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Open Access Publications from the University of California

Growing Apart: The "New Economy" and Job Polarization in California, 1992-2000


This chapter explores the characteristics of job growth in California during the long economic expansion of the 1990s. The main focus is on the quality of jobs (measured by median hourly earnings) generated during the boom years. Drawing on U.S. Current Population Survey data, the analysis shows that net employment growth in California was polarized between "good jobs" and "bad jobs," with relatively little growth in the middle. The state's pattern of job growth was more polarized than that in the U.S. as a whole, although in both the state and the nation, the 1990s pattern contrasts sharply with that of the 1960s, when economic expansion generated a more evenly distributed array of new jobs. In the 1990s, race, ethnicity and nativity were tightly linked to the new polarization, although in the case of gender, the analysis reveals extensive within-group polarization. One of the most striking findings in this chapter involves regional differences: whereas the Los Angeles metropolitan area showed an even more extreme pattern of job polarization than the state as a whole, in the San Francisco Bay Area (which includes Silicon Valley) "good jobs" dominated growth, with little expansion of jobs at the low end or in the middle. This suggests that the much-touted "new economy" of the 1990s is a geographically bounded phenomenon, and one that may depend on a more polarized and less salutary set of economic arrangements in nearby regions.

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