology (we would argue more broadly knowledge-based) economy or you are in a low wage economy. Those in the low wage economy are predominantly those with low education attainment and disproportionately African American and Hispanics.

Our educated guess is that about forty percent of the jobs, when our economy gets going again, will be lower skill/low wages. We believe that, in addition to the thirty percent or so that Judis believes are in high wage occupations, there is another thirty percent or so that will be in middle skill/middle wage occupations. What to do for the forty percent is an issue the whole country is going to have to deal with. Other than an expanded safety net, the answer is not obvious.

Secondly, Judis argues that California – more than most states – has moved from being a state that invests heavily in education, to a laggard. Sound familiar? And in doing so has significantly reduced the chance of many Californians – particularly those growing up in households without college educated parents – from getting the skills needed to be part of the sixty percent in high or middle wage jobs. He makes a strong case for a return to investing in education (pre k-16) as a priority.

He argues that this disinvestment is the result of the anti-tax movement in California and the general shift to the right by the Republican Party. I think he places too much emphasis on funding as the answer to better preparing talent for a flat world economy. Transforming teaching and learning is really important too. But we agree that restoring public investments in teaching and learning as a priority  is an essential ingredient on the path to prosperity.

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