As set out over the past few years at Fox and Hounds, there are big reasons to be concerned about our employment future in California. We have built vast entitlement systems that are far removed from jobs. The marches of technology and globalization continue to permanently eliminate jobs. Our retail and financial services sectors are undergoing major downsizing, and even sectors like health care that have seen constant employment growth are now stalled.
Now it is true that the history of California employment over the past fifty years suggests a very strong resilience. Technology has eliminated jobs throughout this period, only to create a greater number of new occupations, not even envisioned at times of job loss. Whether this past resilience will continue, though, remains to be seen.
For me, the most encouraging dynamic today for California’s employment future is the entrepreneurism and ambition of the generation of Californians in their twenties and thirties. Far more than my generation of Baby Boomers, this is a generation in California that is market oriented, pragmatic rather than ideological and risk-taking.
I see their entrepreneurism and ambition at every turn, in my professional activities, volunteer activities, and in some ways most of all in my activities with one of our Bay Area universities, California State University East Bay (CSUEB).
Our young entrepreneurs in social media and internet commerce receive the greatest attention, but of course they are in all fields. Here are a few I’m now working with: two entrepreneurs in San Jose who are heading an effort to install solar panels in the rights of way of state highways; two young developers, based in Santa Monica, who are part of a team trying to build a new transit-oriented community in the City of Hercules; a human resources professional building an online job search business; two workers’ comp/payroll service experts building a professional employer organization. What unites all is a willingness to take up big economic issues of alternate energy, transportation, employment not through “policy analysis” or “policy advocacy” but through specific projects and business ventures.
In the nonprofit world, a Silicon Valley start-up veteran concerned with autism is starting a software testing business to employ adults on the autistic spectrum. A job training agency in San Francisco working with ex-offenders has started a security guard business, to help integrate ex-offenders into security guard employment.
Then there is our college population, as represented by our college students at CSUEB. I go to CSUEB once a week, and always come back upbeat about our state’s future. Many of the students at CSUEB come from our state’s working class and struggling lower middle class. They do not take for granted the opportunity in higher education, and are very focused on finding their place in the emerging job world . Though most are looking for steady decent-paying jobs, there is a streak of entrepreneurism. CSUEB, like the other universities in the California State University system, does the heavy lifting in California education, contributing particularly to our workforce of nurses, teachers, educators, IT administrators. In recent years, CSUEB has launched major initiatives to increase training in engineering and technology.
A few miles down the road from CSUEB, former UC Berkeley student leaders from the Baby Boomer generation, Oakland Mayor Jean Quan and her sidekick Dan Siegel last week continued to undermine Oakland businesses as they played out their communitarian fantasies. Who says today’s students don’t represent a better employment future.
***
Speaking of entrepreneurship, from our colleagues, Chris Thornberg and Ben Wright of Beacon Economics comes the most recent data on new business incorporations in California.
2011 Number of Incorporations by Month
January 5,227
February 5,760
March 7,648
April 6,817
May 5,998
June 6,710
July 6,885
August 6,187
The most recent numbers on new business formation in California continue a trend that we’ve seen since 2008. Even while the economy has struggled, new businesses have been incorporated in California, at a substantial rate. Incorporations are only a part of the new business growth, but is an important indicator. Below are the most recent numbers from the state Department of Finance on new business incorporations for 2011. They are below the rates of 8,000-9,000 new business incorporations per month in 2007, but still show an active new business growth.
Michael Bernick, Former California Employment Development Department Director and Milken Institute Fellow
Poll Shows Little Voter Appeal to Repeal SMART
in UncategorizedThree years after their original vote on Measure Q, the sales tax ballot measure passed in 2008, an overwhelming majority of voters want the SMART project to continue to move forward. Voters show little desire to stop the SMART train project according to a poll commissioned by North Bay Leadership Council (NBLC) The poll, completed in late October, found that voters in Sonoma and Marin County strongly support construction of the project as presently planned from San Rafael to Santa Rosa. Six of 10 voters (58%) opposed the repeal of Measure Q.
Despite a perceived rocky start for SMART due to the recession and management issues, voters have held firm in their commitment to the project for the same reasons they supported Measure Q. “It is clear from the poll results, that given these tough economic times, North Bay voters are clamoring for the 900 jobs SMART will create by year’s end followed by many more jobs in the coming years. Voters seek to reap the twin benefits of stimulating the local economy and getting reduced construction and materials costs,” said Cynthia Murray, president and CEO of NBLC. Murray continued, “Voters also want green transportation alternatives to Highway 101 offered by the train and pathway, and aren’t buying the argument that if SMART goes away that there will be any another alternative.”
Proponents of repealing Measure Q remain approximately the same percentage (32%) as those who did not vote for it in 2008. Then and now, the anti-SMART proponents have failed to undermine voters’ convictions that the SMART project will create much-needed jobs, boost the economy, relieve congestion, and reduce greenhouse gas emissions. The poll confirms that the repeal effort is misguided and cannot succeed.
Said Murray, “We hope that these compelling poll results lead the anti-SMART group to drop its efforts to stop the train. The train opponents have already cost Marin and Sonoma taxpayers millions of dollars bond sale penalties. Now they want to make taxpayers pay even more for an unnecessary, expensive do-over election that voters already decided in 2008,” Murray concluded.
The poll, by Dresner Wickers Barber Sanders, fielded 501 randomly selected, registered voters in the SMART district (Marin and Sonoma Counties) between October 27-30. Given the sample size, the poll results have a margin of error of +/- 4.37% at a .95 confidence level.
The Young Entrepreneurs Who Will Save the California Economy
in UncategorizedAs set out over the past few years at Fox and Hounds, there are big reasons to be concerned about our employment future in California. We have built vast entitlement systems that are far removed from jobs. The marches of technology and globalization continue to permanently eliminate jobs. Our retail and financial services sectors are undergoing major downsizing, and even sectors like health care that have seen constant employment growth are now stalled.
Now it is true that the history of California employment over the past fifty years suggests a very strong resilience. Technology has eliminated jobs throughout this period, only to create a greater number of new occupations, not even envisioned at times of job loss. Whether this past resilience will continue, though, remains to be seen.
For me, the most encouraging dynamic today for California’s employment future is the entrepreneurism and ambition of the generation of Californians in their twenties and thirties. Far more than my generation of Baby Boomers, this is a generation in California that is market oriented, pragmatic rather than ideological and risk-taking.
I see their entrepreneurism and ambition at every turn, in my professional activities, volunteer activities, and in some ways most of all in my activities with one of our Bay Area universities, California State University East Bay (CSUEB).
Our young entrepreneurs in social media and internet commerce receive the greatest attention, but of course they are in all fields. Here are a few I’m now working with: two entrepreneurs in San Jose who are heading an effort to install solar panels in the rights of way of state highways; two young developers, based in Santa Monica, who are part of a team trying to build a new transit-oriented community in the City of Hercules; a human resources professional building an online job search business; two workers’ comp/payroll service experts building a professional employer organization. What unites all is a willingness to take up big economic issues of alternate energy, transportation, employment not through “policy analysis” or “policy advocacy” but through specific projects and business ventures.
In the nonprofit world, a Silicon Valley start-up veteran concerned with autism is starting a software testing business to employ adults on the autistic spectrum. A job training agency in San Francisco working with ex-offenders has started a security guard business, to help integrate ex-offenders into security guard employment.
Then there is our college population, as represented by our college students at CSUEB. I go to CSUEB once a week, and always come back upbeat about our state’s future. Many of the students at CSUEB come from our state’s working class and struggling lower middle class. They do not take for granted the opportunity in higher education, and are very focused on finding their place in the emerging job world . Though most are looking for steady decent-paying jobs, there is a streak of entrepreneurism. CSUEB, like the other universities in the California State University system, does the heavy lifting in California education, contributing particularly to our workforce of nurses, teachers, educators, IT administrators. In recent years, CSUEB has launched major initiatives to increase training in engineering and technology.
A few miles down the road from CSUEB, former UC Berkeley student leaders from the Baby Boomer generation, Oakland Mayor Jean Quan and her sidekick Dan Siegel last week continued to undermine Oakland businesses as they played out their communitarian fantasies. Who says today’s students don’t represent a better employment future.
***
Speaking of entrepreneurship, from our colleagues, Chris Thornberg and Ben Wright of Beacon Economics comes the most recent data on new business incorporations in California.
2011 Number of Incorporations by Month
January 5,227
February 5,760
March 7,648
April 6,817
May 5,998
June 6,710
July 6,885
August 6,187
The most recent numbers on new business formation in California continue a trend that we’ve seen since 2008. Even while the economy has struggled, new businesses have been incorporated in California, at a substantial rate. Incorporations are only a part of the new business growth, but is an important indicator. Below are the most recent numbers from the state Department of Finance on new business incorporations for 2011. They are below the rates of 8,000-9,000 new business incorporations per month in 2007, but still show an active new business growth.
Michael Bernick, Former California Employment Development Department Director and Milken Institute Fellow
Historical Precedents Reason for Hope
in UncategorizedA look back in time will provide not only context but hope for a better economy. Comparisons of the Great Recession with the Great Depression often lead to a concern that it took World War II to end that depression. As Christina D. Romer writes in “The Hope That Flows From History,” (New York Times August 11, 2011), “what is going to save us today?”
Romer answers that while the war speeded the recovery, the economy was “improving long before military spending increased. More fundamentally, the wrenching wartime experience provides a message of hope for our troubled economy today: we have the tools to deal with our problems, if only policy makers will use them.”
“Monetary expansion was very effective in the mid-1930s, even though nominal interest rates were near zero, as they are today,” say Romer. She takes heart that the Federal Reserve may be using its available tools more aggressively in the coming months as a lesson learned. Another lesson “is to beware of withdrawing policy support too soon. A switch to contractionary policy before the economy is fully recovered can cause the economy to decline again.” Romer points out that reducing the deficit more sharply in the near term could be a crucial mistake. She says, “The lesson here is that fiscal stimulus can help a depressed economy recover” as demonstrated in depression.
Looking at mismatch of skills and jobs then and now, Romer notes that “because nearly 10 million men of prime working age were drafted into the military, there was a huge skills gap between the jobs that needed to be done on the home front and the remaining workforce. Yet businesses and workers found a way to get the job done. Here the lesson is that demand is crucial – and that jobs don’t go unfilled for long.”
Romer’s last point is about the national debt. She says, “At the end of WWII, the ratio of debt to GDP hit 109% — one and half times as high as it is now. Yet this had no obvious adverse consequences for growth or our ability to borrow.” She calls for a bolder approach more like that taken in WWII to solve our economic malaise today. Romer says, “Unemployment of roughly 9% for 28 months and counting is a national emergency. We must fight it with the same passion and commitment we have brought to military emergencies in our past.”