California’s Job Market Shift: A Closer Look at the Numbers
In a recent report from the California Center for Jobs and the Economy, it was revealed that California has lost 173,000 fully private sector jobs since January 2023. However, this loss was offset by a gain of 181,100 largely part-time government and government-supported jobs. This shift in the job market has raised concerns about the state’s economic health and the quality of the new jobs being created.
The report highlighted that 38% of the new government and government-supported jobs are from elderly or disabled individuals using state funds to pay household members and others minimum wage for part-time care and assistance. This trend indicates a reliance on taxpayer-funded programs to support vulnerable populations, rather than creating sustainable private sector employment opportunities.
Furthermore, while hourly wages in California have increased, average hours worked have decreased. This suggests that employers may be cutting hours to reduce labor costs, particularly those imposed by the state’s sector-based minimum wages. This shift in the labor market dynamics raises questions about the long-term sustainability of job growth in the state.
The report also pointed out that the majority of the new taxpayer-funded jobs were in the healthcare and social assistance sector. Specifically, 124,800 of the 181,100 new jobs were in this industry, with 55% of them coming from the government’s household care program. This reliance on government-funded programs to create jobs underscores the lack of private sector growth in California.
In contrast, the report noted that only “green” energy and transportation jobs experienced any growth in the private sector. Trade-related jobs in transportation, trade, and utilities were highlighted as the one bright spot in the state’s recovery progress. However, the report cautioned that California’s lead in this area is facing increasing competition from other regions, signaling potential challenges ahead.
The report’s findings raise concerns about the quality of the new jobs being created in California. The California Center for Jobs and the Economy warned that the state has not expanded its tax base but instead used it to cover its competitive weakness for private sector jobs. The jobs being created are predominantly minimum wage, part-time, and limited-term positions, rather than the “good-paying” jobs promised in the state’s economic development goals.
Looking ahead, the Legislative Analyst’s Office has projected significant costs for the state’s In-Home Supportive Services (IHSS) program in the coming fiscal year. Governor Gavin Newsom has proposed a $28.5 billion budget for IHSS due to an estimated increase in caseload and labor costs. The growing demand for IHSS services, coupled with demographic changes and rising costs, could further strain the state’s budget in the future.
Overall, the shift in California’s job market towards government and government-supported jobs raises concerns about the state’s economic sustainability and the quality of employment opportunities being created. As the state grapples with budget deficits and demographic changes, addressing these challenges will be crucial to ensuring long-term economic prosperity for all Californians.
