Economics and Population Projections (San Jose, San Francisco: low income, crime, lawyers)

[Jimbo15]

I think any job that can be done collaboratively on line is a job that can be done collaboratively on line in some place with a really low cost of living like India or the Philippines. Why pay California wages when you can get someone in the third world to do it for peanuts.

Government is a task that really isn't easy to export. The one industry where unions are getting stronger is government because the unions provide both money (and votes). As the state's population expands, the size of the state bureaucracy will expand to serve that population. So if the projections are that the state will increase to 60 or 100 million people, Sacramento's population at a minimum will grow along proportionately with the rest of the state's population increase.

Because California has such a large population already and it has a fairly large influx of people from abroad, it will keep growing.

A lot of the bay area and southern California are basically built out. Sacramento is flat stuck in the middle of a huge empty valley.

In theory, the Sac regional blueprint should restrict growth in this area. But growth controls create perverse incentives to undercut them. In theory, Natomas was a flood plain that should never been built upon. But because the land was cheap, the developers came up with a pretext (bringing the Kings to Sacramento from Kansas) to rezone land in a floodplain to create windfall profits for the developer to allow him to buy the Kings and bring them to Sacramento. See also Sacramento's unbuilt freeway map. This is why I have no faith in long term plans because reality has rarely followed long term plans.

IndyRoads.com --- California's independent roads website

In this region, the Politicians campaigns are funded by developers and the politicians like Matsui and Ose are either developers themselves or are involved in land partnerships with developers. When everyone is lining their pockets with money from development, there are strong incentives to permit a lot more development.

When the cold war ended, this area was hit pretty hard by the closing of several military bases. But when the area got cheap enough, it became very competitive in recruiting companies from out of the area. This is why Apple moved to Elk Grove, and there was another computer company at the old Army Depot facility.

This area is much cheaper than it was in 2005. But in real terms prices were much cheaper in the 1990's. Because the local economy is now worse than it was in the 1990's. It peaked at 9% in 1993 vs 12% and still rising right now, I think the economy will be weak for several more years.

Housing Bubble Graph: Sacramento, California inflation-adjusted housing prices
http://www.calmis.ca.gov/file/lfhist/sachlf.xls
http://www.calmis.ca.gov/file/lfmonth/sacr$pds.pdf

So while I think in the short term, there will be more pain and real housing prices will go below lows we saw in 97. When it gets cheap enough, then the area will start being able to recruit employers from out of the region and it will start growing again.

In the long term I think this area is going to grow because there are few physical constraints on growth. Housing uses less water than agriculture (especially rice), so water isn't a constraint. The area is flat surrounded by open space. The bay area is built out, so the place for growth to spread is along 80 and up highway 65. When you look at how fast Natomas, Lincoln and Elk Grove expanded during the boom, you realize this area has the ability to grow very fast. The developers just need to find or put up a candidate who will permit huge developments somewhere. There are enough different jurisdictions in this area to find some city or jurisdiction willing to permit it. If not Yolo, than maybe Sutter County or Placer or Lincoln or Galt or Isleton or Wheatland. Whoever permits its becomes the next boom city.

[NewToCA]

Jimbo (and others), what do you see as the engine driving the growth you mention in your last paragraph?

As you state at the beginning of your posting, non-Government jobs can frequently done anywhere. Based on the projected revenue stream for California, and the recent backlash against social program expansion, doesn't it seem that California state employment may stay flat?

[NewToCA]

Originally Posted by rcclifford

I would like to hear from someone who understands the economic impact of illegals from Mexico and other south of the border countries.

Does anyone know how many will be released from state prisons to re-join street gangs, deal in drugs, etc.?

Do we all agree, they have deeply harmed our state and can we stop putting this back on the federal government who are unable to protect us.

Why don't we hire buses and transport the illegal Mexicans from state prisons back to the Mexican border and let their government deal with them?

How are we going to prevent them from re-entering our culture and making things that much worse?

Does anyone have statistics of how many illegals are in our state prisons?

I don't know the answer to the illegal alien question, but I have seen estimates in the 10-15% range for the overall state. From the framework of this discussion, I don't believe they will be a future growth factor in metro Sacramento.

[Jimbo15]

Originally Posted by NewToCA

Jimbo (and others), what do you see as the engine driving the growth you mention in your last paragraph?

As you state at the beginning of your posting, non-Government jobs can frequently done anywhere. Based on the projected revenue stream for California, and the recent backlash against social program expansion, doesn't it seem that California state employment may stay flat?

Population growth is driven by three factors. Immigration from abroad, domestic migration (people moving in vs people moving out) and by the rate at which people are forming families and having kids in excess of the death rate.

The quote that was cited in the Guardian article is true but misleading. Yes there is more domestic migration out of California than into California, but that has been going on for a while, still the state continues to grow.

These are the four biggest population centers in the state. LA, SF, SD and Sac. In the past 10 years, only Sacramento has been a net receiptent of domestic migration.

Los Angeles-Long Beach, CA MSA Population and Components of Change
San Francisco-Oakland-Fremont, CA Metropolitan Statistical Area (CBSA) Population and Components of Change
San Diego-Carlsbad-San Marcos, CA Metropolitan Statistical Area (CBSA) Population and Components of Change
Sacramento, CA MSA Population and Components of Change

If you look at the overall state population it continues to grow. Even in a very rough economic period, the state grew by about 400K people last year.

http://www.dof.ca.gov/research/demog...%20Version.xls

What is starting to constrain the growth of the states congressional delegation is the law of large numbers. To gain congressional seats in reapportionment, you need to grow faster than the country overall. During the post war boom in the fifties, California added 3.7 million people for at an annual growth rate of 4.7%. Between 1990 and 2000, California actually added more people growing by 4.1 million people. But because the overall population base was so large, this growth was now only a 1.3% annual change.

California Population by Decades

In the midwest, what restrained population growth was international migration patterns changed. There was a time when Pittsburgh, Detroit, Cleveland were all hubs for migrants looking for work in factories in the midwest. But migration patterns changed. As the factories closed, the immigrants stopped moving to the midwest. But you still had fairly high rates of domestic out migration to the South and West as air conditioning made living in places with nicer climates more appealing.

In the late sixties, there were race riots in both Detroit and LA. In both cities you had white flight. In LA as the whites fled the city, the Latinos and the Asians took their place. In Detroit and a lot of cities in the midwest, the populations of the old cities just fell.

The biggest reason I think the population of the state will keep growing is that the wage differential between the US and Central America is still substantial and we have no effective control of the borders. If you can make 6 times as much in the US as in Mexico, a lot of people are going to cross the border, especially when the border is as porous as it is. It is very easy to be hispanic in Southern California. You have all kinds of Mexican stores, restaurants, radio station, tv stations, newspapers and magazines. If you are going to move to the US to find work, Southern California probably involves the least amount of culture shock of anywhere in the country.

For a lot of immigrant populations, the largest concentration of immigrants in the US is in southern California. If you are Armenian, Thai, Persian, Korean, Laotian, Vietnamese, Japanese the largest population of native speakers and the place you are most likely to find a relative to help you out when you get here is probably somewhere in Southern California.

Sacramento's population is derivative of the overall states growth. The need for state government is a function of the size of the state. If the state is continuing to grow, than the need for state government will grow alongside that. A lot of the coastal areas are built out. The city of SF can only increase its population by growing more densely. But given that you need to tear something down to built more densely, that type of growth will be slow and expensive (nimbys are more effective than cows at stopping growth in there neighborhoods) Instead, a lot of that growth will be directed inland where there is just a lot more open land. In Southern California, Santa Monica and Santa Barbara aren't adding that many more people, but San Bernadino and Riverside are growing like Vegas. Functionally, Sacramento, Stockton and Modesto are to the Bay Area, what Riverside and San Bernadino are to Southern California.

Don't get me wrong, there are deep structural problems in California. I just think the author of the article in the Guardian identified the wrong set of problems. When it comes to people with college educations, this state is exporting more college graduates than it is producing. Outside of the Bay area and a few parts of Southern California, a lot of the immigrant population is very poorly educated and these populations are not acculturating well.

In 2006, the illegitimacy rate for Hispanics was 49.9% and 70.7% for African Americans. Compare that with 26.6% for whites and 16.3% for Asians. Note also that this rate is increasing (see pg 6 here).

http://www.cdc.gov/nchs/data/nvsr/nvsr56/nvsr56_07.pdf

Given that there are more Hispanic and African American children being born in this state than White and Asian children, this is the big long term problem.

http://www.dof.ca.gov/research/demog...7%20Tables.xls

On a lot of statistical measures, the immigrant populations aren't doing well, its not just illegitimacy rates, but high school graduation rates, criminal activity, etc.

There is a lot of happy talk about diversity that we have merged into national myths about immigration, but when the poor people are staying poor and its easy to identify this group by race, issues of class become racial issues. It would be great if we let in the huddled masses and like Horatio Alger novels they pulled themselves up to succeed. But in practice its is a slow process that seems to require several generations. The question is should we continue to let in the huddled masses who enter in as the underclass or just the smart people who would diversify the upper classes?

In the 60's the African American population was not acculturating well and we had race riots in a lot of cities.
In the 90's we again had the Rodney King riots. Clearly in one generation, this society isn't able to advance a large poorly acculturated population. While there has been some success in the African American population there has also still been a lot of failure.

But the African American population was basically about 10 to 15% of the population. What I worry about is what happens when the combined African American and Hispanic population is above 50% in California and what if that population becomes a vast underclass (like I suspect it will)?

Does this state become another Detroit or New Orleans in that situation?

[NewToCA]

According to your attached spreadsheet, it appears that the vast majority of the growth rate was Hispanic. Indeed, they accounted for about 75% of the growth from the years analysed in the chart, 2000-2007, with almost all of the remainder of the growth being from those of Asian descent.

The chart does end at 2007 though, and I wonder if the vast economic changes since that time may alter some of those population trends downward in California. For example, the unemployment rate in the Central Valley is very high, especially towards the lower part of the state where farming is a major employer. When driving through the region a few times, I've noticed that the decision to stop pumping much of the Delta water south through the Central Valley has caused farms to cut down much of their production plants or trees. It leads me to wonder if this may cause an outward migration of a significant Hispanic population that generally comes to the California area for jobs in farming or construction, two of our most devastated industries.

[Jimbo15]

The agricultural communities in California have some of the highest levels of unemployment in the state (and probably the nation). For instance unemployment in Sutter/Yuba counties is 16.1% and that is down from 16.7% the month before.

http://www.calmis.ca.gov/file/lfmonth/yuba$pds.pdf

Now that number seems really high and it is. But the agricultural parts of the country have always had pretty high unemployment. At the peak of the housing boom unemployment in this area never got below 7.5%. When we aren't having housing booms or starting new wars (its big military area as well) unemployment in that area is historically usually over 10%

http://www.calmis.ca.gov/file/lfhist/yubahlf.xls

If you look at an even more agricultural dependent community like Imperial County the situation is even more dire. Unemployment there is 28.7%, down from 30.5% the month before.

http://www.calmis.ca.gov/file/lfmonth/ecen$pds.pdf

But the historic numbers are even worse. When the housing boom hit California, unemployment there never fell below 15%. For most of the 90's unemployment there was above 25%

http://www.calmis.ca.gov/file/indhist/ecen$haw.xls

Too me this data says several different things. First people with limited options are willing to put up with a lot before they will move. While life it tough in the agricultural parts of California, I suspect that its even tougher in the agricultural parts of Mexico. If you can only find seasonal ag work in California and Mexico, it still may make sense to stay in California if the pay for that seasonal work is better here than in Mexico. While things are bad in California, if things are even worse in the place you are trying to escape from, then people will keep moving here even if it is tough to find work right now. So while unemployment is bad in the cities of California right now, its better than in the rural areas and better than it is in Mexico, so I think people will still keep coming here. As long as things are less screwed up in California than in Mexico and wages are still higher here, people will immigrate here.

Second despite any smart growth plans like the Sacramento regional Blueprint, the politicians in the rural areas are going to be under tremendous political pressure to allow new housing developments in there areas to bring in new construction jobs to diversify the local economy and help remedy destitute local economies.

Yuba and Sutter Counties share a border with Placer County. Right now unemployment is 11.5% in Placer County, that is a full 4.6% less than in the Sutter/Yuba region. If you look at historic unemployment rates, generally unemployment in Placer County has been under 5% - so there is about a 5% structural unemployment difference between Placer County and Yuba/Sutter Counties.

http://www.calmis.ca.gov/file/lfmonth/sacr$pds.pdf

http://www.calmis.ca.gov/file/indhist/placehaw.xls

Essentially the most politically expedient way to narrow the structural unemployment rate in those counties is to permit development up the highway 65, 70 or 99 corridors to make them act economically more like Placer County than Yuba or Sutter Counties. If you are a politician in these communties do you care if infill development promotes smart growth and walkable neighborhoods in Sacramento?

[Tiger Beer]

Originally Posted by rcclifford

Why don't we hire buses and transport the illegal Mexicans from state prisons back to the Mexican border and let their government deal with them?

Since they aren't guilty of anything in their own country, then there is nothing Mexico can do to 'deal with them'. They're basically free.

[Ludachris]

Originally Posted by rcclifford

I would like to hear from someone who understands the economic impact of illegals from Mexico and other south of the border countries.

Does anyone know how many will be released from state prisons to re-join street gangs, deal in drugs, etc.?

Do we all agree, they have deeply harmed our state and can we stop putting this back on the federal government who are unable to protect us.

Why don't we hire buses and transport the illegal Mexicans from state prisons back to the Mexican border and let their government deal with them?

How are we going to prevent them from re-entering our culture and making things that much worse?

Does anyone have statistics of how many illegals are in our state prisons?

Not all illegals are drug dealers and gang bangers, nor do they come here to live the life of hardened criminals, but I can see your point. The problem is the issue isn't so simple to fix (at least not when trying to be reasonable and humane) and most simple solutions, like mass deportation, could easily result in unplanned negative consequences.

When immigration laws aren't enforced for years/decades we end up with gray areas. The bottom line is, we need to start enforcing the laws and taking away the incentive or the illegal immigration problem will never go away. It's clear that the capitalistic nature of our society is partly to blame for there being no cut and dry solution - some people/businesses benefit from illegal immigration (cheap labor). If that weren't the case the issue would have been fixed long ago.

How does this play in to Sacramento's future growth? Who knows. The politicians don't want to touch it. Businesses don't want it fixed. And there don't seem to be a whole lot of good solutions that take every aspect of the issue into consideration. You've got some wanting extreme actions taken and others who want less severe action to be taken. And lately, it seems Americans are much less willing to compromise on anything politically than ever before, so who knows when a real solution will ever make it through.

[NewToCA]

I agree that the counties surrounding Sacramento would welcome any growth, and the economics associated with that growth. I know from past places I have lived that they are always excited to get retail development, and the tax receipts associated with that development. You can't have that without the people moving out to those locations though.

Guess we'll see, mark me down as a bit skeptical about the underpinnings of jobs to support this growth though.

[Ludachris]

Originally Posted by NewToCA

I agree that the counties surrounding Sacramento would welcome any growth, and the economics associated with that growth. I know from past places I have lived that they are always excited to get retail development, and the tax receipts associated with that development. You can't have that without the people moving out to those locations though.

Guess we'll see, mark me down as a bit skeptical about the underpinnings of jobs to support this growth though.

I think the whole telecommuting culture needs to catch on a little more. I understand not all people can work efficiently from home, and it also creates a number of other issues for businesses (including security) but it sure would open up a lot of opportunities for both employers and employees. If more people in the Bay Area weren't tied to their jobs, I'd imagine they'd move out to surrounding areas like Sacramento - which would still be close enough to go in for weekly or monthly meetings.