Opinion: Why is Gov. Newsom boasting about California’s weak economy?
Shipping containers at the Port of San Diego File photo by Chris Stone Times of San Diego This column was originally published by CalMatters Sign up for their newsletters Gavin Newsom loves to boast about the state he governs claiming that California is No in several category or that the state is leading in various economic or cultural activity Sometimes his boasts crumble in the face of reality such as his declaration that the state budget had a billion surplus and no other state in American history has ever experienced a surplus as large as this It was later revealed that the surplus claim was based on revenue estimates that were wrong by billion over four years leading to multibillion-dollar budget deficits Undeterred Newsom has continued his boastful options A sparse weeks ago bragged that California were it a nation now has the world s fourth-largest economic system at trillion edging out Japan California isn t just keeping pace with the world we re setting the pace Newsom cheered Our financial market is thriving because we invest in people prioritize sustainability and believe in the power of innovation Really California s edge over Japan is more the consequence of currency exchange calculations rather than productivity but trillion is still a big number Unfortunately its size masks the darker reality that by various measures California is doing no better than treading water As the Legislature s budget analyst Gabe Petek noted in a overview on California s budget situation late last year California s business sector has been in an extended slowdown for the better part of two years characterized by a soft labor arena and weak consumer spending While this slowdown has been gradual and the severity milder than a recession a look at latest economic facts paints a picture of a sluggish economic activity Outside of authorities and fitness care the state has added no jobs in a year and a half What Petek described six months ago is still true as newest employment material indicate In April the state s unemployment rate was higher than all but two other states Michigan and Nevada and it s been stuck at that elevated relative position for several years Since February the state s labor force has grown by just workers a increase Beacon Economics declared in an analysis of the April records adding This slower rise is being driven largely by the state s chronic housing shortage and the retirement of aging workers Justin Niakamal Beacon s research manager says it s formidable to see how California will be able to break out of its slow-growth cycle when there has been virtually no increase in housing production This is an elemental matter that is impacting the state s ability to grow its population industry and market A major indication of California s relatively moribund financial system is what has been happening in the San Francisco Bay Area s hardware industry a sector that in essence has been propping up the entire state in new years Having expanded during the COVID- pandemic to serve those confined to their homes and working remotely the industry has been shedding jobs month by month While Newsom cited numbers from the federal Bureau of Labor Statistics in claiming that California now had the globe s fourth-largest financial market he didn t trumpet a latest bureau assessment that underscores the state s poor employment picture California has more than a million unemployed workers The new bureau account reveals that the ratio of jobless workers to job openings is the highest of any state jobseekers for every one open job To put that information point another way if every job opening in California were to be filled we d still have hundreds of thousands of Californians on the unemployment rolls That s nothing to brag about CalMatters is a nonpartisan and nonprofit news organization bringing Californians stories that probe explain and explore solutions to quality of life issues while holding our leaders accountable Want to submit a letter to the editor guest column or opinion piece Find our guidelines and submission form here
