Earlier today, the UCLA Anderson Forecast conference
presented its quarterly projections of the U.S. and California economies. No surprises.
There was a continued forecast (from earlier conferences) of sluggish
growth with years to go before what can be truly seen as a return to “normal”
occurs. You can find a media write up
at: http://business-news.thestreet.com/daily-news/story/ucla-forecast-economy-lag-3-more-years-high-unemployment-slow-growth-impede-progress/1
An official media release from the Forecast is at:
http://uclaforecast.com/contents/archive/2012/media_62012_1.asp
http://uclaforecast.com/contents/archive/2012/media_62012_1.asp
The Forecast reminded me of two lessons that can be drawn
from recent developments. The first –
from the past - is that there is an underlying problem in California which can
be seen in two charts that appear regularly in the Forecast publication that is
distributed to conference attendees.To the left is a chart that shows the old – golden-age-of-California employment trend that came to a halt when the Cold War dissolved. In an important sense, the state has not adjusted to the resulting recession of the early 1990s – and has had on-and-off budget crises since. Expectations for public services seem to run along the old trend. But reality is deviating further and further below those expectations.
The next chart looks at both employment and population in
the state as a percent of national totals.
California is now more or less a normal growth state, not expanding any
faster than the U.S. as a whole on either measure (in contrast to the old trend
before the Cold War ended) when California was becoming a larger and larger
fraction of the U.S. Moreover,
employment relative to population has declined; fewer active workers are
supporting more non-workers (children, elderly retirees, and those who can’t
find work or don’t work for some other reason).
Nothing on these two charts suggests a bright outlook for state support
for UC.
= = =
Then there is the Forecast conference itself, which brings
hundreds of people to campus and provides a lesson for the present. See the two cellphone photos below. The Forecast’s guests fitted nicely into the
Grand Ballroom of Ackerman, suggesting – contrary to those who insist otherwise
– that you can find conference space on campus.
Apart from that observation, and more important, if the
Grand Hotel project – now slated to be just across the street from Ackerman –
is built, the Forecast conference might well go there. And if it does, might that not reduce demand
for Ackerman’s space? And if that
happens - and ASUCLA ends up needing support - won’t the campus end up doing
the bailout? The Forecast – and other
events at Ackerman – can’t occupy two sites; if they move to a new location, the
move takes away business from some other older location.Finally, putting together future, present, and past, is a 250-room hotel what UCLA absolutely needs now as a top priority?
Dan your general interpretation is well-taken--that the UC boom was part of a population and employment boom, and that we have never figured out what to do after the areospace and other manufacuturing declines of the first Pete Wilson admin in the early 1990s. But these charts hide the fact that per capita income in California rose steadily until the crisis year of 2009, and that the state is far wealthier per capita than it was when it built great public university systems. Our budget analyses have always used per-capita income comparisions, and they show that UC funding is about half of what it was as a share of what Californians actually have to spend. The bleak outlook for the funding of public services--about which you are of course correct--is a political choice and not simply an effect of long-term economic trends.
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