Boomer Economy Stunting Growth in Northern California


The road north across the Golden Gate leads to some of the prettiest counties in North America. Yet behind the lovely rolling hills, wineries, ranches and picturesque once-rural towns lies a demographic time bomb that neither political party is ready to address.

Paradise is having a problem with the evolving economy. A generational conflict is brewing, pitting the interests and predilections of well-heeled boomers against a growing, predominately Latino working class. And neither the emerging "progressive" politics nor laissez-faire conservatism is offering much in the way of a solution.

These northern California counties--which include Sonoma, Napa, Solano and Marin--have become beacons for middle- and upper-class residents from the Bay Area. These generally liberal people came in part to enjoy the lifestyle of this mild, bucolic region, and many have little interest in changing it.

"The yuppies have insulated themselves here for the long term," notes Robert Eyler, a director at the Center for Regional Economic Analysis at Sonoma State University. "The boomers have blocked everyone else different in age and skill from rising up and making their place."

Nowhere is this more evident than in the "green," anti-growth movement so prevalent in these places. Strong restrictions of business growth, bolstered by California's draconian land-use regulations, have turned these areas into business no-go zones. This has become increasingly clear after the collapse of the real estate boom, which created thousands of jobs for agents, mortgage brokers and construction workers.

Hard times have come to paradise. Unemployment in Sonoma now tops 10%, up from barely 3% two years ago, notes Eyler. The rate is slightly higher in neighboring Solano County but a bit lower in wealthy Marin and Napa. Across the region, vacancy rates for offices and other commercial buildings have reached as high as 30%. Overall, by some estimates, the vacancy rate is higher in Sonoma than in Detroit.

These conditions, local business leaders suggest, seem to have no effect on the region's well-organized and well-financed greenies, who often see any growth as a threat to their quality of life

Of course, economic reversal can sometimes hurt the balance sheets of wealthy yuppies and early retirees, but Eyler suggests the change could prove most devastating to the next generation of residents. In 2000 these counties were almost 70% white; Eyler projects that by 2030 they will be majority minority, with the Latino percentage more than doubling to almost one-third the population.

At the same time, the predominant white population will be getting older and even less supportive of economic growth. The boomers who moved to paradise may not have "put up a parking lot" as much as rooted themselves firmly into the ground. Already Marin, the wealthiest county, is among the oldest in California, vying with other high-end places like San Francisco and Orange and Ventura Counties.

Today in Marin, there are still more people aged 40 to 55 than over 65. But by 2025 the over-65 crowd will be as large as the prime working-age population (which comprises those in their 30s and 40s) and should be larger than the under-25 population. The old and young also will diverge greatly in their ethnicities. In virtually all North Bay areas, the bulk of the codgers will be white, while most young people will be Hispanic or other minorities.

In the past, besides construction, these young workers might have found employment in the area's once-burgeoning electronics and telecommunications industry. But many of these companies have moved operations to more business-friendly regions or overseas. "When these kids who are in school now grow up, we are going to have a huge job crisis here," Eyler warns. "But when the boomers are gone, what happens when all the jobs have moved to Des Moines?"

Of course, the widely accepted solution to this dilemma comes in the color green--that environment jobs will provide the new employment. Indeed by some accounts, most embarrassingly in a recent Time magazine cover, the shift to green technologies has already created a "thriving" economy.

This would be news to a state that suffers 12% unemployment, massive outmigration and among the worst business climates in the country. Time extols Google, Apple, Facebook, Twitter and the other Silicon Valley companies as exemplars leading to a glorious prosperity; somehow the article missed the empty factories, vacant offices and abandoned farms across the state.

Not surprisingly, California's middle class is getting hammered, and has for years. Since 1999, according to research at the California Lutheran University forecast project, the state has experienced a far more dramatic drop in households earning between $35,000 and $75,000, than the national average. At the same time California's poverty rate has grown at a more rapid pace than the national average, with a huge spike since 2006.

This reflects a strange disjunction between the optimism of the top-tier boomers--venture capitalists, academics and the self-described progressives--and the realities facing most Californians. For Apple's Steve Jobs, Google's Eric Schmidt and venture capitalists connected to Al Gore, these could well be the best of times. Fed policy prints money for investment bankers to speculate; stock prices rise as people have nowhere else to invest. And for the much celebrated venture community, there's also an Energy Department that pours hundreds of millions into "green" start-ups that build things like expensive electric cars.

California's high-tech greens may talk a liberal streak in terms of diversity and social justice, but their prescriptions offer little for those who would like to build a career and raise a family in 21st century California. Their policies in terms of land use regulation and greenhouse gas emissions will make it even harder for existing factories, warehouses, homebuilders and other traditional employers of the middle- or working class. "In effect," Eyler notes, "the progressives have become regressives."

In the real world hype and enthusiasm are not sufficient to create a sustainable economic model. In order to grow a "green" economy, you first have to have an economy. To be sure, there are potential opportunities in the development and implementation of energy-saving technologies in the next decade, including wind and solar energy, but it's doubtful that many jobs can be generated without a major shift in the economic climate here.

One key problem, as suggested in a recent analysis by Rob Sentz at Economic Modeling Specialists, is that green is not really about "what" you make but about "how" you make it. Green jobs, for the most part, will come from growth in construction, manufacturing and warehousing industries.

Yet the "greenest" parts of the country--places like the northern end of the Bay Area--are among the toughest places to build or manufacture anything, without huge public-sector subsidies. Indeed, California's new green requirements, compared with places like Texas or China where manufacturing has other advantages, would further undermine an already struggling sector. Few businesspeople see much growth in the near future in office or residential construction.

This leaves "green" industries reduced to largely improving the energy footprint of existing structures, an effort that will no doubt be further undermined by the deteriorating picture for many commercial mortgages. At best, Eyler notes, this may create a small temporary surge in jobs, but the long-term effects will likely be limited.

Ultimately, the only way out of this looming crisis lies with the boomer gentry doing something totally out of character: getting past their self-interest and self-love for the good of the next generation. In the process, they do not have to give up preserving paradise, but focus as well on creating economic opportunity for the emerging working and middle class majority. If not, their Eden will end up as a green version of a gated community.

This article originally appeared at

Joel Kotkin is executive editor of and is a distinguished presidential fellow in urban futures at Chapman University. He is author of The City: A Global History. His next book, The Next Hundred Million: America in 2050, will be published by Penguin Press early next year.

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great post

This argument is based on bad assumptions

You speak as if the current yuppies/boomers in these counties are a static group that will just grow old and die. In fact, young affluent families from throughout NorCal will continue to stream up to the counties, and the economy will always be somewhat "tourist and lifestyle" based. And there's nothing wrong with that. In fact, there is not much difference between these counties and other lifestyle/resort areas around the country, such as Aspen, the Hamptons, etc. Manufacturing doesn't have to occur everywhere, and so long as the economy of these counties is based on tourism/wine/lifestyle, manufacturing doesn't belong there. And if there is such a bad disconnect between the middle classes who can't start or expand their businesses, then they can simply vote the greens and their restrictive policies out of office.

What's the big deal?

There are several "big

There are several "big deals":

The human cost: It is awful for families to be forced to disperse geographically because of the impossibility of maintaining a moderate quality of life on a moderate income. Mine is typical: uncles in Washington, Nevada, Australia (ok, not that typical), Sacramento, way-exurban Solano Co., way outside Santa Cruz and Morgan Hill. Literally everywhere except the core Bay Area counties they grew up in, and they had the opportunity to buy when costs were merely offensive and not yet obscene. Grandparents will not see their grandkids very much, cousins are almost strangers -- and even if you are abnormally lucky and affluent now the odds are that your kids won't be.

The political distortions: Your other point, about how if all this is a problem the voters can just throw out the bad pols, has a flaw. Namely, there are no California races on the Washington or Nevada ballot. The 12-year-olds who are 17 years away from moving to Colorado or Arizona are not participating in planning politics, and the boomers who do unfortunately remain as self-obsessed now as they have been for the last 45 years. (EVERYONE has a sexual revolution when they're 18, people, the sixties were magical mostly because you were born in the 40's and 50's.)

Why this is different from the Hamptons: Sonoma and Napa are just the most noxious parts of the most noxious region when it comes to accommodating the needs of non-boomers. San Francisco also perceives itself as a lifestyle destination -- although with a healthy, "Stuff White People Like" level of picturesque squalor thrown in, and a few overflowing immigrant tenements to give the chipotle aiolli or pho some extra authenticity. You can travel from Ukiah to Monterey and never be in anything other than self-styled "lifestyle destination centers." In the walled boomer psychological Lake Wobegone this make sense - to a person who believes sex was invented when they went to college it is only reasonable that their street is the last one that should have been built on a torn-down orchard, and that their community is tied for first with every freeway offramp for 100 miles in any direction. Actually Napa is almost a bad example because you can still do real business from American Canyon to northern Contra Costa, whereas the closest place to San Francisco you might plausibly build a facility for the production of anyting is... American Canyon to northern Contra Costa. The Hamptons is a small resort peninsula. Aspen is a marketing campaign by ski-lift manufacturers. The incredible stretch of land from Mendocino to Monterey contains the greatest natural harbor on Earth, some of the best ag land anywhere, the most copacetic climate for 25,000 miles besides LA, a miraculous electronics industry that regularly astonishes its own insiders, some schools that rank with Athens in 300 BC for contributions to humanity, and on and on. The fact that to your mind this is comparable to The Hamptons or Aspen is almost a perfect summary of the problem. And don't protest that you just mean to put the un-boomery things nearby but not within the Sonoma or Marin sanctums. Livermore now thinks of itself as a wine and lifestyle destination, with all the attendant zoning controls and righteous preservationists. LIVERMORE! I used to feel sorry for the cows out there, driving out to the 5 and LA -- they put the Berkeley lab there so no one would care if there was a nuclear disaster! And now its boomercrats are every bit as convinced as the Sonomans, the Marinites, the San Mateans, that the world needed to stop changing after they turned about 40, and God Forbid anyone build another suburb next to the one built for them, or "change the character" of their neighborhood such that it no longer looks exactly like it did when they were still getting laid. We are very tired of these people.

Finally you overestimate how many "yuppies" are actually moving into these places. It is an irony of the Bay Area that all the wealthiest and most successful schools are decaying and disappearing from lack of enrollment -- the street I grew up on had about 2 kids per house; now there are 2 kids on the whole street. You could fit 25-30 compact houses on our lot, which was built out in the 60's on a former farm. The original farm house remained until the late 90's; but in effect when the farm was torn up the density increased by about the same factor as would obtain if the current huge yards were infilled. I asked my mom about this once, I said "what would you do if someone put 30 row houses on the lot next door?" And she said, "Well I would have to move." And I said, "But what if me and Jack and Jane were living there?" "Well that would be amazing!" There is a really serious disconnect in the California boomer mind -- it truly never occurs to them that their decisions are hurting people like themselves. If you had told an adult in 1950 that most of the kids of San Mateo and Santa Clara born after 1970 would be leaving their cities in despair, they would assume there had been an earthquake, or epidemic, or war. Who would have thought it would be because of those little toddlers around their knees?

Big Deals

I don't believe that children moving away from their parents is a new occurrence. In my extended family, it was rare for anyone to stay near their parents after they grew up. Maybe in the same state, but hardly ever in the same town. People have migrated away from their roots for hundreds, if not thousands, of years.