California’s boom times are over

Joanne Butler Contributor
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Warning: if you’re in Sacramento on December 21, you may see lots of gloomy faces. On that day the Census Bureau will announce which states will gain or lose U.S. House seats, and it appears that California will not gain a seat — for the first time in California’s history. It’s another indicator that the boom times are over in the Golden State.

A basic function of the ten-year Census is to determine how many of the 435 U.S. House seats go to each state. Imagine a game board with a map of the 50 states, plus 435 poker chips. The Census determines how many chips (House seats) each state receives. (Each state has two senators — that’s set by the Constitution.)

States with significant growth (Arizona, Texas) are likely to add seats to their delegations; those with stagnant or little growth may lose seats. Expected losers include Louisiana (Hurricane Katrina), New Jersey (Chris Christie says “if you tax them, they will leave”), and my native state, Pennsylvania, which is in the Rust Belt. In the game analogy, the Census Bureau takes a chip from New Jersey, and adds it to the Texas stack.

California’s situation looks paradoxical — how could a state that’s absorbing waves of legal and illegal immigrants (both are included in the Census count) not grow enough to justify adding another House seat? The answer is that some states have had a much faster growth rate — adding many more people than are leaving.

If we use the Census Bureau’s estimates for the April 2000 to July 2009 period as a reasonable predictor of its 2010 headcount, we find the total U.S. population grew by 9.1% — identical to the Census estimate for California’s rate for that period. Now compare California’s utterly average 9.1% to Nevada’s 32.3%, Arizona’s 28.6%, Utah’s 24.7%, and Texas’s 18.8%. Even after factoring in a reduction in relocations due to the housing crisis, I expect California will continue to lag behind these states.

The Rust Belt’s growth rates are the worst: 0.3% in Michigan, 0.6% in West Virginia, 1.7% in Ohio, and 2.6% in Pennsylvania. New Jersey is at an anemic 3.5%.

My birthplace in Western Pennsylvania is an example of what happens when there’s no growth. In the fifties and sixties, the town had a prosperous Main Street with a department store, an ice cream parlor, a movie theater, banks, and a hospital. But as the factories and mines closed, the workers’ children left — forever. The workers aged in their sooty, shingled homes, and when they died, their kids dumped the homes for a quick sale — often to a Section 8 low-income housing agent. The downtown was boarded up, the hospital closed.

Decline is unpleasant to watch — but on the other hand, it represents the power of the American freedom to choose. A happy legacy of the pioneers is the notion that we don’t have to live where our parents live and work where they work, unless we want to. But there’s more: California’s situation demonstrates that a sunny climate and attractive housing are not enough to entice people — jobs are a must.

Victor Davis Hanson’s recent elegy for California’s Central Valley describes a place that resembles my Pennsylvania town. His valley is drier and dustier than my town, but otherwise it’s the same shabby disintegration. The noteworthy difference is what caused these places to decline. My old town failed to adapt to changing industrial patterns and housing tastes — a combination of mistakes by businesses and government. In the Central Valley, Hanson puts the blame squarely on a state government that heedlessly spends, taxes, and regulates — driving productive folk to seek their fortunes elsewhere.

Californians have been living in the rear-view mirror, counting on their state’s climate, culture and former glamour as reasons enough to lure people, no matter how many job-killing laws and taxes they impose. Tuesday ought to be a wake-up call for Sacramento. Will it wake up?

Joanne Butler is a senior economics fellow at the Caesar Rodney Institute of Delaware. You can email her at joanne-butler@comcast.net.