As of 2012, 18 of the 20 most heavily Asian communities were suburban, all but one of them are in California. Not surprisingly quite a few are the smaller cities of Silicon Valley, where Asians constitute roughly half of all tech employees. Cupertino, a city of 59,700 that is home to Apple’s headquarters, takes the title of the most Asian city in the U.S., with a population that was 65% Asian as of 2012, up from 45.9% in 2000. Other suburban cities around the Bay that are majority Asian include No. 2 Milpitas (64.5% Asian), Daley City, Sunnyvale, Fremont , Santa Clara and Union City. Of them, only Daley City and Milpitas were majority Asian in 2000.
California has achieved a great deal since 1970, including much cleaner air, water and more effective resource stewardship notwithstanding a population increase from approximately 19.9 million in 1970 to over 38 million by 2014. 2 Nevertheless, the state continues to face significant, and in many cases increasingly adverse educational and social equity challenges.
In the years ahead we can expect these trends to continue, or even accelerate. There is little reason to believe that states like California or New York are going to re-industrialize or reform their planning systems to help reduce housing prices. They will remain increasingly bifurcated between a very well-educated, affluent population clustered around the most elite industries and an underclass of poor, undereducated people. California, for example, ranks 14th in percentage of college graduates, down from 7th in 1970 but in terms of high school non-graduates it has soared from 44th to 2nd.
Given the diminished possibilities of buying a home or finding a decent job in the Los Angeles metropolitan area, Latinos have been flocking to the suburban periphery that encompasses much of adjacent Riverside and San Bernardino counties, also known as the Inland Empire, which ranks second in our survey. From 2000 through 2013, the Latino population in the area soared 74%, compared to a 15% population gain for Los Angeles.
In contrast, the recoveries in the middle part of the country have been, to date, more egalitarian, with incomes rising quickly among a broader number of workers. At the same time, minority incomes in cities such as Houston, Dallas, Miami, and Phoenix tend be far higher, when compared to the incomes of Anglos, than they do in places like San Francisco, New York, or Boston. In these opportunity cities, minority homeownership—a clear demarcation of middle income aspiration—is often twice as high as it is in the epicenters of the ephemeral economy.
In reality, however, California’s path back remains slow and treacherous. California Lutheran University economist Bill Watkins, like other economists, is somewhat bullish on the state’s short-run situation, but suggests that the highly unequal recovery, particularly for the middle class, could prove problematic over time.
In this information age, brains are supposed to be the most valued economic currency. For California, where the regulatory environment is more difficult for companies and people who make things, this is even more the case. Generally speaking, those areas that have the heaviest concentration of educated people generally do better than those who don’t.
Driving just got a lot cheaper in America. The timing is great not only for American consumers, but also for America’s infrastructure. The Highway Trust Fund simply can’t keep up current spending levels without more revenue. Significant declines in pump prices have presented an excellent opportunity to raise the federal gas tax, while keeping pump prices lower than initially anticipated.
You are on your own, Southern California businesses, and can count on very little help, and, likely, much mischief, from Sacramento and various lower orders of government. To find a way out of stubbornly high unemployment and anemic income growth, the Southland will need to find a novel way to restart its economic engine based almost entirely on its grass-roots business, its creative savvy and entrepreneurial culture.
Southern California, like the rest of America and, indeed, the higher-income world, is getting older, rapidly. Even as the region’s population is growing slowly, its ranks of seniors – people age 65 and older – is exploding. Since 2000, the Los Angeles metropolitan area population has grown by 6 percent, but its senior population swelled by 31 percent.
. . . California, once the exemplar of modernity, has among the worst road conditions in the nation, a tenuous, but still extraordinarily expensive, energy grid, as well as an increasingly uncompetitive port structure. Thinking itself a youthful magnet for building entrepreneurs of all kinds – creators of new communities, manufacturing and logistics industries – California is increasingly viewed by other places, both in the country and abroad, as an ideal place to hunt for skilled people, expanding industries and investment capital.
Of the nation’s 52 largest metropolitan statistical areas, many of the top performers have strong tech economies, led by the No. 2 metro area on our list, San Jose-Sunnyvale-Santa Clara, aka Silicon Valley, where real per capita GDP expanded 11.5% from 2010-13. Perhaps more surprising is the strong, tech-fuelled performance of No. 3 Portland-Vancouver-Hillsboro, Ore., where real per capita GDP grew 9.2%. The prime contributor has been the robust performance of late of Intel, the state’s largest private employer, which employs about 17,000 in Portland’s western suburbs around the town of Hillsboro, the company’s largest concentration of workers anywhere. . . Per capita growth in the energy states has been even more impressive. Placing first on our big cities list is Houston-the Woodlands-Sugarland, Texas, where per capita GDP rose 13.2% from 2010-13, a major achievement in a region whose population continues to grow rapidly. Zooming out to all 381 U.S. MSAs, no places come close to the two Texas oil towns that rank first and second overall, Midland (sizzling 38.8% growth since 2010) and Odessa (34.1%).
But today, after decades of expanding property ownership, the middle orders—what might be seen as the inheritors of Jefferson’s yeoman class—now appear in a secular retreat. Homeownership, which peaked in 2002 at nearly 70 percent, has dropped, according to the U.S. Census, to 65 percent in 2013, the lowest in almost two decade. Although some of this may be seen as a correction for the abuses of the housing bubble, rising costs, stagnant incomes and a drop off of younger first time buyers suggest that ownership may continue to fall in years ahead.
A recent Brookings report found that of the regions with the greatest income disparity only one, Atlanta, is located in a red-leaning state. These include San Francisco, Miami, Boston, Washington, D.C., New York, Oakland, Chicago and Los Angeles. The lowest degree of inequality was found generally historically more conservative cities like Ft. Worth, Texas; Oklahoma City; Raleigh, N.C.; and Mesa, Ariz. Income inequality has risen most rapidly in the probably the most left-leaning big American city of luxury progressivism, San Francisco, where the wages of the poorest 20% of all households have actually declined amid the dot-com billions.
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.