California Added Only 5,400 Private-Sector Jobs Since 2022

(Bloomberg) -- California’s private sector is lagging significantly behind the broader US post-pandemic jobs recovery, according to an analysis from Stanford University’s Hoover Institution.

While the US economy saw a robust increase of 7.32 million private-sector jobs from January 2022 to June 2024, California’s contribution was negligible, at about 5,400, according to the report published by the think tank on Wednesday.

If California’s growth rate matched the rest of the country, it would have added nearly 970,000 jobs — roughly 180 times the actual increase, according to the report authored by Lee Ohanian, a Hoover Institution fellow and an economics professor at University of California at Los Angeles. California has the world’s fifth-largest economy by GDP, and is home to about 12% of the US population.

Ohanian used data from the Bureau of Labor Statistics to calculate changes in the private-sector employment by subtracting government jobs from the total in the state. Since the start of 2022, he found that practically all job growth in California came from the government. 

Looking at the more recent period of 18 months — at a time when national job growth was booming — the economist found that California lost 46,000 private-sector jobs. 

The total number of jobs in the state remains well below pre-Covid figures, and California is tied with Nevada among states with the highest unemployment rates. 

The numbers underscore the loss of both people and businesses in the Golden State since the pandemic.

California’s population has shrunk by more than 570,000 since 2020, based on Census Bureau data. And in the past week alone, Elon Musk’s social media platform X said would shut down its San Francisco office, and Chevron Corp. announced plans to uproot its Bay Area headquarters. Both companies are moving their headquarters to Texas, where lower taxes and laxer business regulations have drawn a number of firms that once called California home.

In a report last month, California’s non-partisan Legislative Analyst’s Office highlighted significant job declines in the state’s technology sector since 2022, naming Google, Apple, Disney and Netflix as some of the key employers. The report also identified Wells Fargo, Bank of America and Visa among the major players in California’s finance and insurance industry, which also saw a large share of losses.

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