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Ten Trends to Watch

Loren Kaye
President of the California Foundation for Commerce and Education

California politics and governance enter a new era in 2013. The state’s economy is finally recovering and the political landscape has been reseeded. Here, in no particular order, are ten stories or trends to watch this year:

1.    Economic recovery in the interior. The coast is getting healthier, from San Diego to the Bay Area. Will the Central Valley, Inland Empire and northern California continue to be left behind?

2.    Which way manufacturing? Showing strong signs of life elsewhere in the country, the manufacturing sector is still slipping in California.
3.    Defense industries under the gun. A looming sequester and budget cutters headed to the Pentagon may spell an even lower military and procurement profile in California.

4.    The economic recovery leading to both increased foreign immigration to California and less domestic migration from California.

5.    Public sector union belligerence, as ballot victories, new taxes and rising expectations of more revenues inspire government workers to up their demands.

6.    More erosion of private union membership as recovering businesses (those that choose to remain here) hire nonunion workers.

7.    Flat real compensation for workers resulting from higher payroll taxes and health care premiums.

8.    How any public policy changes in education considered by the Legislature will affect actual student outcomes and preparation, as opposed to school inputs (which tend to affect adults).

9.    Fissures in the Democratic legislative caucuses as skeptics of “overreach” battle against incrementalists, especially over increasing taxes or taxing authority.

10. Demonstrable progress in improving California’s competitiveness for new investment and business expansion.

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