As he sought re-election to his fourth and last term as governor this year, Jerry Brown crowed about a “California comeback” after weathering the worst recession since the Great Depression.
He was particularly adept at selling it to out-of-state media types who liked the story line and didn’t delve into details.
In fact, California’s recovery has been very slow and very spotty, largely confined to the San Francisco Bay Area and a few other coastal enclaves.
We have regained, on paper, the million-plus jobs lost during the recession, but that superficially positive factoid ignores growth in the labor force and an unpleasant truth that many of those new jobs are low-paying and/or part-time.
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California’s unemployment rate in October, 7.3 percent, was fifth highest among the states.
By another federal measure called “U-6,” which takes into account involuntary part-time work and “marginal attachment” to the labor force, California has the nation’s second highest rate of employment distress, 15.8 percent.
That translates into about 3 million California workers, plus their families, for whom recession is still a fact of life, and in many inner-city and rural farm communities, it’s even worse.
The unemployment rate may be as low as 4 percent in affluent Bay Area counties, but it’s 23.7 percent in Imperial County.
When coupled with the state’s high cost of living, high levels of unemployment and underemployment translate into the nation’s highest rate of poverty by an alternate measurement devised by the U.S. Census Bureau, with nearly a quarter of the state’s residents impoverished.
If California has not truly recovered from the last recession, what lies ahead?
The Legislature’s budget adviser, Mac Taylor, bases his new analysis on an assumption that recovery will continue for at least another couple of years, but after that, the situation is cloudy.
Economic woes in Europe and a slowdown in China are clouds on the horizon and, as Taylor says, the stock market’s performance is even less certain.
“In particular,” his budget outlook report says, “it is impossible to predict future stock market trends.”
His “California comeback” mantra notwithstanding, Brown knows that California’s budget is very precariously balanced and is utterly dependent, thanks to its progressive income tax system, on how well a handful of wealthy Californians fare in stocks and other capital markets.
Now in legacy mode, Brown wants to end his governorship in 2019 with the state budget in the black but knows – and occasionally says publicly – that another downturn is possible, if not probable.
It could easily strike late in Brown’s last term. That’s why he wants to build reserves and hold down spending and is keeping his fingers crossed that it happens after he’s gone.
Call The Bee’s Dan Walters, (916) 321-1195. Back columns, sacbee.com/dan-walters. Follow him on Twitter @WaltersBee.