A man carries a plastic shopping bag on September 30, 2014 in San Francisco, California.
Photo by Kimberly White/Getty

Why California is both liberal utopia and tech boom central

Updated

California has been having a pretty good year.

Parts of the nation’s most populous state have long functioned as progressive havens, but the past few years in particular have pushed a progressive influence across the state as a whole. Under Democratic Gov. Jerry Brown and the current state legislature – which is controlled, in both chambers, by a Democratic supermajority – California this week became the first state in the nation to enact ban on plastic grocery bags, citing environmental concerns. The state’s other recent progressive accomplishments include a 2013 law hiking the minimum wage from $8 to $10 by 2016expanded access to abortion providersstronger legal protections for temporary workers; an unprecedented new gun control regulation; and a ban on the use of “gay panic” defenses to get reduced jail time.

California’s left-leaning governance has led conservatives across the country to bemoan the state’s supposed lack of economic freedom. The conservative business group ALEC (American Legislative Exchange Council) listed Calfornia as #47 out of 50 on its most recent annual economic outlook ranking, citing (among other things) high income taxes and employee compensation costs. Similarly, the libertarian-leaning Mercatus Center identifies California as the second-worst state in the country when it comes to economic freedom. New York came in dead last.

“There have been some pretty important accomplishments on the workers’ side.”
Maurice Emsellem of the National Employment Law Project
Yet while other parts of the country are still mired deep in the fallout of the Great Recession, the Golden State has been setting the pace for economic growth and job creation. In fact, a recent Business Insider analysis found California to have the second fastest growing economy in the United States, outstripped only by Colorado. Another analysis by the left-leaning Center for Economic and Policy Research determined that California led the entire country in the rate of its employment growth between 2013 and 2014, ending that time period with nearly 3% higher employment than it had going in.

“It’s been a pretty remarkable couple of years,” said Maurice Emsellem of the National Employment Law Project (NELP). “There’s plenty that still needs to be done, but there have been some pretty important accomplishments on the workers’ side. That has something to do with Gov. Brown and the composition of the legislature, but it also has something to do with all the organizing that’s been going on in California for a number of years.”

The minimum wage hike and temporary worker bill were just part of a suite of legislation aimed at lifting standards for low-wage workers. Other laws included new healthy and safety regulations, protections against retaliation for immigrant workers, and a law preventing government employers from asking job applicants about their criminal records during the early stages of hiring.

Emsellem said these laws would hopefully ensure the fruits of recovery and economic growth are more widely shared across the state. Right now, California ranks as one of the most unequal states in the country in terms of income.

“What all these reforms are doing is trying to make sure that everybody’s participating in the improvements that are finally taking place in the economy,” he said. “These issues of inequality are holding the economy back if not everybody can participate.”

University of California, Berkeley economist Enrico Moretti was skeptical that the reforms would do much good in the long run. The recent economic growth, he said, “has mostly occurred independent of state politics; you might say despite state politics.”

“The main engine of this recovery is the tech sector in the Bay Area.”
Berkeley economist Enrico Moretti

“The main engine of this recovery is the tech sector in the Bay Area,” said Moretti. “The recovery’s very uneven across the state. There are parts of the state where essentially there are still in recession, especially in the central part of the state.”

But while the state’s left-leaning politics might have little to do with its modest economic boom, it doesn’t appear to be holding it back much either. And some economic observers are a little more bullish about California’s prospects for spreading prosperity beyond the Bay: A recent City National Bank report found that the state’s Inland Empire region in “posted the third highest growth rate of all Californian metropolitan areas” in the second quarter of 2014.

California isn’t just trying to make strides in worker protections: The state has also led for years when it comes to environmental regulations. In 2006, Republican Gov. Arnold Schwarzenegger signed the state’s Global Warming Solutions Act, which among other provisions requires California to reduce greenhouse gas emissions to 1990 levels by the year 2020. The Environmental Protection Agency cited that law favorably when it unveiled its recent proposal to cut power plant emissions across the United States.

“California does a lot, probably more than anyone else,” said Kathryn Zyla, managing director of the Georgetown Climate Center at Georgetown University’s law school. The Global Warming Solutions Act, she said, was intended to act as “an umbrella policy under which the state has a lot of other goals to achieve those reductions.”

Since that bill’s passage, California has passed a slate of other reforms aimed at improving energy efficiency and boosting its renewable energy infrastructure. Last October, Gov. Brown partnered with seven other U.S. governors to encourage the manufacture of 3.3 million “zero-emission” electric vehicles by 2025.

The state has also aimed to encourage adaptation in part through a Climate Adaption Strategy mandated by Gov. Schwarzenegger in 2009. Although Republican leadership has often said that state-mandated mitigation and adaptation measures tend to kill jobs and hikes energy bills, Zyla said California’s experience suggests otherwise.

“California has had energy policy for decades, and there’s been quite a bit of analysis on what those policies have done to the economy,” she said. “They’ve generally been pretty positive.”

Case in point: A report [PDF] from UC Berkeley making the case that energy efficiency measures had actually saved California households $56 billion over three decades. Those savings, according to the report, created 1.5 million jobs in the state.

“They’ve put in place many of these policies that many people fear would have a damaging effect on the economy, and they’ve show their economy will still grow over time,” said Zyla.

California

Why California is both liberal utopia and tech boom central

Updated