California’s next governor — with former Attorney General Xavier Becerra widely viewed as the likely successor — is expected to take office facing a long list of difficult problems that have resisted easy solutions.
Some of those challenges, including widespread homelessness and the state’s high cost of living, were well established before Gov. Gavin Newsom took office. Others, including a persistent multibillion-dollar budget deficit and a high unemployment rate, have become more pressing in recent years.
For Southern California and the Inland Empire, where housing costs, long commutes and economic pressures are daily concerns for many families, the question is not just whether California is struggling, but how the state compares with the rest of the country.
Two recent academic studies offer a clearer picture — and the findings are mixed.
One report, “State of the States,” comes from a broader “State of the Nation” research project sponsored by Tulane University’s Murphy Institute. The project aims to assess major public policy issues across the country using comparable measures, rather than partisan talking points.
California ranked first in the nation on the economy, third on trust, third on mental health and third on children and families, according to the study. But the state landed near the bottom in several major categories: 48th in work and labor force, 49th in inequality and 50th in environment. The report also found California ranked low on educational achievement, volunteerism and press freedom.
Those rankings complicate the image often promoted by California political leaders, including Newsom, who have described the state as a national model for economic opportunity, social equity and environmental policy. While California’s economy remains among the strongest in the country, the benefits are not evenly shared, and the state’s high costs continue to weigh heavily on residents.
The report also compared California with neighboring Western states and found that California outperformed them in only three of 14 broad topic areas. Still, the study noted that the state is improving over time on nine of 31 specific measures.
Texas, a frequent point of comparison for California, fared better in several areas where California ranked poorly, including press freedom. But Texas also showed significant shortcomings, including on environmental measures and voter participation.
One striking difference involved how residents view their own lives. Texas ranked near the top for residents’ satisfaction with their current circumstances, while California fell well below the national median.
A second set of findings came from the Berkeley Economy & Society Initiative, a UC Berkeley project supported by the Hewlett Foundation. Its reports focused on California’s affordability crisis and concluded that the state is “less affordable and poorer than it should be” given the size and strength of its economy.
The UC Berkeley researchers found that California is consistently more expensive than other places with similar median incomes. They also linked high costs to the state’s shift from a long-standing magnet for newcomers to a place many residents are leaving.
Since the 2008 recession, California has experienced sustained domestic out-migration, meaning more residents have left for other states than have moved in from elsewhere in the country. Between 2020 and 2024, California had the second-lowest net migration rate among states as a share of population, behind only New York, according to the report.
The Berkeley researchers argued that unaffordability is a major factor behind that reversal.
A follow-up report examined the causes of California’s high costs and pointed to a policy environment that makes it difficult to build the infrastructure needed for housing, energy, water and other essentials.
The report said growth restrictions increase costs primarily by limiting housing supply and driving up housing prices. Those restrictions also raise the cost of major infrastructure projects, contributing to higher energy and transportation expenses for consumers.
Among the solutions identified by the researchers were broader use of factory-built housing and new financing models to expand affordable housing production.
Taken together, the two studies present a familiar but sobering portrait of California: a state with a powerful economy and major institutional strengths, but also deep inequality, severe affordability problems and weak results in several areas that affect everyday life.
For the next governor and state lawmakers, the findings suggest that improving California’s standing will require more than celebrating the state’s economic scale. It will mean confronting the cost pressures and policy barriers that continue to shape life for residents across the state, including fast-growing and cost-burdened communities throughout Southern California and the Inland Empire.
Original source: CalMatters
