An important new analysis shows progressive policies dont hurt, and probably help, growth and jobs

By Jared Bernstein at WP

https://www.washingtonpost.com/news/posteverything/wp/2017/11/14/an-important-new-analysis-shows-progressive-policies-dont-hurt-and-probably-help-growth-and-jobs/?hpid=hp_hp-cards_hp-posteverything%3Ahomepage%2Fcard&utm_term=.9fd6a0b04165

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If the conservative growth critique is even half right, economic conditions in California should be terrible, especially compared to other places that didn’t enact such measures.

Instead, Perry generates two findings. First, the CPM measures had their intended effects (this may sound obvious, but if, for example, a minimum wage hike isn’t reaching anybody, we wouldn’t expect any job impacts either way). In fact, low wages gained in the state, and wage inequality fell a bit. The state is on track to meet its reduced-emissions goals. Health coverage is significantly up in California relative to non-Medicaid-expansion states (this is a conventional finding among all expansion states).


Second, and this is the punchline: State GDP and job growth “were not adversely affected by the California Policy Model.” As the figure below reveals, compared with states whose politics were dominated by Republicans over the period of the study (2011-16), state GDP growth, along with both private and total employment grew faster in California than in the control group of states. The private-sector jobs bar is important to preclude the argument that the CPM hurts private, not government-sector, job creation. Not so.

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Is this a convincing research design? After all, there are zillions of different moving parts in state economies. What we’d ideally want to compare in this setting is two Californias: one that implemented the CPM and one that didn’t. Using a statistical technique that upweights trends in the comparison states that move similarly to California before 2011, Perry tries to simulate that comparison. If jobs in a Republican-controlled state were growing at a rate like California’s before 2011, that state would play a more prominent role in comparing the variables above (Perry combines these weighted variables to create a “synthetic California”). Doing so doesn’t change the findings at all, and the next figure shows job growth in actual California outpacing that of synthetic California post-2011, when the CPM took hold.

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