Gov. Jerry Brown preached fiscal restraint to the region’s top business leaders Thursday, warning that the next economic downturn could be looming.
“We know recessions are inevitable,” Brown told a meeting of the Bay Area Council, a regional business group in San Francisco. “We have to plan on a very unpredictable, cyclical flow of money.”
Last week, Brown’s revised $115.3 billion state budget plan included $6.7 billion in new revenue, the fruit of California’s improving economy. But Brown sought to assure business leaders that he would be their bulwark against legislators and social service advocates who want to spend the money on more government programs.
“There’s always (people advocating) ‘more,’ but I’m always ‘less.’ So get used to it,” Brown said. “Without that, it’s Katie bar the door.”
Council president and CEO Jim Wunderman said he appreciated Brown’s prudence, acknowledging that “anyone who is a student of California’s fiscal history understands that it is a series of fluctuations.”
While the economists the council consults remain bullish on the region’s economic outlook, Wunderman said, “Valuations on some companies continue to be high. And that has been a signal in the past.”
While Brown sounded a cautionary tone, a report presented Thursday to the council shows a growing hole in the region’s economy. The booming tech sector is contributing to a “skills gap.” the report said. The sector’s demand for highly educated workers, even for jobs that don’t require them, is making it tougher for people with less than a college degree to advance.
The report found that because middle-skill, entry-level jobs increasingly require more credentials, people without a degree are getting shut out of the high-paying tech world.
The study also found that 75 percent of the postings for entry-level technology jobs in the Bay Area require undergraduate degrees, compared with 49 percent nationally.
http://www.sfgate.com/news/article/Governor-to-business-leaders-Downturn-could-be-6279568.php