Overview

A recent report from the Pacific Research Institute highlights a troubling trend in California's job market, indicating a decline in private sector employment. The research spans back to March 2001, comparing California's economic performance with that of other states.

The report, titled "California at a Crossroads: How Bad Policy Cost California Its Economic Edge – and How to Win It Back," is authored by Wayne Winegarden and Kerry Jackson. Winegarden notes that California's job growth has significantly lagged behind the national average since February 2020.

Key details

  • California's private sector employment is reportedly shrinking.
  • The report analyzes business cycles from as far back as March 2001.
  • Wayne Winegarden, a senior fellow at PRI, claims that California's employment market was previously outperforming the national average after the 2007 financial crisis.
  • Since February 2020, non-farm employment growth in California has been less than half that of the national growth rate.
  • Private sector job growth in California is even slower when compared to national trends.
  • Outside of health care, California's private sector is experiencing a decline.
  • Winegarden attributes this decline to unfavorable fiscal and regulatory policies affecting taxes and energy prices.
  • The policies are seen as disincentives for growth and are discouraging residents from living in California.
  • Governor Gavin Newsom has publicly stated that California is performing well in job creation.
  • During his 2026 State of the State address, Newsom emphasized the state's strengths in manufacturing and agriculture.
  • He highlighted California's significant contributions to research and development and its status as a hub for billion-dollar startups.
  • Newsom is expected to run for president in 2028 after his term ends in January 2027.

Context

The findings of this report contrast sharply with the optimistic narrative presented by Governor Newsom regarding California's job market and economic resilience. While the governor touts the state's achievements, the report suggests a more challenging reality for private sector employment.

What happens next

The implications of this report may prompt further discussions about California's economic policies and their effects on job creation, potentially influencing future legislative actions or political campaigns.

What we don't know yet

The report does not provide specific data on the overall number of jobs lost or the sectors most affected by the decline. Additionally, the long-term effects of current policies on California's job market remain unconfirmed.