The Hidden Gloom Underlying California's 'Boom'

RCM ^ | 07/31/2014 | By Carson Bruno

[SeekAndFind]

Good news, in 2013, California's economy grew faster than the nation's - 2 percent vs. 1.8 percent. Many have used this as vindication that California's progressive policies, ranging from the 2012 Proposition 30 tax increases to implementation of AB 32's cap-and-trade scheme, are not hindering growth (some even suggest such policies are aiding the growth).

However, focusing on the statewide number masks the bad news; California's growth is vastly inconsistent across its regions. And if we explore those differences - using Bureau of Economic Analysis 2001-to-2012 metropolitan-area statistics adjusted for inflation using the CPI-U-RS - the Golden State looks like an awkward composition of extraordinary growth, stagnation, and decline.

* Coast vs. Inland:

Not only are these two regions geographically and politically different, their economies stand in stark contrast: coastal being home to techies and movie stars, while some of the most fertile farms and productive oil fields lay inland. However, between 2002 and 2012, inland California's real average annual growth was better than coastal California's: 1.9 percent compared to 1.2 percent. The slight inland advantage is the result of substantial growth in the early 2000's while the coastal region limped out of the burst dot-com bubble. Since 2010, though, coastal California's average annual real GDP growth has been 1.1 percent annually, about 2 ½ times larger than its inland neighbors, suggesting only coastal California has been enjoying the recovery.

* North vs. South:

The north/south divide is both geographical and cultural. Yet, the difference in the economic growth could rate as another reason to separate the two. Between 2002 and 2012, the two economies grew at roughly equal rates: NorCal at 1.3 percent and 1.4 percent for SoCal. However, since 2010, Northern California has outpaced its Southern neighbor by almost 5 times - 1.9 percent versus just 0.4 percent.

[Mike Darancette]

However, since 2010, Northern California has outpaced its Southern neighbor by almost 5 times - 1.9 percent versus just 0.4 percent.

Mexifornia not doing so good.

[US_MilitaryRules]

The only place where there is any growth or jobs in the construction industry is in the wealthy neighborhoods. The middle class and lower income neighborhoods are in major decline because they can’t afford to do any repairs or upgrades to their homes. Gas and food come first.