LOS ANGELES, CA – Despite Governor Gavin Newsom frequently pointing to California as the world’s fourth-largest economy, new federal data shows the Golden State is struggling with jobs — holding the highest unemployment rate of any U.S. state.
California’s Unemployment Rate Remains the Highest
According to the U.S. Bureau of Labor Statistics (BLS), California recorded an unemployment rate of 5.5% in August 2024, unchanged from July. That makes it the only state above 5.5% and places it at the top of the unemployment list nationwide.
- National unemployment rate (August): 4.3%
- California unemployment rate (August): 5.5%
- Nevada unemployment rate: 5.3% (2nd highest)
- Washington State: 4.5%
- Oregon: 5%
- D.C.: 6% (higher than all states)
Meanwhile, states like Utah (3.3%), Arizona (4.1%), and Colorado (4.2%) are performing significantly better.
Why California Struggles With Jobs
Experts say California’s unemployment problem is multi-faceted:
- High cost of living: Housing costs are among the highest in the nation.
- Gas prices: California’s average sits at $4.655 per gallon, compared to the national average of $3.171, according to AAA.
- Minimum wage law: The state’s $20 per hour fast-food minimum wage has forced many restaurants to cut staff, replacing workers with self-service kiosks and touch screens.
- Regulations: Businesses complain of burdensome state rules, which make hiring more expensive.
Dr. Wayne Winegarden, senior fellow at the Pacific Research Institute, told The Center Square:
“It’s too costly for companies to hire people here. We’re not adding enough jobs — less than 4,000 per month.”
California added just 3,800 net payroll jobs in August, far below the growth needed to keep up with its workforce.
Job Growth Trends
While California lags behind in manufacturing, the state is seeing some growth in:
- Healthcare and nursing (due to the aging baby boomer population)
- Retail employment
However, these gains are not enough to offset the decline in fast-food and manufacturing jobs.
Companies Leaving the State
Winegarden also highlighted that several high-profile companies have moved operations out of California to Texas and other business-friendly states.
Though Newsom touts California’s position as the fourth-largest economy, Winegarden argued this ranking only happened because Germany slipped into fifth place due to stagnant growth — not because California is thriving.
Possible Solutions
Economists say California must:
- Reevaluate its minimum wage policies
- Reduce regulatory burdens on businesses
- Focus on creating sustainable jobs rather than relying on incentives like tax credits for Hollywood productions, which Winegarden called “a bad deal.”
Call for Discussion
What do you think is driving California’s high unemployment rate?
Should the state focus on rolling back wage laws and reducing regulations, or are other strategies needed to create sustainable jobs?
Share your thoughts in the comments below.
