The big pension fund said it was the fourth time in five years that it has earned double-digit investment returns. CalPERS is still trying to claw its way back from the crippling multibillion-dollar losses of 2008-09, when the housing bubble burst and the financial markets crashed.
Most people will have the impression that the 288,000 jobs created last month were full-time. Not so. . . Full-time jobs last month plunged by 523,000, according to the Bureau of Labor Statistics. What has increased are part-time jobs. They soared by about 800,000 to more than 28 million. Just think of all those Americans working part time, no doubt glad to have the work but also contending with lower pay, diminished benefits and little job security.
The news symbolizes to many, particularly those in politics, that California has completely weathered the worst recession since the Great Depression and is once again leading the nation, if not the world, in economic progress.
That interpretation, however, does not comport with the decidedly mixed bag of what’s really happening in our economy.
On average, California’s economic growth will be far below its potential. In most of the state it will be disappointingly low to dismal, as California’s economy is held back by well-meaning but seriously flawed regulations. At the same time, a few super-performing cities may see spectacular growth, at least for a few years.
What if they gave a recovery, and the middle class were never invited? Well, that’s an experiment we are running now, and, even with the recent strengthening of the jobs market, it’s not looking very good.
On Thursday, Gov. Jerry Brown signed legislation creating a $420 million tax credit for aerospace contractor Lockheed Martin. The bill also includes a clause that could provide a tax sweetener for Tesla Motors, if the company decides to built its planned $5 billion factory in California.
Initial jobless claims fell to near a seven-year low last week in a sign of continued improvement in the labor market.
Today, we have some new extremes. Some of our coastal communities are as wealthy as any in the world. At the other extreme, we have some of America’s poorest communities. San Bernardino, for example, has America’s second-highest poverty rate for cities with population over 200,000.
To be sure, low-tax states such as Texas generally score well, while high-tax states such as California and Illinois flunk their tests. This may be because the kind of politicians who like high taxes also like bossing people around. But not always. Minnesota, a high-tax state, earns a respectable “B” for business climate, partly because it is easy to start a business there. Washington and Florida, both low-tax states, earn a “C” and a “C+”. Entrepreneurs fault Washington’s harsh zoning laws and gripe that in Florida new firms must jump through hoops like dolphins at SeaWorld.
Hundreds of truckers who work at the ports of Los Angeles and Long Beach went on strike on Monday to protest what they called unfair labor practices.
A 4 percent sales tax credit on the sale of manufacturing and research and development equipment has gone into effect in California. The credit will last eight years.
A higher minimum wage raises wages of low-wage workers, and even though most evidence points to job losses from higher minimum wages, the evidence doesn’t point to widespread employment declines. Thus, consistent with a recent Congressional Budget Office report, many more low-wage workers will get a raise than will lose their jobs. But that argument is about low-wage workers, not low-income families. Minimum wages are ineffective at helping poor families because such a small share of the benefits flow to them.
California’s economy has overtaken Russia and Italy’s, with the state now ranked as the world’s eighth largest economy.
America’s states and cities have traditionally tried to attract businesses by offering them tax breaks and other cash incentives. Yet there may be a more effective way, and one which puts no strain on stretched budgets: make life simpler.
Hollywood’s largest union representing actors and other performers has secured a new film and TV contract that will provide modest pay hikes for its approximately 165,000 members.