The Other California

California’s coastal urban centers, once the ultimate land of opportunity, suffer notorious traffic congestion, unaffordable housing, and a social chasm defined by a shrinking middle class, a small wealthy sector, and a sizable population seemingly locked in poverty. If there is a future for the region’s middle and upwardly mobile working class, it’s more likely to be found in the state’s large, generally more affordable, interior, known as the Inland Empire, or “the IE.” But for that to happen, the area’s promise needs to be better recognized—and supported—by policymakers.

Starting in the second half of the nineteenth century as a rural area with a few small cities built around affordable land and imported water—San Bernardino, Riverside, Ontario—the Inland Empire evolved as a place where, as the city of Chino’s motto puts it, “Everything Grows.” Over the years, the IE’s burgeoning farm economy attracted Mormons, Chinese, Japanese, Dutch, Basques, and Russians, and the area was also home to a large Latino workforce. By the end of the twentieth century, the IE was California’s growth hub. More than 300,000 people moved in from the state’s coast between 2007 and 2011, representing America’s largest county-to-county population shift. The IE is now one of the nation’s fastest-growing economies, and Riverside–San Bernardino–Ontario, with 4.5 million residents, is America’s 13th-largest metropolitan statistical area, ahead of Seattle, San Diego, and Denver.

As California’s overall rate of growth falls below the national average for the first time, with Los Angeles itself losing population, the IE continues to attract migrants, particularly families. It has remained, according to the American Community Survey, the only large region in the state that exceeds the national average of residents between the ages of 15 and 50 with children. Most of the area’s growth comes from the increased influx of immigrants and minorities, heavily Latino. The IE turned majority Latino in 2017, according to census data.

The Inland Empire also seems well positioned to benefit from the effects of the Covid-19 pandemic. The American Enterprise Institute has found that, since the pandemic began, less dense areas, like the IE, are growing much faster than denser ones. In 2020 so far, for instance, new home sales are up 13 percent in the IE, compared with the same period in 2019, but are down 16 percent in Los Angeles and Orange Counties. Though the IE’s larger existing home market has taken a hit, its decline is 50 percent less than that experienced in Los Angeles and Orange Counties.

The employment picture is robust, too. Over the past decade, the IE grew its jobs by 25 percent, equaling the Bay Area’s pace and almost doubling that of Los Angeles and Orange Counties. Last year, the IE created more jobs than any major metropolitan area in the state.

The Inland Empire’s trajectory, however, is not problem-free, by any means. While jobs are plentiful, high-wage employment has been scarce. Overall income growth has been among the lowest in the country, and wages rank among the lowest of any of the nation’s 50 largest counties. Even as educated professionals have moved to the area, business-service growth has remained tepid, well below that of the Bay Area and, perhaps more important, of key competitor regions such as Las Vegas, Phoenix, Dallas–Fort Worth, and Salt Lake City. Some 350,000 of the IE’s skilled and non-skilled workers commute daily to the coast for work. According to its 2018 “State of Work in the Inland Empire” report, the Center for Social Innovation at the University of California found that residents of Riverside tend to go to high-priced Orange County, while San Bernardino residents head to Los Angeles. As a result, two IE communities, Corona and Moreno Valley, rank in the top ten nationally for average length of commuting time.

Read the rest of this piece at City Journal.


Joel Kotkin is the Presidential Fellow in Urban Futures at Chapman University and executive director of the Urban Reform Institute. His latest book is The Coming of Neo-Feudalism: A Warning to the Global Middle Class. Karla López del Río is associate director of the Center for Social Innovation at UC Riverside.

Can We Save the Planet, Live Comfortably, and Have Children Too?

The Covid-19 pandemic has brought about what Zillow calls “the great re-shuffling,” as more people head out of major metropolitan areas to work, often remotely, in less dense, even rural areas. The recent surges in urban crime and disorder, in once-placid London and Paris, and once-triumphant New York, San Francisco, and Los Angeles, are likely to make things even tougher for the urban core.

As technology shifts, particularly for white-collar workers, the economic logic behind urban densification and expanded mass transit weakens. Today, nearly 45 percent of the 155 million-strong U.S. labor force is working from home full-time during the pandemic, up from below 6 percent in 2019. When the pandemic ends, this portion will no doubt drop, but experts like Stanford economist Nicholas Bloom suggest that it will remain at least 20 percent of the workforce.

Some 60 percent of U.S. teleworkers, according to Gallup, wish to keep doing so, at least for now. Globally, some 80 percent of workers expressed a desire to work from home at least some of the time. Equally important, many executives believe that this shift will continue, disproportionately affecting our largest, most celebrated business hubs. Both executives and employees have been impressed by surprising gains, and now many companies, banks, and leading tech firms – including Facebook, Salesforce, and Twitter – expect a large proportion of their workforce to continue to do their jobs remotely after the pandemic.

The coming conflict between reality and the green urban agenda

These preferences counter the narrative, so popular with planners and pundits, of the need for greater density and smaller living units in metropolitan areas, amid the expansion of mass transit.

If the densification agenda was weak before, it is almost delusional now. Even before Covid, the largest core-city populations have been stagnant or declining, including fabled American cities like New York, Los Angeles, and Chicago. Nationwide since 2010, 90 percent of major metropolitan-area growth took place in the suburbs and exurbs. Jobs followed this pattern as well before Covid started undermining the economic rationale for high-rise office towers and massive new transit investment.

To be sure, some industries may choose to concentrate in the core by preference or tradition, and certain groups, largely the childless and the super-affluent, may remain in the urban playground for reasons of culture, social contacts, or easy access to international airports. But with the rise of remote work, most are likely to labor at home or nearby. They will travel less; upward of 33 percent of all business travel, critical to the health of many inner-city economies, could be permanently lost, as people opt for remote meetings and training sessions.

Read the rest of this piece at Real Clear Energy.


Joel Kotkin is the author of The Coming of Neo-Feudalism: A Warning to the Global Middle Class. He is the Presidential Fellow in Urban Futures at Chapman University and Executive Director for Urban Reform Institute. Learn more at joelkotkin.com and follow him on Twitter @joelkotkin.

Wendell Cox is principal of Demographia, an international public policy firm located in the St. Louis metropolitan area. He is a founding senior fellow at the Urban Reform Institute, Houston and a member of the Advisory Board of the Center for Demographics and Policy at Chapman University in Orange, California. He has served as a visiting professor at the Conservatoire National des Arts et Metiers in Paris. His principal interests are economics, poverty alleviation, demographics, urban policy and transport. He is co-author of the annual Demographia International Housing Affordability Survey and author of Demographia World Urban Areas.

Photo credit: Frantik via Wikimedia under CC 3.0 License.

Ask the Experts — Revitalizing California’s Business Climate

You are invited to join Chapman University’s Vice President of Research Thomas Piechota who will host the next Ask the Experts Town Hall on Friday, January 22, from 11 – 12:30 P.M. (PST). Read more

The Case for American Optimism

Now that Trump has been edged out of office, Joe Biden may emerge as the harbinger of a brighter, better blue future or as a version of Konstantin Chernenko, the aged timeserver who ran the Soviet Union in its dying days. To succeed, he will have to confront massive pessimism about America’s direction, with some 80 percent thinking the country is out of control. The Atlantic last year compared the U.S. to a “failed state,” while The Week predicts “dark days ahead.”

Conservative opinion, particularly after the election, is also increasingly mordant. The American Conservative’s Rod Dreher thinks we are heading towards a state of “no families, no children, no future” as the cultural Left and its gender-fluid ideology take hold of the culture. Marco Rubio has already suggested that the new president’s administration will prove “polite & orderly caretakers of America’s decline.”

America as a whole is not a “failed state” but a place where people move from areas of limited opportunity to those with more. The pandemic has accelerated this process. The Congressional Budget Office has suggested that the economy could take a decade to recover, but some metropolitan areas, such as Indianapolis, Salt Lake City, Austin, Dallas–Fort Worth, and San Antonio, as well as others across the South, have recovered far more decisively from the pandemic than Los Angeles, New York, Boston, or San Francisco. Similarly, according to the Bureau of Labor Statistics, California and New York suffered the highest unemployment rates outside of tourist-dominated Nevada, Louisiana, and Hawaii.

The pandemic has accelerated a shift away from expensive coastal cities that was already well under way before it hit. Urbanistas blame this migration on the pandemic, which was most deadly in dense urban areas, but it has been going on for years, for many reasons. Workers in New York City are the least likely to return to offices, according to Kastle Systems, because of virus concerns about public transportation and skyscrapers as well as the city’s population density.

The home office is replacing at banks and leading technology firms, the office for many and, to many manager’s surprise, with surprising productivity gains. A University of Chicago study suggests that this could grow to as much as one-third of the workforce, and in Silicon Valley, the number could reach nearly 50 percent.

Many companies predict much of the workforce will remain online, some part-time and some all the time. The impact on our geography could be profound: An estimated 14 to 23 million remote workers may relocate as a consequence of the pandemic, according to a recent Upwork survey, with half of them saying they are seeking more affordable places to live.

These trends likely will moderate, but much of the repositioning of work may continue even after the introduction of a vaccine. To be sure, lower rents could provide a great opportunity to reinvent and revitalize our cities, by luring a new generation of immigrants and young entrepreneurs. But the political wave now sweeping our cities threatens to undermine even a modest rebound.

In recent months, many of our once most attractive cities — Minneapolis, Seattle, San Francisco, Los Angeles, and Portland — have become largely dysfunctional, particularly in their downtown areas. Movements to limit the police and cut their funding have become de rigueur in our most progressive cities, and violent crime in places such as Chicago, Minneapolis, New York, and Los Angeles is picking up. Given the failures of urban educational systems, the return of fear to the cities will continue to force out many middle-class families.

The pandemic has widened the gap between the vast majority and the relatively small upper-middle and upper classes. It could widen further under an administration that appears determined to fill itself with people who have close ties to Wall Street, technology firms, and the China lobby. That tendency can be seen in Biden’s proposed choice for secretary of state (Antony Blinken) as well as his naming as head of his economic council Brian Deese, a high-ranking official at BlackRock — a firm that, like many woke corporations, has pushed “stakeholder capitalism.” In this formulation, large companies are expected to serve not only their shareholders but a specific agenda of set progressive values on such things as climate change, gender roles, and “systemic” racism.

Read the rest of this piece at National Review.


Joel Kotkin is the author of The Coming of Neo-Feudalism: A Warning to the Global Middle Class. He is the Presidential Fellow in Urban Futures at Chapman University and Executive Director for Urban Reform Institute — formerly the Center for Opportunity Urbanism. Learn more at joelkotkin.com and follow him on Twitter @joelkotkin

Photo credit: Tim Brown via Flickr under CC 2.0 License.

Virtual Town Hall — Revitalizing California’s Business Climate

Join Chapman University’s Vice President of Research Thomas Piechota as he hosts the next Ask the Experts Town Hall. The installment this month will be moderated by Dean Thomas Turk of the Argyros School of Business and Economics. It will cover how best can California’s business climate be revitalized to avoid the loss of companies, Read more

Can California stop Big Tech from decamping to cheaper places?

For the past half-century, California has dominated America’s tech industry. From the development of precision farming to the incubation of aircraft, space, semiconductors and computer systems, this state has emerged time and again at the cutting edge of future industries. Read more

Peak Progressive?

In the minds of most progressives, as well as some horrified conservatives, California is the harbinger of America’s future. Governor Gavin Newsom sees his state as a model, claiming California is “the envy of the world” and the great bastion of social justice. “Unlike the Washington plutocracy,” he boasts, “California isn’t satisfied serving a powerful few on one side of the velvet rope.” Read more

Flight of the Icons: California Anti-Business Policies Driving Out Innovation Industries

Anti-business policies are driving flagship firms out of California.

It’s hard to say the word “innovation” and not think of California. Technology has paced the state’s growth in everything from agriculture and oil to housing, entertainment, and aerospace. California has always been the harbinger of the American future, the promise of ever-greater economic and social progress. Read more

The Big Thing That Trump Got Right and Biden Can’t Afford to Screw Up

Trump promised a boom that wouldn’t just help the rich and, until the pandemic, delivered on that promise.

For all his ugliness and buffoonery, Donald Trump got some big things right, politically and practically, that Joe Biden will undo at his own peril. Almost all of Trump’s wins, abroad and at home, have one thing in common: They focused on most Americans achieving broader prosperity and not only the best-off. In his first three years, through a powerful economic boom, Trump’s economic approach paid dividends for working-class voters, who enjoyed their fastest income growth in a generation.

Trump’s boldest departure was in taking on the rest of the world. His backing of American energy development lessened the power of Middle Eastern Arab dictators and helped shove them towards a critical détente with Israel. Any attempt by Obama holdovers to return to a pro-Iranian position will not only offend many Arab states, but also Israel, which sees Iran as a mortal danger.

More critical still may be Trump’s China policy, or at least his bluster. For decades, the country looked the other way as our business elites—from bankers to tech titans to sports leagues—fell under the sway of the Middle Kingdom. This had occurred, on a bipartisan basis, even as it became painfully clear to ordinary Americans that “free trade” with China had only benefited the already affluent here at the expense of most people. Since 1990, the U.S. deficit in trade goods with China has ballooned from under $10 billion annually to over $345 billion last year. In calling for a return to American production, Trump was on solid political as well as economic ground. Despite the much ballyhooed consumer benefits of low-cost imports, the vast majority of Americans seem willing to pay the higher prices that could come from returning production from China.

Any attempt by Biden to restore friendlier business relations with China, as is likely given the backgrounds of his proposed appointments, comes with considerable political risks. Biden, suggests former Democratic Senator Evan Bayh, needs to follow Trump’s aggressively “America first” line. Some prominent Democrats like New York Governor Andrew Cuomo even joined Trump in denouncing our ruinous dependence on Chinese medical supplies and there’s growing bipartisan concern about dependence on Beijing for high-tech gear. Given the damage Trump has done to business relationships, Biden has an opportunity to forge a de facto “united front” with Europe, Australia, Canada, India, Japan, and other east Asian countries.

Probably Trump’s greatest political insight was to recognize, ahead of the more conventional “leaders” of either party, the mass alienation of large sections of America’s middle and working classes. I remember on the night of the 2016 election having dinner with my friend Henry Cisneros, the former San Antonio Mayor and HUD secretary under Clinton, who told me that Trump was going to win because “he saw things none of us experts in either party could see.”

Democratic analyst Ruy Teixeira notes the party has largely written off the working and middle class, by embracing green policies that threaten their jobs and adopting the prevailing identitarian cultural and racial agenda of the faculty lounge and the media. Trump won three-quarters of the white working class vote, down only slightly from 2016. He did best with those who work with their hands, in factories, the logistics industry and energy; notes a recent study by CityLab.

Yet Biden seems determined to pursue restrictive energy and regulatory policies that would displace many people employed in basic industries like energy, agriculture and manufacturing. The president-elect seems committed to following the California model of drastically reducing fossil fuel production, subsidizing expensive renewables and higher energy prices—all policies favored by well-connected Silicon Valley and Wall Street Valley firms, including those like BlackRock from which Biden is recruiting top officials.

The renewables first approach may make the ultra-rich feel virtuous while getting richer, but it is almost certain to cause the loss of higher-wage blue collar jobs. Restrictions or even a ban on fracking would have catastrophic effects in places like Texas, North Dakota, Ohio, West Virginia, and Pennsylvania. In Texas alone, as many as a million good-paying jobs would be lost. Overall, according to a Chamber of Commerce report, a full national ban would cost 14 million jobs, far more than the 8 million lost in the Great Recession.

Read the rest of this piece at Daily Beast.

Joel Kotkin is the author of The Coming of Neo-Feudalism: A Warning to the Global Middle Class. He is the Presidential Fellow in Urban Futures at Chapman University and Executive Director for Urban Reform Institute. Learn more at joelkotkin.com and follow him on Twitter @joelkotkin.

Photo credit: Gage Skidmore via Flickr under CC 2.0 License.

Why Trump’s America Will Live On

Like many, if not most Americans, I am somewhat relieved to see the petulant, nasty and sometimes clearly unhinged Donald Trump leave the White House. Yet for all his antics and vitriol, Trump has left a legacy that will be difficult to ignore and, given the dispensation of his opponents, could shape the future for the next decade.

Trump’s 2016 victory may be best considered a necessary colonic to a constipated political economy. He challenged in ways not seen for a generation the comfortable establishmentarian politics of both parties. Most critical of all, Trump, the scion of a property mogul, has re-established, along with his odd socialist doppelganger, Bernie Sanders, the relevance of class in American politics.

Trump may soon be out of power, but many of his views on international trade, media, economics and immigration will continue to influence politics for the next decade. We might see the end of President Trump, but the forces and attitudes he has unleashed likely will remain with us for decades to come.

Bye, bye kumbaya

Trump’s challenge to the establishmentarian worldview will resonate, even after the election. His willingness to stand up to China’s trade policies violated the interests of the corporate elite, tech, Hollywood and the mainstream media, all of whom almost without exception backed his opponent. Now Trump’s nationalist approach certainly will be toned down by the ‘liberal internationalists’ Biden is putting in place to run foreign affairs.

To be sure, China should welcome the ascension of Biden, if for no other reason than his commitment to the Paris accords which force costly changes on Western economies while giving the world’s biggest carbon emitter a free ride till 2030. Along with more ‘open trade’, Biden could prove an unwitting accomplice in China’s great ambition to replace the West, and notably America, as the heart of global civilisation.

Yet the era of global kumbaya, ended by Trump, is not likely to return. It has become painfully obvious that ‘free trade’, as carried out by our own companies, benefited the already affluent at the expense of most people. As the liberal New Statesman has put it succinctly, ‘the era of peak globalisation is over’. The pandemic has shattered the global village, weakening both economic and political ties between countries, including within the European Union. When Trump lambasts free trade and China, he may alienate much of the corporate elite, but his message appeals to people and communities that lost, according to one labour-backed group, 3.4 million jobs between 1979 and 2017 to the Middle Kingdom.

To win politically, as former Democratic senator Evan Bayh suggests, may mean following Trump’s aggressively ‘America first’ line. If Biden hews to the establishment party line, he will face an emerging alliance between populists in both parties – Bernie Sanders and Joshua Hawley, for example. Some prominent Democrats like New York governor Andrew Cuomo joined Trump in denouncing our ruinous dependence on Chinese medical supplies and there’s growing bipartisan concern about dependence on Beijing for high-tech gear. Given the challenge posed by China, diplomats under Biden could seek not a restoration of the old globalism, but a de facto ‘united front’ with Europe, Australia, Canada, India, Japan and other east Asian countries against China.

The great transformation of the Democratic Party

The Democrats seem likely to give Republicans and Trump the opportunity to represent a large portion of the American middle and working classes. Today’s Democrats increasingly resemble a Stalinoid version old Republicans, who won with support from the upper class, notably on Wall Street and in Silicon Valley, as well as law and professional-service firms. This year Biden and his running mate, Kamala Harris, raised record sums from the corporate elite, notably the tech oligarchs and their Wall Street allies. Among financial firms, communications companies and lawyers, Biden outraised Trump by five to one or more. We will see this in play again in the upcoming cataclysmic battle to win the Georgia Senate seats, which started with a big Silicon Valley fundraiser for the Democratic candidates Jon Ossoff and Raphael Warnock.

The oligarchal cast of the putative ‘party of the people’ exposes it to populists left and right. Biden’s natural tendency may be, like Barack Obama, to wink and nod as Microsoft, Amazon, Apple, Facebook and Google acquire or crush competitors, continuing the erosion in anti-trust enforcement, occurring under both parties. But two thirds of the public want to break up the tech oligarchy that increasingly dominates the economy, the capital markets and information. The tech giants now account for nearly 40 per cent of the value of the Standard and Poor index, a level of concentration unprecedented in modern history.

For these oligopolies, the pandemic shift to online, covering everything from finance and retail to gaming, has provided an unprecedented boom. Tech is no longer the dynamic and entrepreneurial industry of legend. Rather, it has morphed into a system of conglomerate control more akin to the pre-war German cartels, Japanese keiretsu or Korean chaebol. As with trade, attempts to wink and nod at the oligarchs could stir a conflict with both big-city progressives, like Massachusetts senator Elizabeth Warren and some members of the House, along with several conservatives from the more rural interior.

The media’s big failure

In his usually intemperate manner, Trump accused the mainstream media of open bias and of being, in another unfortunate phrase, ‘enemies of the people’. Yet in the run-up to 2016, and beyond, there has been an odd symbiotic relationship between the two, with Trump, and hatred for him, fueling media profits and providing massive amounts of free publicity.

In some ways the media have unwittingly undermined themselves as they worked overtime to eject Trump. Since the election, even respected papers like the New York Times (where I once had a monthly column) increasingly resembled a woke version of Pravda. Indeed, the elite media is increasingly engulfed by progressive ‘groupthink’ with ‘moral clarity’ as defined by the woke, replacing a commitment to free speech.

Read the rest of this piece at spiked.

Joel Kotkin is the author of the recently released book The Coming of Neo-Feudalism: A Warning to the Global Middle Class. He is the Presidential Fellow in Urban Futures at Chapman University and Executive Director for Urban Reform Institute — formerly the Center for Opportunity Urbanism. Learn more at joelkotkin.com and follow him on Twitter @joelkotkin

Homepage photo credit: Mike Anthony via Wikimedia under CC 4.0 License.