California needs to get on the job recovery on-ramp

Earlier this week, I testified before the Assembly Jobs, Economic Development and the Economy Committee in support of AB 29 by Assembly Speaker John Perez. AB 29 would create a state economic development entity within the governor’s administration and has the potential of being the most significant piece of legislation in the last ten years. It could create the structure to jump start California’s job creation machine. But we have to get it right.

The new office must have the full support and authority of the Governor and its leader must have cabinet level status. Anything less would send the signal that economic development was not a high priority for California or for the administration. I learned on a recent trip to Austin, Texas that Governor Perry is the quarterback for his state’s economic development team and demands that every state agency participate in protecting and enhancing the climate for job creation and economic growth.

California needs a plan, too. Every politician in the Capitol will enthusiastically say their top priority is job creation, yet California lacks a clear vision for how to go about the task.

The leader of California’s new economic development agency’s first task should be the creation of a long term economic development strategy including long and short term job creation goals.

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Nothing makes a better case for developing California economic development strategy than the 2011 Best Cities for Jobs report published this week by Forbes. The authors, Joel Kotkin and Micheal Shires index the nation’s 398 metropolitan statistical areas (MSAs), or cities, for their job growth potential based on recent, mid-term and long-term employment growth trends using employment data reported by the U.S. Bureau of Labor Statistics (BLS).

The first thing I noticed when I read the report was California’s highest ranked city is Merced at 155. On the way there I couldn’t help but notice the preponderance of Texas cities high on the list. Killeen, TX gets the top ranking for job creation potential. In fact, five of the best six cities for jobs are in Texas. Bismarck, North Dakota is ranked second. I couldn’t stop myself and began highlighting the 28 California cities and 26 Texas cities included in the report.

Here’s what I found. Collectively, California’s 28 cities dropped a whopping 728 places in the past 12 months. Conversely, Texas’ 26 cities moved up a total of 345 places. California’s largest city, Los Angeles, placed 373rd in the rankings while Texas’ largest city, Houston, ranked 14th. California’s lowest ranking city is Oakland at 395. The lowest ranking Texas city is Wichita Falls at 274.

I also looked at how a few other large industrial states performed.

Michigan, the state hit hardest by the recent recession saw 12 of its 16 cities climb to higher ranking in 2011 than they had in 2010 for a collective gain of an impressive 983 rankings. Detroit’s ranking is still a pathetic 384.

11 of 16 Ohio cities had higher job growth potential in 2011 for a collective gain of 404 places. Cleveland was ranked 307.

11 of 14 Pennsylvania cities moved to higher rankings between 2010 and 2011 for a collective gain of 711 places. Philadelphia ranked 58th and Pittsburgh ranked 61st. The lowest ranking Pennsylvania city is Harrisburg at 205.

Only 6 of New York’s 14 cities saw upward movement and New York’s collective position dropped 119 places. New York City ranked 54th for job creation potential.

Forbes' Best Cities for Jobs report makes it clear that most of America is moving up the on-ramp to the job recovery highway, but California is still aimlessly meandering on economic back roads.  Some may say everything will be just fine if we're patient because California's natural beauty and our sun, sea & surf life style is all we need to attract investment and rekindle our economy.  However, rational observers may say it's time to crank up the GPS to find the jobs on-ramp and create a long term economic development roadmap for California.

If job creation was the #1 priority for California's elected officials last November, how do we find ourselves six months later still talking and not acting?