California has seen job openings plunge 30% this year even as its unemployment rate has spiked — as businesses and residents alike fled the high taxes and soaring cost of living in Gov. Gavin Newsom’s state.
The Democrat-run stronghold — where Newsom implemented a controversial $20 minimum wage hike for fast food workers in April — had 641,000 job openings in August, compared to 920,000 in August 2023, according to new data from the Bureau of Labor Statistics showed.
Meanwhile, the year-over-year unemployment rate in September increased to 5.3% from 5% — more than a percentage point above the national rate of 4.1% and the second worst in the US, the data showed. Only Nevada had a higher jobless rate at 5.6%.
The state’s high taxes, along with rampant crime since the pandemic from progressive policies, has led to an exodus by several large companies to business-friendly havens. Elon Musk’s X and Tesla, as well as Oracle; Chevron, Kelly Moore Paints, and investment firm Charles Schwab, have relocated to Texas in the past few years.
“High taxes and high costs are woes to their economy,” Mahoney Asset Management CEO Ken Mahoney told The Post. “It is no surprise [why] people and businesses continue to flee the state.”
California was ranked as the top state for outmigration in 2024 — with an expected net loss of more than 10,000 residents, according to a report by Consumer Affairs based on a sample of more than 100,000 people with an interest in moving.
The median sale price for a single-family home in California surpassed $900,000 for the first time this year, according to the California Association of Realtors.
“In general, the extremely high cost of living in the state and unaffordable housing in major cities has resulted in many employers struggling to hire entry level jobs in retail, construction and home care despite minimum wage growth in fast food,” Ted Jenkin, co-founder and business consultant at oXYGen Financial, told The Post.
The state has also seen a massive decrease in private sector jobs, while government jobs have skyrocketed.
Since September 2022, California has lost a net 154,000 jobs in the private sector and gained 361,000 jobs in the public sector, according to the Legislative Analyst’s Office, California’s nonpartisan fiscal and policy advisor.
“Our small-business-owning members have been telling us for many months that finding qualified employees has been a top problem for them, muscled out lately only by inflation,” National Federation of Independent Business California Director John Kabateck told conservative news outlet The Center Square.
“Some of the decline in job openings can be attributed to them just giving up.”
Added Jenkin: “Tech companies overhired post-pandemic as they ramped back up in 2020 and 2021 and are not experiencing the growth to maintain those hires.”
The $20 minimum wage law, signed last fall by Newsom, has been blamed for job cuts and store closures across the state as employers struggle to keep up with rising costs.
Between last fall and January, California fast-food restaurants slashed 9,500 jobs in anticipation of the new wage requirements, according to a report by the Hoover Institution in April, when the new law took effect.
Employers like Pizza Hut and Round Table Pizza began by firing more than 1,000 delivery drivers, while others like El Pollo Loco and Jack in the Box said they will ramp up the use of robotics to slim down their staff, according to the report.
The higher minimum wage – up from $16 an hour last year – has led to menu price increases and restaurant closures, including Shake Shack and taco chain Rubio’s Coastal Grill.
The federal jobs data does suggest that California is continuing to create new jobs in aggregate, even though the unemployment rate remains at 5.3%.
“California’s economy — the 5th largest in the world — is accelerating, outpacing last year’s economic growth, and leading the nation in job growth for over 25 years,” a spokesperson for Newsom told The Post. “This summer, California created nearly one in five of the nation’s new jobs.”
California has seen an average growth of 16,500 jobs per month at an annual rate of 1.1%, above last year’s 0.9% pace of 12,900 jobs a month, according to Newsom’s office.
In October, California gained thousands of new jobs for the 53rd month in a row, according to a press release from Newsom’s office.
“California’s growth is powered by its workers and innovators, the driving forces behind our consistent economic growth and expanding job market,” Newsom said in a statement.
