California Senate gets dose of economic realism
The California Legislature rarely -- if ever -- concerns itself with long-range, big-picture social and economic trends and their relationship to current decision-making.
Likewise, legislators rarely -- if ever -- expose themselves to inputs about those trends that don't match their ideological predilections.
On Monday, however, members of the state Senate heard a cogent synopsis of California's demographic and economic present and its likely future that they should take to heart.
Simply put, California Lutheran University economist Bill Watkins told the Senate that California's once-vigorous population growth has slowed to a crawl, the state's population is likely to begin dropping in the next couple of decades due to out-migration and a dropping birthrate, and it's mostly losing middle-class families "because of a lack of opportunity."
"We're losing the economic heart of our state," Watkins told the Senate from its podium in one of a series of lectures arranged by its leaders.
The result, Watkins said, could be a state of mostly rich and poor residents in which "there is no middle class."
He also warned senators that while the Bay Area-centered high-tech industry is today one of the state's few economic bright spots, rapidly changing technology -- shifting from computers with complex software to smartphones and tablets with cheap apps -- could undermine the region's dominance because the latter "can be done almost anyplace."
And what would Watkins do to revive a lethargic economy and brighten the state's social ambiance?
"You need to create an opportunity economy," he told the Senate, adding that we should encourage more immigration from other countries because immigrants are motivated and tend to found job-creating new businesses at a faster rate than native-born Californians, and that the Legislature should make such business formation and expansion easier by reducing regulatory red tape.
Most of all, Watkins seemed to be saying, California's policymakers need to look beyond the politics of the moment and think of the long-term consequences of what they do and what they don't do.
We Californians have come to expect two major socio-economic factors to continue -- high levels of population growth and an economy in which every recession is followed by a vigorous recovery.
But with a population growth rate today just a third of what it was in the 1980s and at least a strong possibility of population decline, one of those assumptions is already out of date.
And the other assumption about a vigorous recovery is not happening, either, as the state remains tied for the highest unemployment rate in the nation.
It is, as Watkins implies, time to adjust our policymaking in response to harsh reality, not wishful thinking.
