But regional and demographic disparities also loom large in California’s labor markets. Mirroring national trends, job growth in California has been unevenly distributed, with nearly 70% of job growth from 2010 to 2018 concentrated in the coastal areas around Los Angeles, San Diego and San Francisco. And while Latino Californians make up roughly 40% of the state’s population, about 50% of them make $15 per hour or less, and many live in low-growth rural areas.
To counter these trends, Newsom has launched a new Regions Rise Together initiative, which will convene regional leaders to create a comprehensive plan for developing all parts of the state. To jump-start the plan, the state government will establish offices in the Central Valley, Inland Empire, Central Coast and North State to help develop key sectors tied to regional economies (for example, wood products in the northern forested counties).
With the federal government paralyzed by Trump, policy innovation in the U.S. now depends on the states. In this sense, California Capitalism is not about the Golden State alone. It is about reviving the American Dream.
Laura Tyson, a former chair of the U.S. President’s Council of Economic Advisers in the Obama administration, is a professor at the University of California, Berkeley's Haas School of Business, a senior advisor at the Rock Creek Group and a senior external advisor to the McKinsey Global Institute.
Lenny Mendonca is chief economic and business advisor and director of the California Office of Business and Economic Development.