ARTICLE
The past few months have shown a definite shift in California employment markets where, according to the state’s Legislative Analyst’s Office (LAO), private sector jobs in California have declined since the post-pandemic peak while public sector jobs have shown gains. Gains in the public sector and other jobs largely supported by public money have dampened the California labor market, which has seen a big decline in private-industry jobs since their post-pandemic peak, a new analysis shows. The state Legislative Analyst’s Office looked at employment data from the U.S. Bureau of Labor Statistics through April and concluded that private-sector industries in California have lost a total of 340,000 jobs since reaching their peak a couple of years ago. Where are the job losses, and where are the job gains? The tech and finance sectors lead to job losses. Think of jobs in the information sector, where we know our big tech employers like Google, Apple, Facebook, and Disney have declined 16% since the peak. According to the LAO report, there were more than 531,000 jobs in July 2022, but 98,000 of those jobs have disappeared. Employment in the financial sector peaked at 500,000 jobs in December 2021 but has lost 43,000 jobs or 8% since that peak date. Three other industries each saw a 3% drop in jobs since their peaks: business services, manufacturing, and transportation and warehousing. California has a 5.2% unemployment rate, the highest in the nation for the past four months. Meanwhile, the healthcare and social service industries have gained 240,000 jobs since September 2022. The LAO report has included private employers such as dentists, childcare providers, vocational-rehabilitation-focused centers, and others, and the report ties these jobs to government spending. The analysis links these groups with jobs in the public sector, which have grown by 120,000 over the same period (September 2021 to the release of the report). The LAO report is based on 12.5 million jobs in the private sector as of April and a total of 5.5 million jobs evenly divided between the public and publicly supported sectors. As we have stated often in eNews articles over the years, California’s revenue is dependent on personal income tax and high-income earners whose incomes go up, and capital gains taxes pour into the state coffers. When income goes south, so does capital gain revenue to the state. Brooke Armour, the president of the California Center for Jobs and the Economy (the economic information group of the California Business Roundtable that includes the top executives of the state’s largest employers. Armour stated, “All job growth is good.” But she added, "We’re losing high-wage jobs that help fund the (state) budget. We’re gaining hospitality and service jobs, which are low-wage jobs. We’ve hollowed out the middle-class jobs.” Let’s take a look at the local employment for Santa Cruz County. These figures are from May 2024 via the EDD. The unemployment rate is 5.1% for May vs. an April revised rate of 6.8%. Similar to what the state’s LAO report provided, the manufacturing sector (-100 or 1.3% drop, the trade, transportation, and utilities sector (-600 or 3.7% decline and professional businesses services (-400 or 4.0% decline. And there are increases in private education & health services (900 jobs or 4.9% increase), Leisure & Hospitality (300 jobs or 3.0% increase) and government (600 jobs or 3.9% increase). So, one question that keeps popping up in casual conversations at the dinner table — is it the economy — that leads the discussion as we head into a busy election cycle. I won’t digress about the top two presidential candidates, but to say — I have never seen so much political dysfunction in my career dating back decades of being involved in national, state and local government since the 1960s. The latest Gallup Poll conducted in June shows that 21% responded “satisfied” and 77% responded “dissatisfied” with where the country is going and the economy was the Number 1 issue on survey respondents' minds, with 36% citing either the economy in general or wage issues, unemployment, and inflation are priority concerns. The polling results have been persistent for the past two years. Consequently, inflation continues to loom large over Americans’ evaluations of the country and the economy. According to another survey, 23 percent of U.S. adults say the economy is in excellent or good shape today, down from 28 percent in January but slightly higher than the 20 percent who rated the economy positively a year ago. The most recent ABC News/Ipsos poll found that the economy and inflation remain the most important issues for Americans when determining who they might support for president in November. The economy and inflation received 88 and 85 percent responses, respectively, as the most important issues affecting presidential support. Nearly half of Americans said that these are the single most important issues for them. The share of Americans who rate their personal finances as excellent or good declined from 52 percent in 2021 to about 42 percent in 2022 and is sinking to 41 percent today. There is very little divide between Americans identifying by political party. What is more relevant, however, is that Americans believe their personal finances are in the weakest of conditions since the survey began in 2019. And it’s not that they are earning less money; it’s that inflation and high interest rates have eroded the ability of those with finances to acquire needed goods and services today. Clearly, this poll and the Pew Research Survey are both consistent with other surveys, such as the University of Michigan Consumer Sentiment study, which routinely monitors how U.S. consumers rate the economy. Sentiment in that survey has gradually ticked up since 2022, but the level of optimism is still well below expectations based on current economic data. In summary, Americans are not happy with the current state of the U.S. economy, and this typically affects elections, especially presidential elections every four years. Consequently, other issues of concern, numbers 2 and 3 by Gallup, such as immigration and poor government leadership, may not really matter in the grand scheme of things. “It’s still the economy stupid,” as James Carville said during the Clinton-Bush campaign back in 1992. And because he turned out to be correct, we’ve been repeating that mantra during all presidential elections since. Polls are selective opinions at a given point in time. In the next sixty to ninety days anything can happen that can swing public opinion. Let’s see if Carville’s theory holds true.
The past few months have shown a definite shift in California employment markets where, according to the state’s Legislative Analyst’s Office (LAO), private sector jobs in California have declined since the post-pandemic peak while public sector jobs have shown gains. Gains in the public sector and other jobs largely supported by public money have dampened the California labor market, which has seen a big decline in private-industry jobs since their post-pandemic peak, a new analysis shows. The state Legislative Analyst’s Office looked at employment data from the U.S. Bureau of Labor Statistics through April and concluded that private-sector industries in California have lost a total of 340,000 jobs since reaching their peak a couple of years ago.
Where are the job losses, and where are the job gains? The tech and finance sectors lead to job losses. Think of jobs in the information sector, where we know our big tech employers like Google, Apple, Facebook, and Disney have declined 16% since the peak. According to the LAO report, there were more than 531,000 jobs in July 2022, but 98,000 of those jobs have disappeared. Employment in the financial sector peaked at 500,000 jobs in December 2021 but has lost 43,000 jobs or 8% since that peak date.
Three other industries each saw a 3% drop in jobs since their peaks: business services, manufacturing, and transportation and warehousing. California has a 5.2% unemployment rate, the highest in the nation for the past four months.
Meanwhile, the healthcare and social service industries have gained 240,000 jobs since September 2022. The LAO report has included private employers such as dentists, childcare providers, vocational-rehabilitation-focused centers, and others, and the report ties these jobs to government spending. The analysis links these groups with jobs in the public sector, which have grown by 120,000 over the same period (September 2021 to the release of the report). The LAO report is based on 12.5 million jobs in the private sector as of April and a total of 5.5 million jobs evenly divided between the public and publicly supported sectors.
As we have stated often in eNews articles over the years, California’s revenue is dependent on personal income tax and high-income earners whose incomes go up, and capital gains taxes pour into the state coffers. When income goes south, so does capital gain revenue to the state.
Brooke Armour, the president of the California Center for Jobs and the Economy (the economic information group of the California Business Roundtable that includes the top executives of the state’s largest employers. Armour stated, “All job growth is good.” But she added, "We’re losing high-wage jobs that help fund the (state) budget. We’re gaining hospitality and service jobs, which are low-wage jobs. We’ve hollowed out the middle-class jobs.”
Let’s take a look at the local employment for Santa Cruz County. These figures are from May 2024 via the EDD. The unemployment rate is 5.1% for May vs. an April revised rate of 6.8%. Similar to what the state’s LAO report provided, the manufacturing sector (-100 or 1.3% drop, the trade, transportation, and utilities sector (-600 or 3.7% decline and professional businesses services (-400 or 4.0% decline. And there are increases in private education & health services (900 jobs or 4.9% increase), Leisure & Hospitality (300 jobs or 3.0% increase) and government (600 jobs or 3.9% increase).
So, one question that keeps popping up in casual conversations at the dinner table — is it the economy — that leads the discussion as we head into a busy election cycle. I won’t digress about the top two presidential candidates, but to say — I have never seen so much political dysfunction in my career dating back decades of being involved in national, state and local government since the 1960s. The latest Gallup Poll conducted in June shows that 21% responded “satisfied” and 77% responded “dissatisfied” with where the country is going and the economy was the Number 1 issue on survey respondents' minds, with 36% citing either the economy in general or wage issues, unemployment, and inflation are priority concerns. The polling results have been persistent for the past two years.
Consequently, inflation continues to loom large over Americans’ evaluations of the country and the economy.
According to another survey, 23 percent of U.S. adults say the economy is in excellent or good shape today, down from 28 percent in January but slightly higher than the 20 percent who rated the economy positively a year ago.
The most recent ABC News/Ipsos poll found that the economy and inflation remain the most important issues for Americans when determining who they might support for president in November. The economy and inflation received 88 and 85 percent responses, respectively, as the most important issues affecting presidential support. Nearly half of Americans said that these are the single most important issues for them.
The share of Americans who rate their personal finances as excellent or good declined from 52 percent in 2021 to about 42 percent in 2022 and is sinking to 41 percent today. There is very little divide between Americans identifying by political party. What is more relevant, however, is that Americans believe their personal finances are in the weakest of conditions since the survey began in 2019. And it’s not that they are earning less money; it’s that inflation and high interest rates have eroded the ability of those with finances to acquire needed goods and services today.
Clearly, this poll and the Pew Research Survey are both consistent with other surveys, such as the University of Michigan Consumer Sentiment study, which routinely monitors how U.S. consumers rate the economy. Sentiment in that survey has gradually ticked up since 2022, but the level of optimism is still well below expectations based on current economic data.
In summary, Americans are not happy with the current state of the U.S. economy, and this typically affects elections, especially presidential elections every four years.
Consequently, other issues of concern, numbers 2 and 3 by Gallup, such as immigration and poor government leadership, may not really matter in the grand scheme of things. “It’s still the economy stupid,” as James Carville said during the Clinton-Bush campaign back in 1992. And because he turned out to be correct, we’ve been repeating that mantra during all presidential elections since. Polls are selective opinions at a given point in time. In the next sixty to ninety days anything can happen that can swing public opinion. Let’s see if Carville’s theory holds true.