Oct. 3 (Bloomberg) -- Republicans, take note: California’s sluggish economic recovery makes it a target for future electoral gains.
I base this seemingly delusional assertion on the fact that the state’s residents are deeply pessimistic about their economic future, according to a recent poll taken by my colleagues and I at Stanford University’s Hoover Institution. Given California’s status as a one-party state (Democrats hold a supermajority in the legislature and every statewide elected office), that gives Republicans an opening they can and should take advantage of.
For the last several years, California has been an exemplar of “blue state” governance. Voters approved $6 billion in annual income tax increases in 2012. State spending in 2013-14 will approach $100 billion. And businesses labor under increasingly restrictive environmental regulations -- spearheaded by a law to combat global warming -- which are slated to significantly increase electricity costs.
But these policies have resulted in economic failure. Nine of the 15 metropolitan areas with the highest unemployment rates in the U.S. are in California. Almost 1 in 5 residents are unemployed, or working part time but want full-time work, or have simply given up looking for a job. And California’s real gross domestic product was actually less in 2012 than it was in 2008.
Californians are well aware that their state is headed in the wrong direction. The Hoover Golden State Poll, administered in early September, asked 1,000 people about their confidence in the economic state of the state, as well as their views on a number of energy and environmental issues. The results reveal a deep pessimism about California’s economic recovery -- and about where the state is headed.
About twice as many Californians told us they were financially worse off during the last year as said they were better off. And the outlook is grim. A strong majority of those polled -- 73 percent -- conclude that their families will be either about the same or worse off financially in six months. And almost three times as many Californians told us that they were “not at all confident,” as opposed to “very confident,” in their ability to afford retirement in the state.
A good deal of this pessimism is focused in the job market. While the national unemployment rate declined from 7.6 percent to 7.3 percent from June to August, the unemployment rate in California actually rose from 8.5 percent to 8.9 percent.
We asked respondents to tell us how confident they were that they could find a new job in California over the next six months that paid as much as their jobs today. One-third of respondents told us that they were “not at all confident” that they could find such a job, with an additional 22 percent saying that they were “somewhat unconfident” in their ability to find a similarly paying job.
An interesting trend in the data relates to how Hispanics think about California’s economic recovery. Their opinion is crucially important because they will be the largest single ethnic group in California by the end of the year. We found that Hispanics are just as, if not more, likely than whites to think that the state’s economy will leave their families worse off in six months and that they will be unable to find a similarly paying job. Hispanics are also less likely than whites, blacks or Asians in California to be confident that they can afford retirement in California.
There’s one thing that almost all Californians agree on: State tax rates are headed up. Almost 75 percent of respondents think that state taxes will either increase a little or a lot over the next three years. Those trends remain largely consistent across race, sex, party identification and level of education. And more than half are either somewhat unconfident or not at all confident that they will be able to pay these higher taxes while meeting their other expenses.
What can we learn from these results? First, pessimism in the status of California’s economic recovery runs deep and wide, creating policy opportunities for Republicans and the few centrist Democrats still left in the state. That many Californians express concern about the affordability of their retirement in the state, for example, suggests that dealing with issues such as rising health-care costs, ever-increasing energy expenses and the state’s high tax burden are all potential winners. Furthermore, a targeted set of policies to jump-start job creation (and to highlight the ways that Governor Jerry Brown and his allies in the legislature have fallen short) would also speak to the economic angst we saw in our poll.
Second, there may be an opportunity for Republicans in particular to connect with Hispanic voters in California. Although we found a lack of economic confidence across the board, the poll results were especially pronounced among Hispanics. On paper, California Republicans have the right economic message to appeal to Hispanics, particularly those in parts of the state still suffering from unemployment rates as high as at the peak of the recession.
Unfortunately, continued inaction on immigration reform in Washington blocks Republicans’ ability to communicate on pocketbook issues. We know this because during last year’s presidential campaign, Republican nominee and former Massachusetts Governor Mitt Romney had an economic message that should have appealed to Latinos, who faced significantly higher unemployment rates than whites during President Barack Obama’s first term in office.
Yet Romney was unable to break through with his emphasis on economic growth because Latinos fundamentally didn’t believe he was interested in fixing our nation’s broken immigration system. Republicans have an opportunity now to repair this broken image, and to help make Latinos more receptive to our economic message. Although it appears highly unlikely at this point, House Republicans would give Golden State Republicans a big boost if they would pass immigration reform legislation similar to what the Senate passed earlier this year.
Finally, Republicans need to stay on the political offensive to be successful. With this much pessimism and doubt about the economy, they should be reminding voters at every turn that it doesn’t have to be this way -- and Republicans have an alternative, optimistic vision to make it better. Democratic supermajorities in the legislature, a Democratic governor and Democratic statewide officeholders have presided over an economic recovery that is precarious at best. They should be made to pay for it in the 2014 elections.
Our poll results suggest that Republicans have real opportunities to make gains in California. The key will be whether they can propose policies that resonate with those who feel that their economic futures are at risk in the state.
(Lanhee Chen is a Bloomberg View columnist and a research fellow at the Hoover Institution at Stanford University. He was the policy director of Mitt Romney’s 2012 presidential campaign. Follow him on Twitter at @lanheechen.)
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