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Economic Myths and Realities
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11308 |
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Section : |
SPECIAL SECTION
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| Issue
Date : |
9 / 1993 |
3,256 Words |
| Author
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Robert J. McKenzie, Jr.
Robert J. McKenzie, Jr., is staff director of the California
Senate Republican Caucus. |
Since at least the end of World War II, California has been the envy of the rest of the United States and even of many other countries. A marvelous climate, wide open spaces, the eerie, still beauty of the deserts, the majestic snowcapped Sierra Nevadas, oak-studded coastal mountains, spacious beaches, central and northern coastal areas where towering redwoods and pines march literally to water's edge, fertile agricultural plains and valleys producing a variety and quantity of crops and commodities unparalleled elsewhere--no wonder people all over the United States (and the world) dreamed of living in the Golden State!
And living, working, and playing in California has become a reality for millions. California's civilian population grew from 6.9 million in 1940 to 29.7 million in 1990, an increase of 430 percent in 50 years. The labor force and employment grew dramatically during those 50 years, also, contributing to the legend of California as the Golden State, a place of unlimited opportunity. The labor force in 1940 was 3.1 million with 2.7 million employed; by 1990 it was 14.7 million with 13.8 million employed, an increase of 511 percent. Job growth in selected sectors tells an interesting story: Manufacturing employment increased 483 percent; construction 706 percent; real estate and finance 854 percent; services 1,230 percent; wholesale and retail trade 575 percent; government 779 percent.
Although viewing only a bar graph may give the impression that the growth in these three factors was steady and even throughout the 50 years, it was not so. Employment grew at a faster rate than population in the forties, sixties, seventies, and eighties.
But as we will see later, some dramatic changes began in approximately 1988, and aggravated by the recession of 1990 (from which California may not recover until 1994) they have altered the reality of California today. Population grew at a strong pace from 1988 to 1992 (approximately 600,000 per year), but employment growth in that period was minuscule.
SUDDENLY RECESSION IS A PROBLEM
Throughout the postwar era, California routinely laughed off national recessions. In fact, California led the nation out of each recession until the recession of 1990.
This time is different. California accounts for 14 percent of national unemployment and almost 40 percent of national manufacturing unemployment. A
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