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California’s Lofty Boasts: Reality Check
Gavin Newsom delights in touting California’s achievements. As he puts it, the state leads the way in numerous fields. However, these boasts often falter against the harshness of reality.
Budget Surplus: More Fiction than Fact
Consider his 2022 claim of a $97.5 billion budget surplus. Newsom proudly stated, “No other state in history has ever experienced a surplus as large as this.” Yet, that assertion unravelled. The supposed surplus was based on faulty revenue estimates, off by a whopping $165 billion over four years. This error consequently birthed multibillion-dollar budget deficits.
The Economy: Appearances Can Be Deceptive
Recently, Newsom boasted that California, were it a country, would possess the world’s fourth-largest economy at $4.1 trillion. “California isn’t just keeping pace with the world — we’re setting the pace,” Newsom exclaimed. Notwithstanding, this claim owes much to currency exchange rates rather than pure economic might. Despite these figures, California’s economic reality is less rosy.
Sluggish Economic Growth
Gabe Petek, the Legislature’s budget analyst, painted a more sobering picture late last year: “California’s economy has been in an extended slowdown for the better part of two years.” He pointed to a soft labor market and dwindling consumer spending. This gradual deceleration mirrors a sluggish economy.
Recent employment data echo these concerns. As of April, California’s unemployment rate lingered at 5.3%, higher than all but two other states, Michigan and Nevada. This rate has stubbornly persisted for years.
The Housing Conundrum
Beacon Economics, in their breakdown of April’s figures, remarked, “Since February 2020, the state’s labor force has grown by just 126,100 workers, a mere 0.6% increase.” They attributed this to California’s chronic housing shortage and retiring workers.
Justin Niakamal, Beacon’s research manager, laments, “It’s difficult to see how California will break out of its slow-growth cycle.” The absence of housing production is a fundamental issue affecting population and economic growth.
The Tech Sector: Ailing Pillar
The San Francisco Bay Area’s technology industry, once the state’s economic stalwart, is shedding jobs. The pandemic initially spurred industry expansion to cater to remote work. Now, it’s contracting monthly.
Stark Employment Picture
While Newsom relies on the Bureau of Labor Statistics for economic accolades, he overlooks a grim report. California harbors over a million unemployed. The Bureau highlights a disquieting ratio: 1.6 job seekers for every available job. If all job openings were filled, hundreds of thousands would still remain jobless.
That, indeed, is nothing to boast about.
Dan Walters has been a journalist for nearly 60 years, with most of his career spent with California newspapers. With over 9,000 columns written, he offers insights on the state’s politics for CalMatters.org, a nonprofit, non-partisan media outlet.
