Pessimism over economy could have broad political implications - Capitol Weekly

2 months ago Capitol Weekly


An increasing number of Californians are pessimistic about what 2023 holds for their economic future, the Public Policy Institute of California reports.

According to a statewide PPIC survey, 69 percent of those polled – 71 percent of likely voters – say bad times lie ahead. That represents a pessimism jump of 12 percent since April of last year and 17 points from November of 2021.

“It is noteworthy that majorities across partisan groups, regions of the state, and demographic groups are pessimistic in their CA economic outlook for 2023,” said Mark Baldassare, the PPIC’s Miller Chair in Public Policy and Statewide Survey Director in an email to Capitol Weekly.

“Moreover, solid majorities are also pessimistic about the CA economy for the next five years,” Baldassare added.

The Central Valley appears to be the most pessimistic area of the state, with 75 percent feeling gloomy about 2023’s economic prospects. Next came Orange County/San Diego with 73 percent and then the San Francisco Bay Area with 66 percent.

“Moreover, solid majorities are also pessimistic about the CA economy for the next five years.”

A majority of those in the November poll said that at least one member of their household is driving less because of gasoline prices; one-third of those polled say they have cut back on food.

Does California’s gloom about 2023 have the potential for a political shakeup?

Baldassare thinks so.

“These negative economic attitudes have political implications as candidates begin to plan for the 2024 election,” he said. “They have demographic consequences as one in four residents are considering leaving the state because of the lack of well-paying jobs.”

California’s population is indeed declining. The resident population stood at 39,029,342 in July 2022, a decline of more than 113-thousand since July 2021 and down more than a half-million people since July 2020.

Additional findings:

Seventy-nine percent of those polled say the availability of well-paying jobs in their area is either somewhat of a problem or a big problem. The unemployment rate in California was 4.10 percent in November of 2022, according to the Federal Reserve. The unemployment rate in California reached a record high of 16.10 percent in May of 2020 and a record low of 3.80 in September of 2022.

One in every four say the lack of well-paying jobs is making them or members of their family seriously consider moving out of California.

But at the same time, nine out of 10 respondents are at least somewhat satisfied with their jobs. Workers with annual incomes of less than $20,000 are less likely to be satisfied with their jobs (27 percent very satisfied 49 percent somewhat satisfied).

A heavy majority of respondents (73 percent of adults and 68 percent of likely voters) across party lines approve of government policies aimed at increasing housing affordability for lower and middle-income Californians. The political party breakdown was 80 percent of Democrats in favor, 70 percent independents and 56 percent Republicans.

One in every four say the lack of well-paying jobs is making them or members of their family seriously consider moving out of California.

Seventy-six percent of likely voters believe the gap between rich and poor Californians is growing; 71 percent believe state government should be doing more to address the divide. It is here that the party divide appears even starker: Democrats favor government action by 83 percent, independents by 69 percent and Republicans by 45 percent.

The PPIC says the survey was based on responses from 2,307 Californians, with a sampling error of plus or minus 3.3 percent and took place Oct. 7-21.

Other research has backed up the PPIC findings. Compared with 2021, the San Francisco Bay Area showed a 16 percent decline in home building permits from the start of last year through November, according to the U. S. Census Bureau.

Then there is inflation, an always-dependable source of state budgetary gloom.

The Legislative Analyst’s Office had this to say:

“For the many state programs that do not adjust automatically, (to inflation) appropriations are fixed at their existing level. Unless the Legislature appropriates additional funds, higher inflation itself does not cause the state to spend more. From a policy standpoint, however, higher inflation erodes the state’s purchasing power. This presents the Legislature with a conundrum. Absent a change in the appropriated level of funding, high inflation will result in a lower quantity or quality of state services than what the Legislature initially intended. Yet, to the degree that the Legislature were to offset this erosion with supplemental appropriations, it would exacerbate the deficit problem estimated in our fiscal outlook.”

There is a bit of happy news, however.

Researchers for the SmartAsset organization looked at 164 of the 200 largest cities in the U. S. and declared that Sunnyvale is the happiest city in the nation. In fact, six of the top 10 are in California. The happiness score is based on such factors as personal finances of the city’s residents, “well-being” and “quality of life.” Fremont came in at No. 4, Sacramento suburb Roseville was No. 7, San Jose No. 8, Santa Clarita in Los Angeles County was No. 9 and Irvine was No. 10.

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