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Workforce Santa Cruz County has released its 2026 State of the Workforce Report, a comprehensive look at the county's labor market, industry trends, and economic outlook prepared in partnership with BW Research Partnership. The report draws on data from the California Employment Development Department, the U.S. Census Bureau, and the U.S. Bureau of Labor Statistics to paint a detailed picture of where our local economy stands and where it is headed. The findings highlight a county at a crossroads. Population has declined by 3.3 percent since 2019, employment growth remains modest compared to the state, and a majority of local jobs fall into the lowest-paying occupational category tracked in the report. At the same time, Healthcare, Education, and Tourism continue to anchor the local economy, and emerging opportunities in apprenticeships and workforce training point toward paths for improvement. The Santa Cruz Chamber of Commerce holds a seat on the Workforce Development Board, giving our local business community a direct voice in shaping the priorities reflected in this report. The Chamber also partners with Workforce Santa Cruz County to host monthly industry-specific roundtable meetings, where employers can discuss hiring challenges, workforce trends, and training needs directly with workforce development leaders. These roundtables are one of the ways the Chamber works to ensure that local business perspectives inform countywide workforce strategy, and that businesses stay ahead of the trends outlined in reports like this one. Key Takeaways for Small Businesses The labor pool is tightening. The county's population shrank between 2022 and 2025, and fewer working-age residents are participating in the labor force compared to state and national levels. Unemployment has also climbed over the same period. Together, these trends mean businesses may continue to face a smaller and more competitive pool of local workers, making retention strategies and flexible hiring practices increasingly important. Residents are leaving the county for work. The gap between local jobs and the workers needed to fill them has grown substantially since 2023, particularly in management, business, science, and arts roles. Local businesses may need to work harder to compete with outside employers for skilled talent, including through wages, remote flexibility, or career advancement opportunities. Job quality remains a structural challenge. A larger share of county jobs fall into lower-paying, lower-skill categories than the statewide average. Businesses that can offer pathways into higher-tier roles, even informally through training and advancement, may have an edge in attracting and keeping employees. AI and automation exposure varies widely by industry. Higher-earning sectors like information and computer technology carry the greatest automation risk, with a substantial share of those workers vulnerable to having parts of their jobs taken over by AI-assisted coding and development tools. Meanwhile, Healthcare and Education remain comparatively insulated because so much of the work in those fields depends on direct human care and interaction. Businesses in more exposed industries should begin thinking now about how AI literacy and upskilling fit into their workforce planning. Apprenticeships are an underused tool. The county currently has only a handful of major apprenticeship providers, notably fewer than neighboring regions like San Jose offer. For small businesses, particularly in healthcare, education, trades, and technical fields, apprenticeship partnerships with Cabrillo College, UC Santa Cruz, or other local providers may offer a practical way to build a pipeline of trained workers while reducing recruitment costs. Housing costs continue to shape hiring. While home prices have leveled off since their 2022 peak, the county's median home price remains well above the statewide median. This continues to affect workers' ability to live near where they work and is a factor employers should weigh when thinking about commute distances and remote work options. Taken together, these findings point to a local economy that is resilient in some respects but facing real headwinds in others. For Santa Cruz County small businesses, the report is less a cause for alarm than a call to plan ahead: investing in retention, exploring apprenticeship partnerships, and staying informed about how automation may reshape specific roles can help position your business for the years ahead. We encourage members to read the full report and reach out to the Chamber with any questions about what these trends mean for your industry.
Workforce Santa Cruz County has released its 2026 State of the Workforce Report, a comprehensive look at the county's labor market, industry trends, and economic outlook prepared in partnership with BW Research Partnership. The report draws on data from the California Employment Development Department, the U.S. Census Bureau, and the U.S. Bureau of Labor Statistics to paint a detailed picture of where our local economy stands and where it is headed.
The findings highlight a county at a crossroads. Population has declined by 3.3 percent since 2019, employment growth remains modest compared to the state, and a majority of local jobs fall into the lowest-paying occupational category tracked in the report. At the same time, Healthcare, Education, and Tourism continue to anchor the local economy, and emerging opportunities in apprenticeships and workforce training point toward paths for improvement.
The Santa Cruz Chamber of Commerce holds a seat on the Workforce Development Board, giving our local business community a direct voice in shaping the priorities reflected in this report. The Chamber also partners with Workforce Santa Cruz County to host monthly industry-specific roundtable meetings, where employers can discuss hiring challenges, workforce trends, and training needs directly with workforce development leaders. These roundtables are one of the ways the Chamber works to ensure that local business perspectives inform countywide workforce strategy, and that businesses stay ahead of the trends outlined in reports like this one.
Key Takeaways for Small Businesses
The labor pool is tightening. The county's population shrank between 2022 and 2025, and fewer working-age residents are participating in the labor force compared to state and national levels. Unemployment has also climbed over the same period. Together, these trends mean businesses may continue to face a smaller and more competitive pool of local workers, making retention strategies and flexible hiring practices increasingly important.
Residents are leaving the county for work. The gap between local jobs and the workers needed to fill them has grown substantially since 2023, particularly in management, business, science, and arts roles. Local businesses may need to work harder to compete with outside employers for skilled talent, including through wages, remote flexibility, or career advancement opportunities. Job quality remains a structural challenge. A larger share of county jobs fall into lower-paying, lower-skill categories than the statewide average. Businesses that can offer pathways into higher-tier roles, even informally through training and advancement, may have an edge in attracting and keeping employees.
AI and automation exposure varies widely by industry. Higher-earning sectors like information and computer technology carry the greatest automation risk, with a substantial share of those workers vulnerable to having parts of their jobs taken over by AI-assisted coding and development tools. Meanwhile, Healthcare and Education remain comparatively insulated because so much of the work in those fields depends on direct human care and interaction. Businesses in more exposed industries should begin thinking now about how AI literacy and upskilling fit into their workforce planning.
Apprenticeships are an underused tool. The county currently has only a handful of major apprenticeship providers, notably fewer than neighboring regions like San Jose offer. For small businesses, particularly in healthcare, education, trades, and technical fields, apprenticeship partnerships with Cabrillo College, UC Santa Cruz, or other local providers may offer a practical way to build a pipeline of trained workers while reducing recruitment costs.
Housing costs continue to shape hiring. While home prices have leveled off since their 2022 peak, the county's median home price remains well above the statewide median. This continues to affect workers' ability to live near where they work and is a factor employers should weigh when thinking about commute distances and remote work options.
Taken together, these findings point to a local economy that is resilient in some respects but facing real headwinds in others. For Santa Cruz County small businesses, the report is less a cause for alarm than a call to plan ahead: investing in retention, exploring apprenticeship partnerships, and staying informed about how automation may reshape specific roles can help position your business for the years ahead. We encourage members to read the full report and reach out to the Chamber with any questions about what these trends mean for your industry.