Here’s How We Grow California’s Economy for Everyone
Fighting income inequality isn’t an option, it’s an imperative
California is a place of unparalleled economic opportunity, where high tech comes to take flight, where our creative workforce entertains and connects the world, and where our agricultural products feed America.
Today, our state is the sixth largest economy in the world. Over the past six years, we have created 2.5 million jobs and registered the lowest unemployment rate in more than a decade.
But for too many, our economic recovery has become a spectator sport. California is both the richest and poorest state. Eight million Californians find themselves below the poverty line. Nearly two million children — one in five — live in poverty. We’re witnessing staggering levels of income and wealth inequality.
We need an upward economy that works for every Californian — one that is measured by growth and inclusion. Fighting income inequality and ensuring everyone has the opportunity to succeed is the defining economic challenge of our time, and California must face it head on.
When I was sworn in as Lieutenant Governor in January 2011, California was in the throes of the deepest recession in our lifetime. On day one, I got to work bringing together economists, business leaders, labor leaders and local officials resulting in “California’s Economic Growth and Competitiveness Agenda”, the first statewide economic development plan in over a decade.
Our blueprint offered a path to better infrastructure, a focus on future manufacturing, and plans to build up our exports and expand other pillars of California’s success. But most importantly, our agenda was premised on the foundation that economic growth and innovation will only materialize from the bottom up — in the garages, laboratories, fields and boardrooms across our great state.
What was true then remains true now. Yet we still lack a cohesive vision for economic growth, one that empowers California’s regions to rise together. As Governor, here’s what I’ll do to change that:
- As Governor, I will lead the development of regional workforce and economic development plans. One size does not fit all. The Inland Empire and San Joaquin Valley have unique strengths that differ from Los Angeles and the Bay Area. California must harness its geographic economic diversity and plan accordingly.
- We must break Wall Street’s chokehold on state finance and develop our own state bank. We can invest more in infrastructure, repair our roads, bridges, and airports, provide fair student loans, and build the 3.5 million new homes needed to make housing more affordable through low interest public financing.
- We can’t be pro-job and anti-business. Small businesses need a hand-up. I’m committed to fostering entrepreneurship, cutting red tape and expanding access to capital, particularly for minority and women-owned enterprises. We can utilize our new state bank (along with like-minded community development financial institutions) to provide small business loans and establish innovative micro-lending programs to assist start-up and growth of minority and women-owned firms.
- We need to get serious about ensuring economic justice for all Californians. I’m proud to have been out front on policies that support working families like the minimum wage increase, universal preschool, universal healthcare, and paid sick leave. I’ll always be a fierce advocate for workers, especially low-income folks, women, and communities of color. When it comes to minority and women-owned businesses, we can’t stop at microloan programs — we need to ensure they’re also given fair access to contracting opportunities. We will lift folks out of poverty by rewarding work through a major expansion of the Earned Income Tax Credit. And once and for all, we will achieve equal pay for equal work.
- That commitment translates to the green economy. As we decarbonize our economy, I will consider it a personal failure unless we identify new ways to benefit all communities. Any shift to renewable energy must be leveraged to build economic opportunity.
- Our state is home to a vibrant manufacturing sector, employing over 1.2 million Californians and generating over $270 billion a year. As Governor, we’ll support our manufacturing sector with a plan to boost exports and gear workforce training toward twenty-first century workforce demands.
- We cannot cut our way to prosperity nor can we tax our way to it either. The only answer is to build an economy that reduces inequality and grows jobs. As Governor, I will protect our Rainy Day Fund, aggressively tackle the state’s stubborn wall of debt, and in the aftermath of President Trump’s disastrous tax bill, begin a long-overdue conversation about a twenty-first century system of taxation.
These are all policies we will pursue with vigor but the centerpiece of our jobs strategy must be education. Education, after all, is economic development. California will need 1.1 million additional bachelor’s degrees by 2030 to meet economic demand. If you take associate’s degrees and certificates into account, the number climbs even higher.
I have called for the California Promise, a new way of thinking about education as a lifelong pursuit, because if we’re going to close this massive skills gap, we’ve got to start at the beginning. By focusing on the first three years of a child’s life with increased investments in prenatal services and universal preschool, coupled with college savings accounts for entering kindergarteners, we can link the next generation to higher education and successful careers.
As our children progress through elementary school, we’ll provide “Computer Science for All”. This is an economic and equity imperative, and a fight we can’t cede to states like Arkansas that are well ahead. I’m also committed to expanding broadband infrastructure to close the digital divide, because in 2018, no community in California should lack internet access.
We’ll also tackle the skills gap by offering two free years of community college tuition, creating pathways to quality jobs. Community colleges are one of our most effective tools for upward mobility and as Governor, I’ll make sure they’re the backbone of our workforce development strategy. That means they’ll be a key partner in three related, major jobs initiatives.
First, we will develop transformation maps for every cluster, industry and region of our state to make sure we’re preparing folks for the jobs that actually exist. Working with UC, CSU and most substantively the community colleges, we will overlay industry trends, job availability, and educational data, and then develop relevant curriculum to meet those workforce and skills needs. We’ll also nurture regional and cluster-based collaborations partnering industry, our academic institutions and communities to innovate new ideas and spur economic growth throughout the state.
Second, we will establish 500,000 earn-and-learn apprenticeships by 2029, creating a new vocational pipeline of high-skill workers. In an increasingly global world, apprenticeships provide the education and training necessary to prepare Californians for the jobs of today and tomorrow.
Third, we will provide skills accounts for any Californian looking for work, no matter what stage of life. In today’s rapidly changing economy, our workforce must be able to adapt to new needs and advancements. These accounts, established with the backing of business, labor, and government, will allow Californians to tap into the vast resources of our community college system to help get folks back on their feet. Singapore has done this better than anyone, making these accounts universal for everyone over 25, and doubling credits for anyone over 40.
Something big is happening to the plumbing of the world and we’ve got to lean in. The trendlines of the last 30 years will be the headlines of the next three to five. And it’s not just globalization at play. We are living in a hinge moment — with globalization and technology detonating at the same time, displacing workers and entire industries. It’s not an easy subject to talk about but we need to have a serious conversation about the future of work because if we don’t prepare ourselves, our rising levels of wealth inequality will only widen.
Consider this: In 1990, the revenues of Detroit’s Big Three automakers totaled $250 billion while employing 1.2 million people, according to a McKinsey Global Institute study. By comparison, Silicon Valley’s top three companies in 2014 had almost the same revenues before adjusting for inflation — $247 billion — but with 137,000 employees, they required a workforce just one-tenth the size.
One report has shown that 47% of existing American jobs are at high risk of automation. Another claims that 38% of jobs are at risk of automation as soon as the early 2030’s. There is no silver bullet that will wholly solve the displacement from future technology, but implementing the right solutions can help ease the transition and protect the workers most vulnerable and susceptible to automation.
- The federal government offers reemployment insurance to folks who lose their jobs to foreign workers, but no one is offering this critical protection for those who fall victim to automation. If a hard working Californian who did everything right loses a job, takes the time to train for a new one, and then ultimately lands a position that doesn’t pay as much, we need to offer wage insurance to help pay the bills.
- Our benefits system of retirement, vacation and sick leave was designed for a different era. Meanwhile, there are anywhere between one and two million gig workers in California, folks who depend on independent contracting to make ends meet. We like the innovation of the gig economy but that doesn’t mean we should reduce our worker standards. As Governor, I am committed to protecting the workers of the contingent economy by establishing a system of portable benefits so that earned benefits are not tied to one company or industry. California can be a leader in pioneering the benefits of the future.
- Finally, we need to expand our statewide Earned Income Tax Credit for low-income earners and for those out of work — a program that rewards work and allows families to keep more of their hard-earned money.
I’m not running for Governor to fail more efficiently or play in the margins. Meeting these challenges will take bold leadership, and all of us working together across ideologies and regions. But at the end of day, people from all over the world come to California for the opportunity it promises. Together, we can maintain that promise to future generations and build an upward economy that works for every Californian.