California Ruled with Great Jobs and Boom Times. What Happened?

Gov. Gavin Newsom’s constant reminders that California’s economy ”leads the nation” as well as being a model for social justice are delusional. To be sure, California has a huge GDP, paced largely by high real estate prices and the stock value of a handful of tech companies, but it is not widely seen as a place for class mobility, and it is slowly ceding its dominance, even in tech-related industries.

In contemporary California, home to four of the world’s seven most valued tech firms, tech bros and real estate speculators occupy what Lenin called “the commanding heights,” while the reality on the ground is far less ethereal. The view from where most Californians reside is revealed in a new study sponsored by Chapman University: “Is California Losing Its Mojo?,” by business professors Marshall Toplansky (Chapman) and Kenneth Murphy (UC Irvine).

Historically, the report notes, California has outpaced the rest of the country in terms of the growth of its goods and services. However, that pace of GDP growth in the state has dropped significantly since 2022, with the measure now lagging when compared with other states. The distribution of jobs and wealth is even more worrisome.

California has been a particularly poor bet for blue-collar professions, such as manufacturing, the traditional path to upward mobility for minorities and non-college educated people. Bureau of Labor Statistics data, analyzed by Lightcast, shows California has lagged far behind places like Utah, Nevada, Texas and Arizona over a decade.

The Chapman paper acknowledges that the state has experienced enough job growth to keep unemployment levels low, but as the report details, most new jobs in California aren’t concentrated in high-wage sectors. Over the last 10 years, 62% of jobs added in California were in lower-than-average paying industries, versus 51.6% for the nation as a whole. In the last three years, the situation worsened, with 78.1% of all jobs added in California coming from lower-than-average paying industries, versus 61% for the nation as a whole.

In a state with high living costs, a dearth of well-paying jobs seems likely to bear responsibility for the state’s out-migration rate and its poverty rate, which the Census Bureau calculates, in its most comprehensive estimate, as 15.4%, one of the highest in the nation. California may be home to a lot of billionaires, but it also is home to nearly 30% of the country’s homeless.

Of course, not everyone has suffered. Besides tech billionaires, who is doing well in California? Older homeowners, for one, whose bottom line has risen as home values increased dramatically. Government workers have also thrived.

Census Bureau data highlighted in the Chapman report show that California public sector job growth over the last decade has been growing at about the same pace as jobs overall in California, but the average annual pay for those government jobs was almost double that of private sector jobs. In other words, the road to the middle class comes not from private employment but from jobs that are funded by taxpayers.

In the past, California cities including San Francisco, San Jose and San Diego all ranked in the top 10 among hubs for “advanced industry” employment — where there’s high investment in R&D and a high percentage of STEM roles. But since 2020, only San Jose remains in the top 25 metro areas for growth in such employment. Today the emerging hot spots are often east of the Sierra: Austin, Texas; Nashville; Indianapolis; Salt Lake City; and Phoenix.

Can California get its mojo back? After all, many of the state’s assets — research universities, leading tech firms and the lifestyle appeal — have not disappeared.

First, Newsom and other state cheerleaders have to stop using the size of the economy as a cover for real problems. Whatever the state’s strengths, as the Chapman report puts it, low-wage jobs overtaking advanced industry work is not sustainable.

The Biden administration emphasized bringing manufacturing back to the U.S., and President-elect Donald Trump promises to do the same, but California misses out on opportunities due to the costs associated with its regulatory regimes.

Consider technologies largely developed and embraced by California, such as EVs and the batteries that run them. Jobs in those manufacturing industries overwhelmingly fall to red states, largely a reflection of such things as easier permitting rules, lower energy costs and less intrusive labor regulations.

Remarkably, Newsom, who feuds with Elon Musk and has taken on the role of the national anti-Trump, has promised that if the next administration in Washington eliminates the federal $7,500 buyer EV tax credits, California will step in with state rebates for the vehicles — with reportedly one exception, Teslas, which happen to be the dominant American brand and the only EVs made in California. The plant in Fremont employs thousands in good manufacturing jobs.

And that’s hardly the end of the self-destructive politicking.

One “advanced industry” where California, and in particular Southern California, still has a leg up is aerospace, and its corollary, defense. The state remains well in the lead in terms of aerospace-related employment, and innovative new firms, such as Anduril in Orange County, seem primed to take advantage of Trump’s emphasis on military spending. In his first term, he increased the defense budget to historic highs.

But is California’s Democratic leadership on board?

Once again, the state’s relations with Musk, Trump “first buddy” and the world’s preeminent space pioneer, would indicate just the opposite. Musk, upset at a California law that allows schools to keep parents in the dark when their children identify as LGBTQ+, decided to move SpaceX’s headquarters from Hawthorne to Texas this year. And just weeks ago, the California Coastal Commission denied SpaceX’s request to increase its rocket launches from Vandenberg Air Force Base; reportedly after commissioners discussed his political views before they voted on the issue. Even Newsom objected.

This is not the way to build a truly inclusive and healthy economy. Gavin Newsom can talk all he wants about California’s bounty, but the road the state’s Democrats have set for us has been profoundly regressive.

This piece first appeared at Los Angeles Times.


Joel Kotkin is the author of The Coming of Neo-Feudalism: A Warning to the Global Middle Class. He is the Roger Hobbs Presidential Fellow in Urban Futures at Chapman University and and directs the Center for Demographics and Policy there. He is Senior Research Fellow at the Civitas Institute at the University of Texas in Austin. Learn more at joelkotkin.com and follow him on Twitter @joelkotkin.

Photo: Tesla Factory, Fremont, California by Maurizio Pesce via Flickr under CC 2.0 License.

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Democrat Resistance to Mass Deportations Could Push the US to a Civil War

If something approaching civil war occurs in the US, as many Americans now believe, the most immediate cause may be President Trump’s move to deport huge numbers of people, upwards of 10 million just since 2021, who have crossed the border illegally and unvetted. This population swelled as the feckless Biden administration left the border largely unguarded. Talk of resistance to “mass expulsions” is already becoming common in the mainstream media, with some suggesting that migrants will be victims of government “atrocities”. Numerous Democrats, notably Denver’s mayor Mike Johnston, have advanced plans to block federal agents with a “Tiananmen Square”-style occupation.

This from a city that has the highest per capita presence of new migrants, while a neighbouring city has seen apartment complexes taken over by Venezuelan gangs. Virtue-signalling protests against deportations may also be repeated in other cities, including Boston, Los Angeles (which alone has nearly a million undocumented migrants) and Chicago. In California, the state is allegedly threatening to take pensions and even imprison police who help federal agents. Yet since these same places tend to rely on federal transfers to pay for migrants’ housing and other needs, something in jeopardy under Trump.

Many Democrats seem utterly incapable of embracing a secure border or recognising the dangers of hosting a large, undocumented, largely poor foreign-born population. Indeed, during the campaign, vice-presidential candidate Tim Walz even suggested that, if Trump built a wall, he would build “a ladder factory”, presumably so that migrants could climb over it, while embracing progressive policies to allow undocumented migrants to get free college education and access to driver’s licenses.

Talk about tone deaf. According to Gallup, the percentage of Americans who wish to reduce immigration has soared from under 40 per cent to over 55 per cent since 2003, although many still embrace legal migration. Roughly 60 per cent of Americans and a majority of Latinos support mass deportations. Not all Democrats have drunk the open borders Kool-Aid. New York mayor Eric Adams last year suggested that mass migration could “destroy” the country’s pre-eminent city, and has even spoken in favour of having NYPD officers help immigration officials arrest undocumented felons. Among the grassroots, largely from existing African-American or Latino communities in cities like Denver, New York and Chicago, many blame undocumented border crossers for higher costs for hotels, and competition for social services, parks and hospital care.

This pushback also reflects economic reality. The Congressional Budget Office has warned that the recent “surge in immigration”, much of it undocumented, will coincide with slower wage growth. Low income American workers also have to compete with migrants for living space, jobs and social services. In addition, roughly half of all Latinos, notes Pew, associate the current wave with increased crime in their communities, including the rise of gangs taking over apartments in New York.

The key dilemma facing the Trump administration will be how to end mass migration without alienating its new supporters in America’s minority communities. We are likely to confront sorry scenes of families – many of them simply seeking a better life – being hauled out of their homes, something that may not play well among Latinos and political moderates.

To secure the border, Trump’s operatives need to proceed cautiously and with a sense of humanity. A good first step, besides building Trump’s cherished wall, would be plans being put in place to expel an estimated 435,000 migrants with criminal records. Outside the far-Left, progressive judges and the fever shops of the universities, this will likely have strong support. Trump has also expressed interest in legalising “the dreamers”, children who came illegally to the country, but have grown up here.

It gets more complicated from there. Many millions of “illegals” have been here for decades, and have paid taxes, started businesses and families. They would constitute an asset for any country. Finding ways to give these migrants a reasonable possibility of staying here, perhaps after a return to their native country, makes sense. If he proceeds cautiously, particularly with the evenly divided House of Representatives, he could build wide support for his approach to the border.

Perhaps a more complicated challenge for Trump may come from businesses, which still constitute a key GOP constituency. Many firms in the service sector and agriculture depend on undocumented workers; one possible solution would be to establish a modern version of the Bracero programme, allowing workers – but not their families – to work in sectors, like agriculture, where the supply of citizen labour is seen as highly limited. Immigrants are also heavily represented in industries such as construction, trucking, retail and manufacturing, where immigrants make up 20 per cent or more of the total workforce.

Legal immigrants, rather than being seen as a threat, could be an important asset in Trump’s drive to reindustrialise the country. As many as 600,000 new manufacturing jobs are expected to be generated this decade which cannot be filled.

By 2030, there will also be a projected shortage of 510,394 registered nurses and 40,000 doctors in primary care nationwide. Already, 28 per cent of physicians are immigrants, as are 24 per cent of dentists, and 38 per cent of home health aides. In Michigan, while immigrants accounted for just 8 per cent of all workers and 9 per cent of healthcare workers, their share was three times as high – 28 per cent – among physicians and surgeons.

Even Trump’s newly acquired allies in the tech economy will resist radical changes in immigration policy. In Silicon Valley, in 2018 nearly three quarters of the tech workforce were estimated to be foreign, many on H1B visas. Although this programme has been abused by employers, sometimes at the expense of American workers, it would be very difficult, and politically damaging, for Trump to shut it down and retain tech business support.

At the end of the day, closing the open border is a necessity, as even the Biden administration, in its dotage, has finally recognised. Yet at the same time, given demographic pressures, legal – particularly skilled – immigrants remain critical for growing the economy. It will be Trump’s challenge to maintain this economic lifeblood while working to reverse Biden’s record of undermining public safety and the credibility of our institutions.

This piece first appeared at Telegraph.


Joel Kotkin is the author of The Coming of Neo-Feudalism: A Warning to the Global Middle Class. He is the Roger Hobbs Presidential Fellow in Urban Futures at Chapman University and and directs the Center for Demographics and Policy there. He is Senior Research Fellow at the Civitas Institute at the University of Texas in Austin. Learn more at joelkotkin.com and follow him on Twitter @joelkotkin.

Homepage photo: Ted Eytan via Flickr under CC 2.0 License

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Trump will be less like Roosevelt or Reagan, who led crusades against authoritarianism, and more like Lord Palmerston, who famously remarked that his country had “no permanent allies, only permanent interests.” Other icons of realpolitik include Austria’s 19th-century minister of foreign affairs Klemens von Metternich, Wilhelmine Germany’s Otto von Bismarck, or the US’s Richard Nixon and Henry Kissinger, who ditched morality in pursuit of “an equilibrium of forces.”

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Joe Biden’s foreign policy was informed by Wilsonian notions of global liberalism, an ideology that also permeated US policy during the presidencies of George W. Bush and Barack Obama. Although these administrations approached foreign relations very differently, they both embraced the allegedly democratising influence of free trade and the need to protect the “rules-based” postwar order. Yet the legacy of this approach has been involvement in open-ended wars that often resulted in strategic defeats.

The shift to Trumpism is unsurprisingly causing panic among the US’s old allies, particularly France and Britain. Le Monde, a publication not known for its pro-American sympathies, calls Trump’s election a “nail in the coffin” of America’s “democratic model.” Much of the US policy establishment is similarly horrified by the prospect of an administration that promises to prioritise American interests with a doggedness, and even glee, rarely seen since the early republic.

If a European bureaucracy faced with increasingly right-leaning populations and its American allies want to know what has precipitated this change, they ought to look in a mirror. Biden’s early proclamations that “America is back” seem, in retrospect, close to delusional. Rather than firming up the West, Biden’s secretary of state Anthony Blinken—whom Tablet acidly described as “Neville Chamberlain with an iPad”—has been a fevered fireman unable to put out fires.

Blinken’s foreign-policy script has failed to arrest China’s rise, prevent or repel Russia’s brutal invasion of Ukraine, and has seen an equally awful conflict erupt across the Middle East. America may still be a world-leading military and economic power, but it has been unable to cope with assaults on its economy, its communications, and even its elections by Russia, China, and Iran. Trump can claim, with some justification, that he left the White House in an era of relative peace and has returned to a chaotic world in which the West is in retreat.

Read the rest of this piece at Quillette.


Joel Kotkin is the author of The Coming of Neo-Feudalism: A Warning to the Global Middle Class. He is the Roger Hobbs Presidential Fellow in Urban Futures at Chapman University and and directs the Center for Demographics and Policy there. He is Senior Research Fellow at the Civitas Institute at the University of Texas in Austin. Learn more at joelkotkin.com and follow him on Twitter @joelkotkin.

Homepage photo: Wikimedia photos/Canva.

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