California is experiencing a substantial decline in job openings, down 30% this year, as its unemployment rate continues to slightly rise, spurred by both businesses and residents leaving due to high taxes and a soaring cost of living under Gov. Gavin Newsom. Job openings dropped from 920,000 in August 2023 to 641,000 in August 2024, according to recent data from the Bureau of Labor Statistics.
The state’s unemployment rate in September 2024 climbed to 5.3%, up from 5% the year prior, now standing over a percentage point higher than the national average of 4.1%, with only Nevada recording a higher rate at 5.6%. Newsom’s $20 minimum wage increase for fast-food workers, enacted in April, has added fuel to the exodus, as large employers like Tesla, Oracle, Chevron, and Charles Schwab relocate to states with more business-friendly environments, and most are still planning for more exits next coming year 2025 in Q1. California lost more than 9,000 jobs between December of 2023 and January 2024 alone from companies citing a desire to get ahead of the new proposed wag law before it went active.
The tech sector has faired no differently, as many major tech companies have already had mass layoffs this year, and others, such as Elon Musk’s companies X, SpaceX, and Tesla threatened to completely leave the state entirely. (Or at least, Elon Musk has threatened to move the companies entirely, and has supposedly started to make plans to do so).
High taxes, combined with escalating crime rates, and a series of other controversial policies have been said to have contributed to this notable outmigration. California topped the list for net population loss in 2024, with a projected 10,000 residents moving out, according to a Consumer Affairs report. Additionally, housing costs have skyrocketed, with the median home price surpassing $900,000 for the first time, creating further hiring challenges for entry-level positions in industries such as retail, construction, and home care.
And for the farming community, they are obviously not immune either.
Cash farm income overall has been dropping this year, especially compared to last year. Though this has hit the entire US economy and not just Californians. But in California, as with every year, Farmers have continued to struggle against increasing regulations and looming bills that have passed and go into effect soon, such as more regulations on machinery, fuels, and labor. In fact, 2024 might just be the worst year for our farmers in more than a decade.
This obviously creates some real pressure on our farmers as they continue to try and survive by wither merging, scaling back, or just simply choosing to retire and leave.
As private-sector job numbers drop in most industries, government positions in California have apparently surged. Since September 2022, the state has seen a loss of 154,000 private-sector jobs, offset by an increase of 361,000 public-sector jobs, according to the state’s Legislative Analyst’s Office. Businesses report difficulties in hiring due to both inflation and high operational costs, with some scaling back on hiring efforts altogether.
Tech firms, overstaffed following the post-pandemic boom, have continued cutting jobs to adapt to current growth rates, and California’s $20 minimum wage law has led to job cuts in the fast-food sector. Pizza Hut, Round Table Pizza, El Pollo Loco, and others have implemented layoffs or adopted robotics to manage rising expenses and have been increasingly reliant on contractor delivery services such as Uber as well, instead of regular staff. Wage hikes and inflation seem to have led to higher menu prices and closures of locations like Shake Shack and Rubio’s Coastal Grill, or at least were cited as the reasonings behind these additional closures still.
However, despite these challenges, California’s economy does continue to grow, with the fifth-largest economy globally and an average job growth rate of 1.1% this year – so possibly slightly stagnant compared to where we may have been headed had COVID not been a major issue. The growth was 16,500 jobs this year, as opposed to 12,900 jobs last year 2023. Newsom’s office also reports that California created nearly one in five new jobs nationwide this summer, marking 53 consecutive months of job gains.
Generally, it is hard to tell what next year will bring of course. Or if all these issues from this year are simply an over correction of businesses or some companies just giving up because they feel hopeless in the current climate and economy in certain parts of the state.
