California’s economy stifled by clearly harmful policies
California’s economy is failing the residents of this state. Even though elected officials can stand in front of cameras and point to their personal blend of statistics to assert that everything’s golden, people are leaving. Businesses are leaving. Jobs are leaving.
It is within the power of the people of California to solve this problem. Let’s start with a definition of what success would look like.
In a successful economy, a typical person should be able to get a job that pays three to four times as much as the cost of housing. Moreover, the investment of time needed to qualify for that job should be no more than four years, either to acquire a college degree or in training and apprenticeship.
If the economy was working well for the people of California, typical students graduating from high school would be only four years away from getting a job that allows them to be financially self-sufficient.
That’s not what we have now. Instead, we have an abundance of low-paying service jobs, very high taxes, wildly expensive housing and preening-but-pointless climate mandates that make everything in California more costly than in other states. Adding insult to injury, higher education is unreasonably expensive, and too many students have been conned into taking on enormous debt for useless degrees in navel-gazing majors.
How do we get to an economy in which people can easily learn what they need to know to get a job that pays enough to comfortably afford housing?
The COVID-19 pandemic response in California was a textbook case of how not to do it. California closed businesses and schools longer than other states (and countries) found necessary, scrambling to prevent the implosion of people’s lives with fraud-ridden government assistance plus mandates on private businesses that were invitations to bankruptcy.
One such business was rental housing. A combination of bans on rent increases and evictions was meant to keep people in stable housing during the pandemic, but years of this kind of thing have taken a toll on property owners who are (or used to be) in the business of rental housing.
A temporary policy that goes on for years builds an expectation that it will continue indefinitely. On Tuesday, a coalition of activist groups rallied in front of a downtown courthouse to demand money from the city of Los Angeles for rent assistance as well as an extension of protection against eviction for nonpayment of rent.
The groups were rallying because Aug. 1 is the deadline for many tenants who accumulated rent debt during the pandemic to pay what they owe. Their protection from eviction is expiring.
The groups, which all have words like “struggle” and “collective” and “empowerment” in their names, are so far to the left that with one more step they’d be in the Pacific Ocean. But that doesn’t make them all wrong. They’re wrong about the solution — the government will never be able to fill the gaps caused by a failing economy by penalizing landlords or raising taxes. But they’re right that something is terribly wrong when so many people can’t make enough money to pay for housing.
To fix this, Californians will have to slaughter two sacred cows.
The first is the belief, now written into state law, that it’s more important to model good climate policies than to build new housing. California has prevented housing construction in outlying areas by declaring that an excess of “vehicle miles traveled” worsens climate change. That has led to a virtual ban on the construction of homes in what could be new communities throughout the state. Instead, state law favors “in-fill” development, high-density housing squeezed into urban and suburban areas. This hasn’t increased affordability and it has no effect on the climate.
The second is the belief that businesses are the problem. Hardly a day goes by without a new proposal for a law, regulation or tax increase that damages the profitability of companies doing business in California. Other states don’t do this, which is why so many companies pack up, payrolls and all, and move to those states.
Give up those sacred cows, believe in jobs and housing, and watch how fast California’s economy starts to work for everybody.
Write Susan@susanshelley. com and follow her on Twitter @Susan_shelley