California has experienced a 30% drop in job opportunities this year, despite an increase in unemployment, as businesses and residents flee the state’s high taxes and skyrocketing cost of living under Gov. Gavin Newsom.
The Democrat-controlled stronghold, where Newsom pushed a contentious $20 minimum wage rise for fast food workers in April, had 641,000 job openings in August, compared to 920,000 in August 2023, according to new Bureau of Labor Statistics data.
Meanwhile, the year-over-year unemployment rate in September rose from 5% to 5.3%, more than a percentage point higher than the national rate of 4.1% and the second worst in the United States, according to the data. Only Nevada had a higher unemployment rate, at 5.6%.
The state’s high taxation, combined with rampant crime caused by progressive policies since the pandemic, have prompted some significant corporations to relocate to more business-friendly jurisdictions. Elon Musk’s X and Tesla, as well as Oracle, Chevron, Kelly Moore Paints, and the investment giant Charles Schwab, have all relocated to Texas in recent 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 classified as the top state for outmigration in 2024, with an estimated net loss of more than 10,000 individuals, according to a Consumer Affairs survey based on a sample of over 100,000 people who want to move.
The typical sale price of a single-family home in California exceeded $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 significant reduction in private-sector jobs, while government occupations have increased dramatically.
According to the Legislative Analyst’s Office, California’s impartial fiscal and policy advisor, since September 2022, the state has lost a net 154,000 jobs in the private sector while adding 361,000 positions in the public sector.
“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.”
“Tech companies overhired post-pandemic as they ramped back up in 2020 and 2021 and are not experiencing the growth to maintain those hires,” Jenkin added.
The $20 minimum wage law, passed by Newsom last autumn, has been blamed for job losses and retail closures across the state as businesses fight to keep up with escalating costs.
According to a Hoover Institution analysis published in April, when the new law went into effect, California fast-food outlets cut 9,500 positions between last fall and January in preparation of the new wage requirements.
Employers such as Pizza Hut and Round Table Pizza began by firing over 1,000 delivery drivers, while others such as El Pollo Loco and Jack in the Box announced plans to increase the usage of robotics to reduce their workforce, according to the research.
The increased minimum wage – up from $16 per hour last year – has resulted in menu pricing increases and restaurant closures, including Shake Shack and taco chain Rubio’s Coastal Grill.