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Study Gives California Mixed Economic Scores

November 01, 2000|MARLA DICKERSON

California gets an "A" for its entrepreneurial energy. But it scores big fat "Fs" for its income disparity, high housing costs, low education spending, large numbers of working poor and lousy air quality, putting it in the middle of the pack when compared with the other 49 states for overall economic development.

Those are some of the findings from the just-released "development report card" put out by the Corp. for Enterprise Development. The Washington-based nonprofit does an annual assessment of each state's economy and potential for future growth based on more than 70 data measures.

Nine states made the 2000 "honor roll," led by Colorado, which has scored straight A's on the CFED report card for seven straight years. The study lauds Colorado's "holistic" approach to development, which has melded traditional pro-business strategies such as tax cuts and job training with a progressive agenda on education and environmental protection.

California got high marks in the area of "business vitality," which measures entrepreneurial activity such as job growth, business formation and initial public offerings. It also scored well in "innovation assets," which counts things such as the number of residents with science and engineering doctorates and patents issued in the state.

But when it comes to measuring quality of life and the caliber of many of its jobs, California doesn't make the grade, according to the CFED. Skyrocketing housing costs have led to one of the nation's lowest home ownership rates. Urban sprawl and poor air quality are clouding the California dream. And though the state is creating lots of new jobs, many of them don't pay a living wage or benefits.

CFED researchers found that states making key investments in education and child health care--areas where California lags much of the nation--tend to have higher-quality jobs and more competitive businesses.

"These findings show that states must make critical investments in innovation and in people in order to sustain and improve their competitiveness and business vitality," said William Schweke, senior program director for CFED.

The 2000 Development Report Card for California and other states is available online at http://www.drc.cfed.org.

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