California News:
California Governor Gavin Newsom is on a public relations campaign, hawking his state as the Greatest Of All Time – in everything.
While California’s natural beauty remains, and once used to be the land of opportunity, the Golden State has some very noticeable tarnish as well. If the California media actually reported the economic facts, Gov. Newsom might be forced to limit his PR campaign to tourism, instead of claiming everything is coming up roses.
Context is needed, even as Gov. Newsom sings California’s praises from the top of the Golden Gate Bridge in this cool video:
California’s tourism just hit an ALL TIME HIGH. pic.twitter.com/98syiCUSCt
— Gavin Newsom (@GavinNewsom) May 5, 2024
As a California native, I know just how beautiful so much of California is – all 164,000 square miles of it.
But, we do have some serious issues, which are impacting the state’s economy – and this article is not about California’s high crime and serial theft crisis, or the homeless crisis.
“High income inequality in California coincides with high levels of poverty and stagnant upward mobility,” the Public Policy Institute of California reported in January. That is our reality, and is the result of poor public policy.
Gov. Newsom claims California:
has the most equitable tax system in the entire country (WTH?),
is #1 in the nation for new business starts (but IPOs are down),
#1 for access to venture capital funding, and
the #1 state for tourism spending, manufacturing, high-tech, and agriculture.”
and
California remains the 5th largest economy in the world for the seventh consecutive year, with a nominal GDP of nearly $3.9 trillion in 2023 and a growth rate of 6.1%
Let’s get one thing straight – California’s income, sales, and gas taxes are among the highest in the nation. It is this tax burden which has caused people and businesses to leave the state.
So while California remains the 5th largest economy in the world, California also is home to 1/3 of the nation’s welfare recipients – the highest in the country:
“California’s high cost of living plays a significant role in California’s poverty rate. The existence of so much poverty amid such widespread wealth highlights the high level of economic inequality in the state,” CATO reported. “Using the traditional Gini coefficient measure of economic inequality, California ranks as the nation’s fifth most unequal state (see Figure 2).6 This is particularly problematic because much of this inequality stems from government policies, both historical and ongoing.”
California’s economy has shifted from a predominately manufacturing economy to a service economy increasingly made up of part time and minimum wage jobs. However, it remains the largest manufacturing economy in the country, based on sheer numbers.
Gov. Newsom reports:
“California remains the 5th largest economy in the world for the seventh consecutive year, with a nominal GDP of nearly $3.9 trillion in 2023 and a growth rate of 6.1%.”
Notably, California’s Gross State Product (GDP) in 2004 according to the Legislative Analyst’s Office was nearly $1.5 trillion,” and the Statewide Median Average home price was $474,000.
In 2024, the Statewide Median Average home price is almost double at $822,200, according to the California Association of Realtors.
Also in 2004, “California Manufacturing declined by almost 160,000 jobs, reflecting major reductions in high-tech jobs in 2001 and 2002,” the LAO reported.
Half of all of jobs in California are public sector government jobs, or public sector related.
Unemployment is up again, and is highest in the country at 5.3%.
Tech layoffs are continuing, with more expected.
California saw fewer IPOs in 2023.
The Governor’s budget surplus turned into a $73 billion budget deficit.
The Associated Press reported at US News:
“California‘s unemployment rate is now the highest in the country, reaching 5.3% in February following new data that revealed job growth in the nation’s most populous state was much lower last year than previously thought.
California lost a staggering 2.7 million jobs at the start of the coronavirus pandemic, losses brought on by Gov. Gavin Newsom’s stay-at-home order, which forced many businesses to close.”
But this year, while the data initially showed California added 300,000 jobs between September 2022 and September 2023, the corrected numbers released earlier this month show the state added just 50,000 jobs during that period.
Last year, the preliminary numbers showed California added 9,900 jobs in July. But the corrected numbers show the state actually lost about 41,400 jobs that month.
How does a state have an employment swing of “9,900 jobs added” to a loss of 41,400 jobs? It doesn’t. This is the game California always plays with employment numbers to make things look rosy at first, then quietly adjusts the next quarter.
Gov. Newsom says:
More people are moving to California and the state’s population is expected to continue to experience positive growth.
California’s population increased by 67,000 people last year to 39,128,162, according to new data released today by the California Department of Finance (DOF). The state’s population growth can be attributed to an increase in legal foreign immigration and natural population increasing.
The state’s population in 2004 was 36 million, adding more than half- a-million people yearly, the LAO reported. We are not adding 500,000 people any longer.
The Department of Finance reports, “Natural increase – the net result of births minus deaths — increased from 106,700 in 2022 to 118,400 in 2023 as the number of deaths decline from their pandemic peak.” Did the population really increase, or did the pandemic-related deaths cease?
We note, deaths were markedly higher in 2020 than previous years, during the Covid-19 pandemic: “40,538 more people died in 2020 than the average of the previous three years,” the Daily Democrat reported. “The dramatic 15% increase in deaths over the average of the previous three years is significantly more than the nearly 26,000 deaths that state health officials attributed to COVID-19 as of the end of the year.”
California’s Economy
The Public Policy Institute of California reported in January:
“Californians are deeply concerned about the state’s economic future. Nearly two in three Californians expect bad economic times in the coming year. Seven in ten believe the state’s children will be worse off financially than their parents.”
Sadly, the PPIC sums up where we find our state:
High income inequality in California coincides with high levels of poverty and stagnant upward mobility. About 5 million Californians cannot meet their basic needs and it has gotten harder to climb the economic ladder over time. Sky-high housing costs have left many—especially younger, lower-income, and nonwhite residents—without the meaningful opportunity to own a home, a vital path to wealth creation for earlier generations. And in our increasingly knowledge-based economy, a college degree is key to economic mobility, but college affordability and debt are limiting the viability of this pathway for those who might benefit the most.”
Context.
Click this link for the original source of this article.
Author: Katy Grimes
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