An afternoon collection of links and comments about my home, California.
California is becoming ‘post-industrial hell,’ economist says
Since the recession began, times have been tough in California – everybody knows it. The economy is in a protracted stall.
But it took economists at California Lutheran University’s Center for Economic Research and Forecasting to describe, in hyperbolic language, the depth of the problems that have beset the Golden State since the stock market started to tank in the summer of ’08.
“California,” writes center director Bill Watkins, “is fast becoming a post-industrial hell.”
That’s true “for almost everyone except the gentry class, their best servants and the public sector,” he writes.
In an essay and accompanying PowerPoint, Watkins sketches his portrait of Lotus Land as Hell on Earth by citing a series of post-recession economic statistics, many familiar, all of them sobering:
- The state’s unemployment rate seems stuck at 12 percent, higher than the national average, and the state is still shedding jobs.
- The poverty rate is 16.1 percent, also slightly higher than the national average, and maybe 10 points higher when adjusted for the high cost of living.
- Fresno and San Bernardino are among the 10 poorest large cities in the U.S. With a 34.6 percent poverty rate, San Bernardino is the second-poorest U.S. city, after famously troubled Detroit.
Other economic indicators give a grim readout as well, according to Watkins. Wages are down. Since the recession began, the value of the average California home has dropped by about $90,000. About 3 percent of all home mortgages are in foreclosure.
And while 150,000 California students get their college diplomas each year, the state is creating only about 50,000 jobs for people with college degrees, he writes.
And so, middle-class people are bailing out. “Domestic migration has been negative for a decade,” Watkins writes, and the state is attracting fewer legal immigrants from abroad.
To top it off, Watkins complains of problems with the state’s schools and highways, its brutally gridlocked traffic, and even the reliability of the water supply.
“California’s future is pretty grim, until Sacramento takes off the blinders,” he writes.
Unemployed Californians face benefit losses
Nearly 1.8 million jobless Americans could lose their unemployment insurance benefits at year’s end unless Congress approves the president’s proposal to reauthorize the federal program through 2012, said the National Employment Law Project, an advocacy group known as NELP.
California leads the other 49 states with 305,400 unemployed people facing a cutoff.
About 70,600 would see their 26 weeks of regular, state-paid checks run out. Another 122,500 would stop getting federal emergency unemployment compensation, and 112,300 immediately would lose special, extended federal benefits.
Other states with large numbers of people on unemployment insurance include Florida, New York, Texas and New Jersey.
On Tuesday, NELP released a report called “Hanging on by a Thread,” warning that a cut in unemployment benefits would damage workers, business owners and the U.S. economy.
“For millions of out-of-work Americans hanging on by a thread, unemployment insurance is the only thing preventing a free-fall into destitution and despair,” said Christine Owens, executive director of NELP.
“For struggling businesses and the halting economy, unemployment insurance is what’s preserving consumer spending at a moment we need it most. Withdrawing this crucial stimulus would likely tip the nation back into recession.”
Herdt: When private-sector socialism fails
Brown’s signing of the autism-coverage mandate bill means that insurers will have to begin covering the therapy next year. The California Health Benefits Review Program, run by University of California researchers, concludes the added cost to insurers will be $93.3 million, which would result in insurance premium increases of from 0.14 percent to 0.24 percent.
The California Association of Health Plans projects a far higher cost of $850 million.
Whatever the cost, it will have to be borne because it is part of the collective contract upon which insurance is based. People protect against risks by paying into a collective pool, then tap into the pool if they are unfortunate enough to suffer from an accident, disease or disability.
The model of private-sector socialism just doesn’t work when one party regularly cashes the monthly checks from the other, then arbitrarily decides it doesn’t have to uphold its part of the bargain.
Gov. Jerry Brown is giving unions most of what they seek
