The job market in California seems to be struggling based on the latest statistics. And compared to the US average, the state is not looking much better.
December of 2023 saw job openings at about 830,000, which is higher month over month compared to the month prior which stood at about 750,000, but much worse from the year prior. According to the US Bureau of Labor Statistics, California has seen a reduction of nearly 500,000 job openings at the end of 2023 compared to the end of 2022. “Job openings” are a census measurement of jobs available in the select area, and do not refer to unemployment.
Compared to the national average, according to Newsweek, the California unemployment rate also currently stands at about 5.2%, which is above the reported 3.7% national average.
John Belvins, a professor lecturer at Cornell University, explained there are many reasons for this trend. And some still have to do with the lingering effect of poor California COVID policy on the state and local level.
As stated by Professor Belvins, “”Some [businesses] have not fully recovered and some went out of business and have been lost,” Blevins said. “Higher business operation hurdles make it harder for small businesses to weather this storm more than other states.”
The professor also mentioned other factors in his interview reported by Newsweek, as: “including higher labor costs, regulatory requirements and employment rules that make it harder to do business in California.”
There is no question that living and working in California is often more expensive than in most other states – and it hardly matters about the county you live in. For example, someone living in Kern County will be just as amazed by the cost of groceries and gas in Arizona compared to their own area, as someone from San Francisco or Los Angeles County. Although, people in San Francisco or Los Angeles County may be even more amazed.
The fact is, that the higher cost of living has ushered in a bit of an exodus of residents from California into other states. Census statistics and reports do show varying degrees on the effect of the population switch, but generally, the last 2-3 years in California has shown a decline in population. And according to the NPO Public Policy Institute, California has experienced some of the slowest growth ever recorded for more than 20 years. It is important to mention as well, that California lost nearly 400,000 residents from moving to other states between 2020 and 2023. These are levels never before seen.
And California is still struggling to recuperate those losses. According to Bloomberg, California tax collections have been nearly 8% lower than expected in the 2022 to 2023 time period alone. That is massive for a state to endure.
Ironically, regardless of the new minimum wage hike marketing and promotions, lower cost workers still seem to leave the state for more affordable parts of the country. Belvins mentions, “This lack of low-wage workers hurts California businesses’ efforts to fill these positions and therefore reduces business productivity,” which further cycles the problem.
In addition to low wage workers, California’s tech sector has had some major losses – company layoffs mostly, as these giants resize to keep their own stock prices going up. This also may be due to an earlier policy that pushed for over hiring after the COVID reopening or during. It may also be a push for more AI centered help above all as well. (Take for example Apple, who shuttered their entire car division in favor of AI software focuses.)
Belvin also mentions that the “content creator” category seems to have grown more substantially, especially in areas like LA, which further take people away from the job market. These jobs are complex and difficult to grow, but there does seem to be more and more younger people trying to focus on things like this as opposed to other types of labor jobs.
There may be certain things that California can do to at least inspire more people to come back. However, it seems that the Governor does little, and instead rests on the laurels of a past that barely exists anymore.
