We have said in the past and continue to say that the United States economy will not pull out of this recession quickly. While jobs are a lagging economic indicator, they feed back into the household’s spending ability. The weakness in jobs will imply weakness in median household income. The two biggest factors that drive consumption, income and wealth, have still not recovered to an extent that will motivate a household-sector-driven rebound in expenditures. Finally, Main Street as well as Wall Street will continue to suffer from high foreclosure rates due to the negative employment situation.

How does California rank in this study? The short answer is poor. By these measures, California is 24th in income, 48th in labor, 44th in migration, and 16th in entrepreneurship. When they combine the scores, they come up with an overall ranking of 38th.

There was a time, not that long ago, when it would have been impossible to find economic indicators that would result in California ranking in the bottom half of the states. Even worse, the trends seem to be negative. The authors used a five-year time period for their study. They point out that a three-year period would have resulted in lower scores in the income and labor categories.

The evidence is building that California has fundamental economic problems. The sooner we face those problems and start trying to address them, the sooner California can regain its position as a place of economic opportunity and leadership.