Excerpted from a March Brookings Institutional column by Joel Kotkin and William H. Frey.
For most Americans, California evokes coastal images, the sunny beaches or the spectacular urban vistas of San Francisco Bay.
Yet within California itself, the state’s focus is shifting increasingly beyond the narrow strip of land between the coast and its first line of mountain ranges.
This interior region,which we define as “the Third California”,extends from the outer suburbs of Southern California to the foothills of the high mountains of Northern California. It covers a vast and diverse series of places, from urbanized areas such as Sacramento, to great suburban regions to some of the most fertile agricultural land in the world.
To a large extent, what defines the Third California is how it contrasts with the increasingly congested, expensive and physically hemmed in coastal region.
Virtually all the fast-growing regions of the state, from Riverside-San Bernardino to the burgeoning suburbs around Sacramento, are in this area.
Yet not much commentary about the Third California is positive. To some, this region represents an increasingly failed geography, a place of rising poverty and environmental and aesthetic ugliness.
The Central Valley has been described as a product of “malign neglect,” shifting from an agricultural cornucopia into “an almost unbroken chain of smog-choked cities and suburbs.”
A widespread notion exists that the skill levels and economies of this vast area are marked by permanent underdevelopment and undesirable jobs.
Insofar as there are significant gains in educated migration to the Central Valley, argues one report, it is because people still commute to jobs in the coastal region, where the vast majority of good jobs are.
Such assessments all contain elements of truth but often ignore the more dynamic aspects of the region’s demographic and economic growth and its potential for positive change.
Along with its growing urbanized character, much of the Third California is building more diverse job growth, while developing urban amenities and a greater appreciation of the need to preserve its natural environment.
Most importantly, the Third California remains perhaps the greatest untapped outlet for upward mobility in the Golden State. In some senses, this reflects as well the difficulty of wealthier areas,such as First California’s San Francisco Bay area and, to a lesser extent, coastal Second California in the south,to provide new jobs and opportunities, especially opportunities for homeownership.
Some of these areas, notably the San Francisco Bay, may well be content to continue as relatively high-wage, high-income regions without any further population or even job growth, preferring essentially to remain in a kind of socioeconomic steady state.
This has been defined by one economist as “growth without growth.”
Although this may work in metropolitan areas such as Boston that have a stagnant, rapidly aging population, it is difficult to imagine amid the demographic force of a state like California, whose population is expected to grow substantially over the coming decades.
Even policy experts in California often fail to see this critical distinction between an aspirational economy and an aging, albeit affluent one.
Relatively low incomes are certainly a problem, particularly in parts of the San Joaquin Valley, but more consideration needs to be paid to the impact of the Third California’s much higher rate of family formation, as well as lower cost of living.
The future of the Third California remains critical not just an issue for the interior, but on the overall evolution of the entire Golden State. We recommend a three-pronged approach for the area to reach its potential:
– Appeal to Skilled Labor and Industries
The movement not only of capital and companies, but, more importantly, skilled labor from the high-cost coastal areas has been evolving for over a decade. Recent demographic and economic evidence suggests this process picked up considerable momentum in the early 2000s, largely due to the combination of high house prices and changing economic conditions in the coastal counties, particularly the Bay area.
– Deal with Homegrown Problems
Efforts to bring companies and talent to the Third California will be of limited effectiveness if there is no concerted attempt to deal with the entrenched problems stemming from the region’s past. For the most part, the Third California is not like a greenfield suburb in the middle of the desert; it possesses a profound historical legacy, built on agriculture, which must be confronted.
– Build on Optimism
Despite these challenges, there is much room for optimism for the future of the Third California. Higher-end businesses and skilled workers are beginning to come in as affordability rates along the coast drop to record lows. In many places it appears that the historic “brain drain” of educated people out of the region can be not only stemmed, but eventually reversed.
Ultimately the answer lies in comprehensive economic development, including education and worker training on one hand, and the nurturing of an infrastructure that can accommodate growing industries.
Most important of all, many people in the Third California believe that the future can be better.
A recent poll of Central Valley residents found that 75% of adults rated their community as excellent or good. Far more saw it as getting better than worse. Facing tough problems represents part of the Third California’s challenge. But it also would be a mistake not to build on this sense of optimism as a way of enlisting the energies of interior Californians in creating solutions for their regions.
