Assistant Dean Carson Bruno on the 2016 Election and California's "Flyover" Area | Real Clear Markets
Coastal California Shouldn't Ignore CA's 'Flyover' Area
With Donald Trump's surprising Electoral College victory - 306 to 232 as of November 16 - a lot of focus has been on the angst and anger of voters in so-called "fly over" portions of the country. Regardless of your opinions of now President-elect Trump or former Secretary of State Hillary Clinton, the 2016 Presidential election gave voice to a sizable class of voters who feel either betrayed or forgotten about by our elected leaders.
But sticking out like a sore thumb on the Electoral College map is California. As of November 16, Clinton's strongest state victory is the Golden State. Moreover, Clinton's California margin of victory is the best Democratic Presidential nominee performance since President Franklin Roosevelt's 1936 re-election against then-Kansas Governor Alf Landon. And while she may not reach FDR's whooping 35-point victory, with 4.1 million votes still left to be counted in California, Clinton will definitely pad her 29-point victory in the same state that launched both President Nixon and President Reagan's political careers.
It is no wonder, then, that California Assembly Speaker Anthony Rendon and Senate President Pro Tem Kevin De León issued a joint statement following the November 8 election results saying they "woke up feeling like strangers in a foreign land" and that Americans voted in a manner "clearly inconsistent with the values of the people of California."
While California clearly did reject the political tone and policies of Donald Trump - for instance, Orange County was one of the few counties nationwide to flip from supporting Mitt Romney in 2012 to support Clinton this election year - it may be unwise for California's political leaders, who as Democrats dominate the Golden State's one-party rule, to blithely ignore the clear message many in the country sent to Washington, D.C. - they feel left behind and ignored.
Viewing the inland California (i.e. California's version of "fly over" country) versus coastal California divide forewarns of a possible revolt against the elites here in California if Democratic one-party rule isn't careful and California Republicans can rehabilitate their image.
The Have's and the Have-Not's: Of the coastal California counties, the average unemployment as of September 2016 was 4.8 percent. Moving inland, the average unemployment rate was about 1.5 times higher at 7.4 percent. Even this hides the disparity between the regions. The state's healthiest job environment is in toney Marin County (3.5 percent), while California's worst job environment is in the heavily Latino and heavily immigrant Imperial County (23.7 percent). Moreover, coastal California has boomed out of the recession, while inland California is still limping out of it. Average 10 year GDP growth for coastal California has been almost 2 percent per year versus just 0.6 percent per year for their inland neighbors. And these realities directly impact Californians pocketbooks. Based on Tax Year 2013 data, the average adjusted gross income for those living in coastal California is almost 2 times higher than those inland - $33,176 compared to $18,613.
A Not-So-Welcome to (Coastal) California: The above might not be such a detrimental issue for many if there were barrier-less ways to move from inland California to the coastal communities; but that is far from the case - the barriers are indeed quite high. First, coastal housing prices are at 91% of their pre-recession peak averaging just over $677,000. This is in stark comparison to inland California where housing prices are still a quarter below pre-recession levels averaging just under $300,000 - more than half the cost of coastal California. But even renting - long considered the "affordable" option - isn't actually an option for most: coastal rents are almost twice the level of inland rents. But even if an individual or family bites the bullet and absorbs the higher cost of living into their budgets, they soon will realize that all goods and services are more expensive in coastal California. There is about a 15 percent premium on goods and services in coastal California compared to the national average. For inland California, it's a 2 percent discount relative the nation as a whole.
At the end of the day, coastal Californians not only have more job opportunities, but those opportunities pay more. And they are sheltered from others since the barriers to entry are high and tenuous. The more California policy reflects the wants and wishes of coastal California, the more likely those living inland will feel left behind or ignored. And 2016 showed that when public policy forgets about the public, unpredictable events can occur.