California always has cut a larger-than-life presence — its extreme offering of geography and climes almost seems to dictate it.
The recent rains were a prime example. While the sun and 75-degree winter days returned in time for the Jan. 16 Golden Globes, reminders of the record-breaking torrents that pelted the state earlier in the month are strewn throughout. The financial hit to private businesses such as Union Pacific (expected to add up to $200 million in lost revenue and repair bills), and the public sector (road repairs alone are already surpassing $43 million) is still being assessed. The state is still awaiting President Bush to issue a federal disaster declaration to help offset the tab, although the prevailing consensus is that Sacramento will end up shouldering the costs despite its budget shortfalls. And the rainy season has barely begun.
Of course, it’s the man-made conceits of this Golden State — from Hollywood and Sunset Boulevard rock to surf and holistic lifestyles — that continue to shape its image and destiny. But there are some areas where size is affecting, possibly even threatening, that way of life. The state’s continuing annual deficit is now estimated at $8.6 billion. Balancing it is the number-one challenge for Gov. Arnold Schwarzenegger and the Democratic-lead legislature in the coming months — if they can only get back that fuzzy feeling when Ahh-nold first arrived at the statehouse and invited many politicos to smoke a peace cigar in the capitol courtyard.
California’s apparel industry — ranking in the top three in employment statewide — lost some 56,000 manufacturing and retailing jobs since the late Nineties as production relocated to nations with lower labor costs. Minimum wage has become a hot-button issue, and might even end up a ballot measure by yearend. The federal minimum wage is $5.15 an hour. California’s hourly minimum wage holds at $6.75, after the governor vetoed a bill last fall that would raise it to $7.75 by 2006. But it’s not the highest in the nation. By comparison, Oregon and Washington pay $7.05 and $7.16, respectively. Add to that mandated health insurance, rising workers’ compensation rates and joint liability issues, factors to which many critics point as leading threats to the state economy.
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Still, the state’s boasting points — the most apparel-industry employees, above New York; the largest denim, swim, action sports and contemporary markets, and its retail power, from Wal-Mart to Rodeo Drive — are unmatched.
WWD’s Los Angeles bureau staff explored these areas within the pages of this third annual California In Depth issue, from the state’s $6 billion swim category filled with independents as well as Olympic-size players to its $140 billion retail scene.
Oddly, even during the worst weekend showers, many retailers reported sales were up as consumers, stir crazy from days indoors, braved flooded boulevards in order to spend some time and money in their favorite shops.
But then, that’s Californian resiliency for you.