America’s golden state losing some gloss

Press, 20 August 1983, Page 16

America’s golden state losing some gloss

From

JOHN HUTCHISON,

in San Francisco

California will continue to attract population and outpace the nation in economic growth, according to a study by a leading “thinktank" in San Francisco. New Zealand traders with an eye on California will find in the report solid assurance that the state will grow in market importance to those who deal skilfully. The Center for the Continuing Study of the California Economy produced an analysis for the period between now and 1991 which predicts a rise in the population to 29 million — four million more than the present total. However, it expressed two serious concerns about a recent sagging in the quality of life in the state, which for more than a century has been a magnet drawing Americans from other states, as well as foreigners from other lands, across its borders in an unending flood. The report’s implied warning is that “California, Here I Come!” is still a valid reflection of the world’s enthusiasm, but may weaken in the face of curtailments already affecting the good life of the Golden West. The study said that California would outperform the rest of the nation, but it warns that the state has slipped in relation to 7 other states in its maintenance of education and physical facilities such as roads, schools, parks, and water and sewage systems. Once a leader in generosity toward its schools, the has

fallen to the bottom of the list in expenditure per pupil. Its roads, parks, libraries, water and sewage systems, public health and welfare services are all pinched by severe fiscal reforms and inadequate revenue.

“The late 1970 s and the 1980 s have provided a difficult environment in which to maintain this (public service) investment,” said the report. “Inflation and recession following deep cuts in property taxes and tax indexing have put strains on local and state government budgets.” Mr Robert Arnold, director of the centre in Palo Alto, a San Francisco suburb, called the decline “the central question for the 80s.” A second question, he said, was whether population growth could be efficiently located in the state to maintain life quality and the environment.

Populations continued to crowd into already congested areas, and only the interplay of private interests and local governments determined the location of housing, new jobs and commercial activity. However, even with the perceived constraints that might affect California’s economy, the centre forecast good times ahead for the state’s industry and employment. Of foremost interest to foreign traders may be the study’s prediction that 2.5 million new jobs will be created in California by 1991. A New Zealand exporter might wish to ponder the implications ofysuch

a figure. The increase in the number of new wage earners alone in this most populous American state will approach the total population of New Zealand. Another measure of the state’s immense economic strength is its gross product, which usually places it at about eighth in the ranking of nations of the world.

Much of California’s attraction for traders lies in the appetites of its relatively opulent consumers. Their disposable income and their tastes and opportunities for entertainment, recreation, avocations and material possessions make them rewarding customers for gourmet foods, leisure clothing, sports gear and special accoutrements of motoring, boating and comfortable housing.

The study said that high technology jobs would be the fastest growing category, even while non-high-tech manufacturing in the state will outrun national performance.

More than two million new households will be formed. Hispanics, blacks and Asians will make up 60 per cent of the state’s population growth, affecting consumer habits significantly, especially in foods, beverages and household items. The buying power of the state in the period will be impressive. “By 1991,” said the study, “per capita income, measured in 1982 prices, is expected to exceed $15,300 per capita.”