NEWS: Calif. economy not as bad as many in that state think
Andrew Pollack and David Leonhardt
New York Times
Oct. 12, 2003 12:00 AM
azcentral.com
RIVERSIDE, Calif. - When developer Van Daele Communities put eight new houses on sale recently, 52 people camped out for as long as four days to have a chance to buy.
"We've never seen it like this in 25 years," Chief Executive Mike Van Daele said. Housing prices are appreciating as much as $10,000 to $15,000 a week, Van Daele said.
On the north side of town, new light manufacturing buildings stretch through former orange groves. Some are humming with companies making plastic bottles, stereo speakers and other products.
"The economy's terrible, it's rotten, look," Robin Treen, a commercial real estate broker, said sarcastically as he drove a visitor around.
Riverside hardly looks like a center for a political rebellion, yet that is what it is. The residents of this inland county east of Los Angeles voted overwhelmingly to oust Gov. Gray Davis and replace him with Arnold Schwarzenegger. Voters told pollsters they were concerned over California's economy though the economy is doing relatively well.
In a way, it is the story of an entire state. Despite the political upheaval, growing budget deficit, the power crisis and the bursting of Silicon Valley's bubble, all of which have created the image of a state in recession, California's economy, by many measures, has done better than the rest of the nation's in the past few years.
Military spending in the state is up about 40 percent since 2000 after plunging in the 1990s, according to Economy.com and the Defense Department. House prices continue to rise in most of the state. Some places, like Riverside County, are creating jobs faster than almost anywhere in the nation.
At 6.4 percent, California's jobless rate in September was a bit higher than the nation's 6.1 percent, figures released Friday by the state Employment Development Department show. California suffered a sharp drop in payroll jobs in the month, in contrast to a gain nationally. Still the gap with the nation is far smaller than it was in the early 1990s after the military industry collapsed.
"California has obvious problems," said James Diffley, an economist at Global Insight, a consulting firm that follows regional trends, "but the economic performance has been surprisingly good."
Concern about the economy is considered a major reason voters ousted Davis last week, though dissatisfaction with Davis' performance was also a big factor. |
