Influencers Opinion

Here’s an economic renewal program for California’s next governor

A worker packs a box on Cyber Monday in 2016 at the Amazon fulfillment center in San Bernardino. California’s next governor will have to guide the state through the fast-evolving economy.
A worker packs a box on Cyber Monday in 2016 at the Amazon fulfillment center in San Bernardino. California’s next governor will have to guide the state through the fast-evolving economy. Los Angeles Times/TNS

The good thing about this campaign season is that it’s nearly over. The bad thing is that it has dragged on without a serious discussion of California’s economic future.

Way ahead in the polls, Lt. Gov. Gavin Newsom shrewdly agreed to only one debate with Republican John Cox — on public radio on a Monday morning. While that made political sense, it short-changed Californians.

A state that fancies itself the center of the resistance to President Donald Trump has the fourth worst income inequality among all states, with the gap between black and white households bigger than in the early 1990s. Across the political spectrum, Californians are aware of the housing affordability crisis.

We need a new economic approach. With California taking its own path on immigrant rights, climate policy and so much more, it is time for the state to find its own economic strategy. To do this, we need to recognize six key realities.


The first is that innovation and disruption are driving growth, but also causing anxiety. To increase worker productivity, we also need to improve their security through benefits that they can take from job to job, more support if they become unemployed, assistance with affordable housing and even a form of universal basic income. That will make job churning less of a threat and more of an opportunity.

The second is that inequality and racial division are corrosive to cohesion and prosperity. Putting equity at the center of economic policy — by targeting investment to underserved communities, driving education money to the disadvantaged, addressing discrimination in the workplace, helping former inmates reenter the labor force and integrating immigrants — is in everyone’s long-term interest.

Manuel Pastor new.JPG
Manuel Pastor

The third is that the coming “silver tsunami” requires that we pay attention to seniors and their caregivers. The share of Californians 65 or older is projected to rise from 11 percent in 2010 to 26 percent by 2060. We need to prepare for this demographic shift with more generous family leave policies, tax credits for elder care expenses and improved training and wages for caregivers.

The fourth is that we will need to protect the environment and employment. Some suggest that California’s ambitious climate change efforts will threaten the economic prospects of workers of color. But aggressive climate policy is actually more popular with Latinos, blacks and Asians than with whites; like venture capitalists, they realize that the state can gain from emerging green tech industries.

The fifth is that we need to change tax and fiscal policy to promote equity and stability. While there is no evidence that California’s higher taxes on the wealthy are driving them to other states, overreliance on income taxes leads to rollercoaster revenues. Extending the state sales tax to services, taxing commercial properties at their current value and reinstituting inheritance taxes will move us in the right direction.

The final reality is that we need a shift in both policy and power. In October, Chris Benner and I offered a 12-step program for the California economy so it can kick its addictions to income inequality, racial division and short-term thinking. Over the last four decades, worker productivity in California soared by 90 percent but real wages stagnated. So while we need to shore up education and economic policies, we also need a better balance of power between labor, corporations and communities.

California now has an opportunity to lead boldly in economic policy as well as environmental and social policy. So while I wish it had happened before the election, let’s start talking the day after about how we get there.

Manuel Pastor is director of the Program for Environmental and Regional Equity at the University of Southern California and a participant in The Sacramento Bee/McClatchy Influencers series. He can be contacted at Find the series (with more Monday on advice for the next governor) at


The Sacramento Bee editorial board tackles the day’s biggest issues seven days a week, 365 days a year to keep you informed about California policy and politics.
We're a one-stop shop for timely, relevant viewpoints from elected officials and advocates on water, healthcare and housing and more.
Want to stay in the conversation? Support this forum for voices from across the state with a digital subscription to The Sacramento Bee.
Related stories from Sacramento Bee