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Op-Ed: California Has Two Economies, and One Isn’t Progressing. Here’s a Plan that Might Work

Op-Ed: California Has Two Economies, and One Isn’t Progressing. Here’s a Plan that Might Work

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By Antonio Villaraigosa
Special to the Bee

California regional economies graph antonio villaraigosa for governor of california

It is a frequently repeated fact: If California were a nation, our gross domestic product would rank us as the sixth largest economy in the world. Sounds impressive, doesn’t it?

But recent numbers confirm that not every area of the state is doing quite that well.

Compare two regions, the Bay Area and the San Joaquin Valley.

According to recent numbers, the Bay Area (with a population of about 5.7 million) has a larger economy than the Netherlands and ranks in the top 20 worldwide. However, the San Joaquin Valley (population 4.1 million) keeps much less prestigious company – according to a recent article in the Central Valley Business Times, the Central Valley would fall between Iraq and Algeria and not even make the top 50.

John Westberg Sacramento Bee

A farm worker picks vegetables for a produce stand in 2016 in Modesto. Per capita income in the Central Valley is 30 percent below the statewide average. John Westberg [email protected]

WE NEED TO FULLY RESTORE LOCAL ECONOMIC DEVELOPMENT FUNDS BECAUSE WHEN IT COMES TO LOCAL ECONOMIC GROWTH, SACRAMENTO DOESN’T ALWAYS KNOW BEST. AND WE NEED TO ESTABLISH BROAD REGIONAL ECONOMIC OPPORTUNITY ZONES AND COOPERATION, SO ECONOMICALLY-CHALLENGED AREAS CAN WORK TOGETHER TO ATTRACT HIGH-WAGE JOBS.

No one would mistake the economy of the Netherlands for that of Algeria, and no one should mistake the wide economic opportunity gap that exists in our state.

It’s a tale of two Californias, one coastal and thriving, one inland and still suffering the effects of the Great Recession. That’s why we need to rethink our one-size-fits-all approach to economic policy and regulation.

A policy that might make sense in Silicon Valley doesn’t necessarily make a difference in Fresno. A regulation that is a small annoyance for a thriving business on the west side of Los Angeles could be a job killer for an industry in the Inland Empire.

We certainly need to set big economic goals, but then give each of our economic regions the tools and autonomy they need to grow our economy fairly. We once enabled “enterprise zones,” which were largely county based. These zones were swept away in the last recession when Sacramento took the funds that were dedicated to local economic development to help close a statewide budget gap.

While we have taken the limited step of restoring some local infrastructure financing, we need to be bolder. We need to fully restore those local economic development funds because when it comes to local economic growth, Sacramento doesn’t always know best. And we need to establish broad regional economic opportunity zones and cooperation, so economically challenged areas can work together to attract high-wage jobs.

The facts show the stark disparities in our economic progress. In recent years, the Bay Area accounted for 62 percent of the growth in high-wage jobs in areas like information technology and professional and business services. The Central Valley lost jobs in these high-wage sectors.

Per capita income in the Central Valley is now 30 percent below the statewide average. And families in the Inland Empire fare even worse, with incomes 34 percent below the California average.

When I served as speaker of the state Assembly, I was not shy about passing bold new laws and new mandates. But as mayor of Los Angeles, I learned that statewide mandates, regulations and interventions didn’t always make sense from a local perspective. What seemed easy from the Capitol building is a whole lot more complicated up close.

I recently proposed restoring the ability of local governments to keep local funds to invest in the creation of housing for teachers, nurses, firefighters and others. Such a power will most likely be used in the Bay Area and along the coast, where red-hot economic growth has caused housing costs to soar to astronomical levels.

Now, it is time to give a similar power to those parts of our state facing another challenge – slow economic growth and a lack of high-wage jobs.

These new Prosperity Zones need the power to keep local funds local. They need the ability to adapt regulations to local realities while continuing to meet statewide goals. Most of all, they need the authority to act together as regional economies to help lift up every family in every part of California.

Franklin Roosevelt once said, “The test of our progress is not whether we add more to the abundance of those who have much; it is whether we provide enough for those who have too little.”

The challenge facing California in the years ahead is making sure that abundance extends to every part of our great state so that we are making economic progress for everyone.

ANTONIO VILLARAIGOSA, THE FORMER MAYOR OF LOS ANGELES AND SPEAKER OF THE CALIFORNIA ASSEMBLY, IS A CANDIDATE FOR GOVERNOR. CONTACT HIM AT [email protected]