Crashing California Needs Infrastructure Injection

The Golden State, despite its nickname, seems to be tarnishing. California, whose mere mention used to invoke all the images of the ultimate land of opportunity; the place to realize your dreams, discover yourself; get discovered; and basically make it, is seeing some pretty difficult economic times right now.Of all the fifty states California has the third highest unemployment rate. And the state holds the record for the longest amount of time a worker, on average, spends living without work: eight long, depressing months.Much of the fuel that had in the past driven the great California economic engine has been depleted. Since 2005 the housing construction industry has taken a nose dive into the abyss. During the 4 year period from 2005 to 2009, permits for home construction crashed by 83%.  Lay-offs of construction workers ran rampant, going from a high of 487,000 working in construction in 2005 to a tiny fraction of that number, 77,000 in 2009. With the expiration date of the federal stimulus benefits now a thing of the past, whatever housing construction it stimulated has come to a grinding halt. The dismal forecast is that we won’t see any improvement anytime soon as homes by the thousands are still entering into foreclosure mode.Manufacturing, another traditionally bright spot in the darkness of previous California economic declines, is not predicted to be a helpful source of guidance out of the present economic morass. Historically, ever since the end of World War II it has been the manufacturing sector that led California in its many recoveries, but don’t expect that to be the case today. Manufacturing is just not enough of a player anymore in California’s economy. Since 1990 the state lost just about one third of all its manufacturing jobs, that’s a whopping 683,500 jobs.And as the private sector of the California economy goes to pot, so to must follow, as night follows day, the public sector. What is missing from the equation that made California so economically successful for almost 50 years post WWII and failing so miserably now? Some experts who have examined the situation and compared the two economic eras point to the huge gap in infrastructure spending as part of the problem and perhaps a key to a beginning of a solution. During the great boom years California governors were not afraid to spend about 20% of their state budgets on infrastructure. Compare that with about 7% spent on infrastructure in the previous 20 years. Spending on infrastructure might be just the injection which can help boost the manufacturing sector to a new life. As more middle income jobs are created, the economy can respond, and hopefully recover to its former glory.

Alyssa Anderson

Alyssa Anderson has been involved in the world of business on several levels for many years. She was the CEO of a start-up high-tech company until its purchase by a global on-line e-business. Alyssa helped formulate marketing strategies for several other companies as an independent consultant, and she has advised local government on methods to achieve appropriate fiscal responsibility. Her opinions are well known through her many editorials which have been published throughout her career in a variety of local and national print media. She has been heard on radio discussing current issues affecting the business community and Alyssa hopes to bring her special brand of commonsense coupled with uncanny insight into her editorial responsibilities as the Business Page editor for Left Justified. Contact Alyssa at alyssa(at)

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