Economic Shifts: Is the California Dream Back?

​Part I in a series from the PPIC, California—State of Change conference

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California Chamber of Commerce President and CEO Allan Zaremberg discussed economic shifts during a panel yesterday at the Public Policy Institute of California (PPIC) conference, California—State of Change.

Former state Senator Joe Simitian, now a member of the Santa Clara County Board of Supervisors, and Antonia Hernández of the California Community Foundation joined Zaremberg on the panel moderated by San Francisco Chronicle editorial page editor Jon Diaz.

According to the PPIC, by 2020 nearly 70% of new jobs in the state will require education beyond high school. Currently only 66% of the state’s workforce has that level of training and that projection is estimated to fall over the near term.

The state’s skilled workforce has traditionally been a draw to businesses in California and education has been a buffer for families during the booms and busts of the state’s economic cycles. PPIC estimates suggest that the skills of California’s workforce are likely to fall short, leaving opportunities for the economy and Californians on the table. In this way, leadership in the realm of education policy can play a pivotal role in shaping Californians’ shared economic future.

PPIC fellow Sarah Bohn outlined the program to the panel with this question to the moderator: What types of jobs are being created and are Californians prepared to fill them?

Following is just one of the questions posed to Zaremberg by Diaz. Check back at a later date for more questions and answers from this robust panel discussion.

Part I – Is the California Dream Back?
Part II – Is Higher Education Calibrated to Meet Workforce Needs?
Part III – Economic Shifts: Housing Costs and the Three ‘T’s’​​​
Part IV – Is California Unfriendly to Business?​​​

Zaremberg: “I don’t think the California Dream ever left, especially for part of our state. The election probably would have been a lot more exciting if Tim Draper had gotten his initiative to divide California into five or six states on the ballot. You know, it got a lot of national attention and it didn’t have enough signatures to quality. I don’t know if California is five or six states, but it’s at least two: There’s the area that is from the coast to 30 miles inland, and whether you’re in San Francisco, Santa Clara, San Diego or the West side of LA is a heck of a lot different than certain parts of the Valley, certain parts of the Inland Empire; it’s different. I think there are things you can look at that you say are different that bring common threads to this.”

“If you do a circle around all of the research universities in California, whether it be Stanford, Berkeley, UCLA, UC San Diego, the economy is thriving, jobs are growing around there to meet the needs, and the talent is there to meet the jobs that want to be there. And so when you draw the circle, you look there and those economies are doing great and it’s a common thread that I think we can look at and say, notwithstanding the fact that not everybody is going to college and be[ing] an engineer or computer scientist or a biophysicist, but there are dreams that are being fulfilled everyday in those parts of California because you have an educated workforce that matches up with a high wealth, high-paying job, and that for many people, was I think when people talked to the California Dream a chance to move up in life and I think that still exists.”

“One of the things I think you need to have to measure success, you go back, I always find, I don’t know if an awful lot of economists will agree with on this, but you say we haven’t achieved the jobs that we had in 2007. Well, in my opinion the jobs we had in 2007 were based on an economy that was artificially inflated by our housing boom, by a stock market boom. People had disposable income to buy cars, send their kids to college, to go on vacation. That was due to a housing market that burst. It burst, not just here, but around the globe, and so to just measure success to come back to where we were with 2007, I don’t think is a good metric because that was artificial, it wasn’t sustainable. So what we have today and what we need to have is a sustainable economy in California, and if we can do that, we have to match up that educational opportunity for those parts of the state that aren’t necessarily around those universities, and match those up with the jobs. I think for those people, that’s where the dream may be still out in the future and we have to find a way to get that done.”

Later, when Simitian brought up income inequality, Zaremberg jumped in, responding that he thinks “we have to keep the focus on the fact that there is a growing disparity, because there’s part of California that is at the high end, and that part is growing.”

Zaremberg cited a recent Los Angeles Times article reporting that Google is expanding in Playa del Rey: “There are people who have a robust business that they want to have in California. That’s part of the dream, and there are people throughout the world that want to be in the employment of Google; they strive for that, that’s their goal when they go to college. We don’t want to interfere in that. I think that’s the important aspect of when we have this discussion, is we want to make sure we produce the people from the university level that might be best for that, that have innovation, that we foster that and we don’t stifle that as we look for ways as we—and we talked about this—try to fulfill the dream for people who aren’t there [at a four-year school]. It starts with education at the lowest level because you’re not going to get a college degree. But the chain is only as good as the weakest link. There aren’t enough slots [at state colleges and universities], they admit that fact and say, ‘Well, why do these people end up with a huge debt and go to a for-profit school?’ Well, they need to go somewhere; there aren’t enough slots at UC, and CSU has a graduation rate, I believe, I was told by them, at about  56%, and there aren’t enough slots to educate everybody. We need to make sure we focus on that and make it a priority to make that dream. But don’t stifle those industries that are in your community that are doing well… in the name of saying you’re reducing income inequality.”​​​​​​

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