Produced in collaboration with Chris Hoene, Executive Director of the California Budget & Policy Center.
California is back. Less than a decade ago, California stood on the brink of fiscal disaster due to both the Great Recession and ill-advised policy choices made in prior years. Today the Golden State has a growing economy that is among the nation's bright spots. Hiring in California is outpacing the national average, with the number of jobs here growing by 14.6 percent since the recovery began. What's more, a mix of smart policy choices, including voter approval in November 2012 of temporary income tax and sales tax rate increases, are working in tandem with a growing state economy to put California on the path to fiscal health. Increased revenues have allowed state policymakers to begin catching up on investments in education and expand health coverage to millions of previously uninsured Californians, among other public investments, while also paying down debt and saving for a rainy day.
California's comeback is, in many ways, a model for other states. Yet, the real economic gains have yet to reach many across the state. New Census figures released last month show that California's official poverty rate (16.4 percent) remains high. Using the Census Bureau's Supplemental Poverty Measure, which accounts for the state's relatively high cost of living, California's poverty rate is the highest of any state.
Further, California's recent job and wage gains are concentrated at the highest income levels and heavily tilted geographically to the San Francisco Bay Area. Wages for the majority of people working in California have eroded since 1979 and have yet to recover fully from the declines seen during and after the Great Recession. Though the California Comeback represents progress for a few, economic security should be possible for all Californians.
Achieving economic security -- affording the basics, withstanding a job loss or weathering other life uncertainties and planning for the future with college or retirement savings -- relies on access to thriving communities. The availability of good schools and jobs as well as affordable, quality health care and child care creates pathways to economic security.
Transportation, parks, libraries and other community assets also contribute to the foundation of opportunity. Policy decisions, such as investments in education and health care, good jobs and retirement security are the building blocks of opportunity that shape how communities thrive and promote economic security for their residents.
The California story should be about more than turning the corner on the Great Recession and its fiscal and economic challenges. Our state should be working to provide a platform for broadened prosperity that makes economic security possible for all. Ensuring that California's current and future economic gains are widely shared requires smart policy choices by local, state, and national leaders. Through critical decisions to improve economic security such as enacting new earned income tax credits, retirement security including the recent Secure Choice program, and minimum wage and sick day laws, California and a set of its cities do provide a model for other states. Yet, to move toward thriving communities everywhere that provide meaningful opportunity and tap the talents of all those in California, we should:
- Boost job quality and income by making sure the new California Earned Income Tax Credit (EITC) reaches all workers paid low wages, increasing the minimum wage so families can afford the basics, strengthening paid family leave, and combatting wage theft.
- Increase investments in education to improve quality in early education programs, boost support for K-12 education and ensure that California's new school funding formula is working as intended to improve outcomes for all students, and provide affordable higher education.
- Ensure retirement security by preserving and strengthening Medicare and Social Security, protecting workers' collective bargaining rights, and actively implementing California's Secure Choice retirement program.
- Provide access to quality, affordable health care for all Californian's by expanding Medi-Cal eligibility (the Medicaid program in our state), to aspiring Californians.
- Restore and strengthen public supports for low-income families, seniors, and people with disabilities.
Many of these strategies for broadening economic security will require additional revenues. Looking ahead to November 2016, California voters will likely be asked to consider one or more policy proposals that would increase investments needed to sustain and broaden the state's economic growth. Taking the steps needed to foster economic security is possible when we also consider that all our communities are stronger when all Californians are better educated, healthier and more financially secure.
California's post-Great Recession comeback is a good story and only the first chapter. It is time to write the next chapter about a robust and vital California built by public investments in opportunity and decisions that improve outcomes for all Californians. That would be a great story and would represent a true model for the rest of the country.
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Henry A. J. Ramos is CEO of the Insight Center for Community Economic Development.
Chris Hoene is Executive Director of the California Budget & Policy Center.