California’s Future: Economy
By many measures, California’s economy is performing well. The statewide unemployment rate is at a long-term low. Jobs have been growing for more consecutive years than is typical. Improvements have occurred across almost all major industries in the state and across California’s diverse regions. These job market improvements are reflected in family incomes, which have picked up substantially over the past few years.
Although major labor market indicators are outperforming long-term trends, Californians are still concerned about jobs and the economy (according to the September 2018 PPIC Statewide Survey). Indeed, if historical patterns are a guide, California may face an economic downturn in the near future. Even if the next year brings continued economic growth, underlying economic realities such as income inequality and the quality of jobs will shape California’s future. As Governor Newsom takes office, income disparities among millions of California families are greater than at almost any point in at least 50 years. Even with full-time employment, many struggle to meet basic needs—and their challenges are exacerbated by the rising cost of housing.
As California’s economy approaches new heights, it is important to recognize that underlying disparities can limit long-term growth. The boom, bust, and recovery cycle typically widens disparities. The new governor faces the challenge of keeping California’s economic engine running at a high level while ensuring its long-term viability by expanding capacity.
This publication is part of a briefing kit that highlights our state’s most pressing long-term policy challenges in 11 key areas: