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Jan. 15, 2021 - Epoch Times
35:19
What’s Happening to California’s Middle Class | Urban Policy Expert Joel Kotkin
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Time Text
You had talked about middle-class jobs leaving California.
What has happened with them?
We're hollowing out our economy so that we only have the very high-end jobs and the very low-end jobs.
And everything in the middle is eroding.
And how is it going to affect people that are in California right now?
As the society becomes more lawless, The wealthy will protect themselves, just as they did in the pandemic, and everybody else is screwed.
Do you think that the people that are leading California are seeing what's going to happen to California?
Unfortunately, California, weirdly enough, is dominated by basically one city almost completely politically now.
Is there a way for California to break out of this?
During the 1920s and 30s, no person on the left wanted to criticize the Soviet Union because the Soviet Union was the model worker state.
Well, California is the model woke state, so you can't say anything bad about it.
Who can say, look, there is a California dream.
It's slipping.
We can get it back.
But I think it's too late now.
The Democratic Party has been bought up by the clarity on one side and the oligarchs on the other.
And the middle class is just a figment.
California is losing middle-class jobs.
My guest today is Joe Kotkin.
He's the Presidential Fellow in Urban Futures at Chapman University in Orange and author of The Coming of Neo-Feudalism, A Warning to the Global Middle Class.
Today we will discuss how California's government policies could create a small minority of wealthy elites and a large population with low-weight jobs and many reliant on government subsidies.
Welcome to California Insider.
It's my pleasure.
So Joel, we want to talk to you about the middle class in California.
You've written a book how you've given a warning to the middle class in the world.
And I want to see what is happening in California with the middle class.
Well, basically what you have in California now is an increasingly bifurcated economy between a small but very, very super wealthy tech elite and people around the real estate industry that makes money off that elite.
And A growing group of people who are either unemployed or being paid very poorly, and of course have been very hard hit by the pandemic.
And if you think of Disneyland alone, 20,000 working class jobs gone.
You have policies that are just very difficult for middle and working class people.
They work fine for certain groups, but for the vast majority, it's not very good.
And you had talked about middle-class jobs leaving California.
What types of jobs are these and what has happened with them?
Well, I think they come in all different forms.
Certainly one big part of those jobs are people who work in large organizations that provide business services.
You think of McKesson.
Now, here's a company that's going to have the contract to distribute the COVID services.
Vaccine.
They are now in Dallas.
They were in San Francisco.
Parsons, Jacobs, Toyota, Mitsubishi, Nissan.
These are all companies that provided good middle-class jobs, and they're all gone.
Then you've got the jobs that are moving that should be here.
For instance, Tesla building their next factory in Texas.
SpaceX building the spaceships not where they should be built in Southern California, but building them in Texas.
You see companies like Uber and Lyft shifting more operations elsewhere.
Same thing with Apple.
So what's happening is we're hollowing out our economy so that we only have the very high-end jobs And the very low-end jobs.
And everything in the middle is eroding.
And what are those jobs?
Is it 100K to 200K, those type of paying jobs?
And what does it mean?
It means is that somebody working here has got relatively little chance of ever buying a house, ever having extra capital to start a business.
I mean, what's kept California afloat in some senses has been money from overseas.
People escaping, you know, India, China, Middle East, you know, just because it's better to be here than there.
And those businesses are suffering as a result of the pandemic and also these regulations?
Yes.
I mean, that's exactly what's happening.
I mean, you have...
You know, you have these businesses which were already hurt.
You know, and one of the things that I found very interesting is talking to people, let's say in East L.A., where somebody will say, hey, I have a shoe store on Cesar Chavez.
I had to close, but Target...
Didn't have to close.
So my customers went to Target or all the people who used to go to the neighborhood store who now are on Amazon.
So, you know, Jeff Bezos gets richer and richer and richer.
I'm sure that makes everyone happy.
But the reality is that many of these people have been hurt by these regulations, which I think not necessarily that they were bad in their intent, But the way they were practiced was very unfair to small companies.
Then the reality, which is if people are buying stuff, buying food online, or you need to have outdoor dining, well, your little taqueria just doesn't have the place for outdoor dining.
So many of those restaurants, I think, are going to be very hard hit.
And I think we're going to see, we're already seeing tens of thousands of restaurants across the country going out of business.
And those are places where people worked and those were places where people invested their life savings and they're getting wiped out.
And now let's talk about what will happen to these people.
So like the shoe store owner that got shut down and would he have to eventually go and work for a Target?
Yeah, I think we may very well see that.
They'll go work for a target or they may move to another state.
I mean, we're seeing in the pandemic much faster rates of recovery in other states than we see in California.
I mean, with the exception really of...
Nevada, which is so tourism dependent, and Hawaii, which is even more tourist dependent.
California is pretty much at the bottom of the list, and it really shouldn't be, given that we're the home of the tech companies that are benefiting the most from this, but the people of California are not.
That should send a message to people.
Google getting richer, Apple getting richer, Facebook getting richer doesn't necessarily help many people here in California.
So you mentioned the divide between the rich class and the lower class.
What is this going to look like?
And how is it going to affect people that are in California right now?
Well, I think there are two scenarios.
One would be The middle and working classes finally rebel and start saying no to things.
Now, we may see that, for instance, in the propositions.
You know, the presidential election is irrelevant in California, but the vote on the propositions could show a groundswell of opposition to the gentry liberal agenda of Newsom.
So I think you may see that.
But the other scenario Is that every year you lose young and middle class families who might be middle of the road or even conservative.
They move and the people who stay are the people who are most dependent on government benefit.
And so you skew the political system so that there can't be a middle class rebellion.
And then we sort of become ever more sort of like a cross between Monte Carlo and Venezuela.
See, so there's a rich class and there's that kind of like, there is the poor class that's getting government subsidies and support, but there is no upward mobility.
There's a clerical class, or what I call the clerisy, which would be people who would be teaching at universities in the upper bureaucracy who are...
I don't see a lot of university professors losing their jobs in the pandemic.
Certainly high-level bureaucrats, are they going to be hurt by this?
Probably not.
And of course, many of them, they're getting their wish, which is they can now control people's lives at a level that You know, you didn't even see during wartime.
So we'll have a rich class and then a clerical class that's political people and then they're getting high salaries and then we have the poor class.
Right.
And then you've got this sort of struggling yeomanry, the third estate in the old French context.
And, you know, you would have that group of people and they would do, you know, they would be struggling.
And that's what's happening.
Democracy in general is dependent on the existence of a middle class.
It's like Barrington Moore once said, no bourgeois, no democracy.
Because you've got to have people who have some property of their own, have an ability to think for themselves, are not dependent on the state.
If you get rid of that class, then even if you have a titular democracy, we're more and more like Putin's Russia and less and less like the America that we knew.
Now, do you think that the people that are leading California are seeing what's going to happen to California?
Or are they interested in doing this?
Or is this happening because they're not paying attention?
The people leading California, I think, you know, if you take up Newsome, Newsome has been nurtured by the oligarchs from day one.
He surrounds himself with, you know, he was the mayor of San Francisco.
I'm talking about the most atypical place in California is probably San Francisco.
You know, he's never shown any particular interest in the middle class, you know, except rhetorically.
And his entire administration is about how can I prove that I'm the best on climate, the best on the pandemic, so that I can be elected president.
Now, the bad news for Newsom is that Kamala Harris may be the vice president, and I think she's going to be ahead of him in line.
And how many people from San Francisco can you put on the head of a pin?
You'd hope none, but unfortunately, California, weirdly enough, is dominated by basically one city almost completely politically now.
Southern California is just a bunch of second-rate people with very little influence.
And now, the oligarchs, the tech, which are the tech entrepreneurs, right?
That are big company, big tech.
Now, are they doing this on purpose or are they falling into an ideology that they want to help people and they're getting us to where it looks like?
Well, here's what I would say.
First of all, as a friend of mine who worked in Silicon Valley, largest apartment developer, He said he's never run into a group of people who had less knowledge of what the effect of what they're doing is on society.
These are engineers.
They're nerds.
They're not people who have any contact with regular people.
Their knowledge of history is usually not very deep.
They don't tend to be naturally empathetic.
I think they tend to think in abstractions, which is not atypical of a technologist or a scientist.
Look, I think we need technologists and scientists.
I don't want them running the society because they bring a particular worldview.
I don't think they even understand what they're doing.
I mean, what's interesting, though, is that there are some people who worked in these tech companies who understand what a horrible thing they're doing to this society.
But those voices are not running those companies anymore because, you know, you read about Facebook executives or, you know, or Apple executives who don't even want their kids to use the products that they're selling to everybody else.
You know, it's sort of like the, to some extent it reminds me of the mafia heroin dealers in New York when I was a kid, who they would never take it, they would never want their kids to take it, but they were going to make a fortune selling it to everyone else.
So they have this ideology and they have their view of how they can make things better.
So they fund the politicians and then those politicians follow or do they fund the ideology?
Or do they have a very powerful voice?
I mean, there's an ideology which is more sort of cultural, you know, comes out, particularly the Bay Area, Puget Sound, probably the two most progressive, if you want to use that terminology, areas in the country.
So that's the climate that they're in.
I mean, I think basically what the oligarchs want to do is they want to emphasize gender, race, environmental issues, but they certainly don't want to emphasize class.
And if you look at what their views on class are, which I think are the most important things, Their views on class are, ah, we're going to move into society where only smart people like us are going to get richer and more powerful.
And so we're going to go give the masses little handouts so they can...
I think the perfect Mark Zuckerberg result is a...
You know, 35-year-old, unmarried, no kids, living in an apartment, you know, playing video games all day and virtual reality and maybe, you know, drinking, smoking pot and sort of watering his plants.
That's the perfect citizen in the Facebook universe.
Now, it looks like we're stuck in this ideology and this situation.
Is there a way for California to break out of this?
I think the leadership is going to have to come.
It's not going to come from the old conservative white, you know, white male old conservative there.
The bottom line is it's going to have to come from people who somehow symbolize what Californians are becoming.
Like, for instance, A charismatic Asian or African American or Latino person who speaks to working class and middle class aspirations would be a good candidate.
You know, there are now some signs of that, but it's going to have to come from a sort of a rebellion from the particularly Latino and Asian populations.
I think we're maybe seeing the first signs, particularly with Asians, on the affirmative action debate.
I think for the first time, Asians are beginning to say, you know, If I go with this ideology of the progressives, my kids aren't going to get into the schools that they've been studying so hard to get into.
And I'm very sensitive to it because when my father was growing up and my family, Jews had quotas at various schools because like Asians today, Jews worked really hard and their parents pushed them.
Now, maybe the Russian and Israeli and Persian Jews do that.
I have not so much confidence in the old Ashkenazic Jews like me.
But the reality is that these populations, the Latinos, are they going to react to the fact that the lockdowns that we're having here are having catastrophic effects on the parts of the economy they work in?
After all, I'm a working class person with a family of four living in a little house in Modesto.
I have energy bills that are much higher than some rich guy who lives in Newport Beach.
You know, because as you know, the Newport Beach or Santa Monica or Malibu have very mild climates where most of the year you don't need heating or air conditioning.
If you live in Modesto, you do.
You're working class.
You're paying more.
Let's say you're driving.
The rich guy can afford to live in Newport Beach and maybe drives 10 minutes to his office in Irvine.
The working class guy lives in Riverside, works in Long Beach, and has to drive an F110 to Long Beach every day.
Well, that's a huge amount of money.
So the question is, who can articulate this?
Who can speak about this?
Who can say, look, there is a California dream.
It's slipping.
We can get it back.
I would love for that to come from a Democrat myself, but I think it's too late now.
The Democratic Party has been bought by the claricy on one side and the oligarchs on the other, and the middle class is just a figment.
And for something like that, for a movement like that, does it have to have a lot of money behind it, or does it have to have media, or does it have to be an awakening from?
The good news is that if social media is used correctly, It could make up for it.
You're never going to really change the LA Times.
You're not going to change the New York Times.
You're not going to change the networks.
You're not going to change the studios.
They're gone.
They're gone.
They've signed up for the other team.
Is there a grassroots ability to do this?
That's why this issue of censorship from the platforms is very scary because...
You know, what happens if after the election, Google decides, well, we don't like being called tech oligarchs, so we're going to bury anything that says the word tech oligarch.
Now, they haven't gotten there yet.
But what happens if, you know, you get a Kamala Harris, who I don't think has any particular passion for free speech anyway, and she's, you know, she's the tool of the tech oligarchs.
She's going to push that.
You know, who knows what Biden's in favor of, you know, because he's had a stealth campaign.
We don't really know what he's about.
In terms of what it'll actually do, who knows?
And can they do that?
Can they do something like that because they're a private company?
Yes, I mean, and the idiot conservatives will back them up on it, too.
At least some of them.
Particularly if they're getting money from Google, which according to American Prospect's recent article.
Yeah, I mean, they could certainly extend themselves, say, yes, we're a private site.
But the problem is, then...
If you control 80-90% of the market, it's a monopoly.
We decided over a century ago that we did not want monopolies in the United States.
Well, who's doing anything about it?
You know, Trump at the last minute does something.
I would imagine, you know, I so distrust Trump.
I think he's, you know, had Google, you know, genuflected to him, maybe he wouldn't have done that.
I mean, he's probably doing it at a personal peak.
He happens to be doing the right thing, probably for the wrong reasons.
And now, the people that are in these companies, in these tech companies, in the media, majority of them, the people that are doing the work, there's the C-level executives and the leaders, and then there are the workers.
Do they know what they're leading the society to?
Or are they just following because they think ideologically this is the right thing to do?
I think, first of all, you've got to give them credit for seeking profit.
I mean, they want to aggrandize themselves as much as humanly possible.
You know, you always would think, well, how can...
What gets these people up in the morning?
Like, I'm already worth $80 billion.
I'm going to work really hard to be worth $120 billion.
Like, okay.
I don't get it.
I mean, it's like...
You know, sort of like Genghis Khan, you know, well, I can conquer another country, so I'm going to go ahead and do it.
The reality is that these people, I don't think they've thought things out.
You know, again, I would imagine, and maybe this is my prejudice, I was educated in classical civilization, okay?
I was, you know, Hebrew and Latin were the first two languages I studied.
I've held onto the Latin a little better, but the reality is I was trained in how the classical civilizations, and then later on at university I learned about Chinese civilizations and Middle Eastern civilizations.
I don't think the people running these companies have those views.
Now, they may come from Iran, they may come from India, so they may have some of that background, but they don't really know American history.
I mean, why would you censor something that criticizes, let's say, 1619 Project?
Anybody who knows American history, including progressive historians, know it's a bunch of garbage.
I mean, I was taught by my own mentor, a man named Michael Harrington, who wrote The Other America.
Never try to think that you can explain why people do things and think that they have bad motives.
People don't have bad motives, necessarily.
I mean, there are sociopaths, but I don't think these guys are sociopaths.
I think they think they're doing God's work in their own bizarre way.
They do donate to charities, right?
Some of them donate for sure.
Well, a lot of them donate to ideological charities.
You know, you have Jeff Bezos giving the climate movement $10 billion.
I mean, there isn't $10 billion that's probably gone to all the conservative movements put together.
I mean, so what you've got is you've got now, like, for instance, here in California, I've been told by people at universities, The nonprofits in California, they're all on the same agenda.
It's all Black Lives Matter, you know, climate change hysteria, you know, let's lock down the economy for the pandemic.
I mean, the ideology is consistent.
It's consistent in these companies.
It's consistent in the media.
Now, there are going to be some interesting fights.
You know, a lot of my later education was, you know, somewhat influenced by Marxism, which is a very good tool for understanding contradictions.
Now, we're going to see a great one here in California.
On the one hand, you've got the left past something called AB5, which was to restrict Uber and Lyft.
And there's been a movement to force companies like Uber and Lyft to go to full-time employees.
Now, their business model does not work if that happens.
I think that's pretty clear.
So they're fighting it.
So you've got one part of the left fighting another.
So I think after Trump is dispatched with, if he is dispatched with, What the glue holding the oligarchs together with the left wing of the Democratic Party will begin to weaken.
And I think you're going to see this conflict become...
I mean, the oligarchs aren't stupid.
I mean, they've got to know that some of the changes that are going to be pushed by the progressives are not in their interests.
I mean, free speech, the progressives apparently don't care about free speech, but they might care about taxation.
They may want to raise more money.
You know, if you're in California and you already have a bunch of ballot measures in San Francisco to take money from the oligarchs, You know, you're sitting there and you're saying you're seeing homeless people in the street.
You're seeing middle class people leaving.
You see businesses going out.
And then you've got, you know, people at Apple and Facebook and Google who are worth tens of billions of dollars.
You've got to expect that there's a contradiction there.
So it's going to be kind of fun to watch as that contradiction evolves.
What I think they'll attempt to do is the oligarchs will pay off the working class by essentially taking all the assets of the middle class and giving it to the poor and dividing it up.
That's, I think, where we may end up heading.
Do you see San Francisco?
Is San Francisco a good example for where California might end up, how California might end up?
I think that San Francisco is a unique place.
I mean, it's got a particular charm, beauty, although they're doing everything they can to destroy it.
It still has those assets.
San Francisco is, in a weird way, almost the paradigm of what they want to see.
This kind of completely bifurcated, totally PC environment.
And the way the oligarchs deal with it, they have private security.
So what, the cops don't enforce the laws?
I'm sure it's not easy to break into any property of Mark Zuckerberg, okay?
I don't think it's easy to break into the properties of the people at Salesforce.
They don't have to rely on the San Francisco cops.
They can hire their own cops.
It's the schmuck middle class.
It's the Arab American owner of a little convenience store in the Richmond district.
That person has no protection.
And that's where we're going in California.
What will inevitably happen is as the society becomes more lawless, the wealthy will protect themselves, just as they did in the pandemic, and everybody else is screwed.
And now, do you think this trend, you mentioned that there might be a change coming from the Democrats in California and the working class.
Do you think this change could happen in the next five years?
I think we could see some very interesting things happen.
I'll give you an example.
Governor Newsom, out of the fires, because he obviously didn't want to admit what incompetent he was and his predecessors were, he blames climate change.
You know, it's sort of like in the Middle Ages, you know, if something went wrong, it was the will of God.
Well, now it's the will of Gaia.
And so, you know, so then he says, OK, we're going to get rid of fossil fuel driven cars, gas cars by 2035.
It had nothing to do with the fires, obviously.
He's not going to help with that.
But...
Well, who resisted it?
Who's resisting the attempt to wipe out the fossil fuel industry in California, which was once very large?
The people resisting it are people like Jim Cooper, a liberal, African-American representative from the area south of Sacramento.
Lorena Gonzalez, who is the author of AB5. They're beginning to say, hey, look, you know, this green program that we have doesn't do anything for our constituents.
And I would argue that the kind of BLM-like program that's being adopted.
So what?
So we now have more African-Americans and transgender people on corporate boards.
Who does that help?
I mean, it helps a very small number of people.
So my hope is That out of these conflicts, there will be some attempt to, at the very least, make the progressives understand what the impact of what their programs are and what they are on the middle class.
Now, the Republicans should have the alternative, but unfortunately, the California Republican Party seems to be run by unbelievable imbeciles, you know, who are just...
You know, if you run a John Cox or some of those other candidates, there's no way they could ever win.
There's no way they're going to get above 45% of the vote.
It's not going to happen.
You're in a state that's predominantly non-white.
That is becoming increasingly Asian and Latino.
You don't appeal to them by running a bunch of old white guys.
And a bunch of old white guys who are appealing to a diminishing group of ideological conservatives who, yes, if this was 1975, That would be a big group.
It's not a big group.
It's getting smaller every year.
Why don't you figure out a different message that might be able to hit the weaknesses of the other side?
But of course, you have to have a strategic sense, and that doesn't seem to be there.
Now, what do you recommend to average citizens, residents of California?
I think you have to say, hey, look, we're not going to put up with this.
I mean, let's say if I'm a shopkeeper in a strip mall on Tustin Avenue in Orange, And I know that after AB5, my landlord, who maybe bought that property a long time ago, is going to be faced with a huge increase in property taxes.
So I mean Prop 15, right?
You mean Prop 15, after Prop 15, yeah.
And I'm going to impose it on you.
Mr.
Taqueria owner, Mr.
Chicken place owner, whatever it is, barbecue place owner.
You have to get up there and say, I'm against this.
I don't want this.
And I don't want to support someone like Gavin Newsom, whose oligarch friends aren't bothered by this at all, because their facilities tend to be new and would already have higher taxes.
You're going to say, I don't want this anymore.
I don't want to save the planet by sacrificing my own family.
People have got to begin to stand up.
And I think they might stand up.
I think the business with affirmative action and the Asian American community may be the beginning of something.
Because they're looking around and they're saying, why would I support this?
You know, who's willing today to go and learn physics or learn computer science or learn...
A lot of those people are going to be Asian, they're going to be Middle Easterners, they're going to be immigrants from other countries, from Latin America, because they're hungrier.
I mean, you think about, if you want to take the analogy of boxing.
Once upon a time, who were the boxers?
They were the Jews, the Italians, because they were coming up from the bottom.
And, you know, the Jews, Italians, Irish, those were the three groups.
Later on, it was African Americans and Latinos, because they were coming up from the bottom.
That's how America reinvents itself.
And to try to regulate that and to try to discourage people.
Why would I discourage a young Vietnamese American kid who wants to learn You know, sort of theoretical mathematics.
Why would I discourage that person?
Why would I say, well, math, you know, you even hear this idiocy.
Mathematics is a white construct, and as my president at Chapman Who is a mathematician from Italy says, well, I don't know.
That's interesting because the numbers come from India and the concepts come from the Arab world.
So why exactly are we saying that mathematics, which is the purest of all the sciences, why are we saying that this is racist?
I mean, this ideology is self-destructive.
To the entire society.
It's very good if you've got a degree in grievance studies from some university and you get a tenured position.
You're in great position for the rest of your life.
The rest of the society suffers for it, of course.
To talk about California today is unfortunately very political.
I try to take an analytical approach.
I work with my But with my colleagues who work in demographics and economics, and I say, how are we doing relative to other people?
How is the middle class doing here?
How are the poor doing here?
Just came out with a report.
How are Latinos and African Americans doing in California and other blue states compared to red states?
We try to study those things.
The problem is that you can't talk about these things because it violates the narrative.
You know, if somebody writes a story saying, as we have found, that an African American in New York City makes much less money adjusted for costs than their counterpart in Atlanta.
Why can't we say that?
But you don't want to say that because California has been designated by the progressives as utopia, sort of like during the 1920s and 30s, no person on the left wanted to criticize the Soviet Union.
Because the Soviet Union was the model worker state.
Well, California is the model woke state, so you can't say anything bad about it, even on the basis of very much social democratic-based analysis.
Well, thank you so much.
Thank you.
I hope you'll find this useful.
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