Governor Gavin Newsom’s recent celebration of California’s job growth paints an incomplete picture of the state’s economic reality.
A new report from the nonpartisan Legislative Analyst’s Office (LAO) reveals a concerning trend: while overall employment has increased, the private sector is shrinking.
Since September 2022, California has added 207,000 jobs.
However, this headline figure obscures a critical shift.
The private sector lost 154,000 jobs during this period, while public and public-supported sectors grew by 361,000 positions.
In essence, government-related hiring is propping up the state’s employment numbers.
Newsom highlighted California’s role in national job creation, stating, “16% of all national job creation last month came right here in California.”
While factually correct, this statement fails to address the underlying imbalance between public and private sector growth.
Newsom brags about California job growth, new report finds it is all government https://t.co/1ko51cqEOk
— John Solomon (@jsolomonReports) July 2, 2024
The exodus of private sector jobs raises red flags about California’s economic health.
As businesses leave and self-employment opportunities diminish, the state risks becoming overly reliant on government employment.
This trend could stifle innovation and economic dynamism.
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Republican lawmakers have long warned of this scenario.
Adding to the concerns, California’s unemployment rate has jumped from 3.8% in 2022 to 5.2% today.
This increase has triggered the Sahm Recession Indicator, a warning sign used by economists to predict potential downturns.
In response to fiscal pressures, Newsom and legislators have agreed to cut or defer $47 billion in spending this year.
However, given the state’s growing dependence on government spending for job creation, these cuts could further jeopardize employment growth.
In 2022 Gavin Newsom stated CA has a surplus of $100 billion dollars. “$100B SURPLUS”
In 2024, California is facing a record budget deficit of $68 billion. “$68B DEFICIT”
Democrats have done to CA what they’ve done to America. This is intentional.
NEVER NEWSOM in the WH! pic.twitter.com/hb5KC1SePv
— Sheri™ (@FFT1776) June 30, 2024
The disparity between public and private sector employment growth points to deeper issues within California’s economic policies.
High taxes, stringent regulations, and an increasing cost of living may be deterring businesses and driving the private sector contraction.
The current trajectory suggests a shift towards a more government-centric economy, potentially at the expense of private sector vitality. This trend raises questions about long-term sustainability and economic competitiveness.
In conclusion, while Governor Newsom touts job creation, the underlying data reveals a potentially troubling economic picture.
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The state’s reliance on public sector growth to offset private sector losses suggests that California’s economy is heading for a serious crash.
