OPINION (RED STATE) – In the ongoing debate over government spending and its impact on job growth, the latest news from California reveals a harsh reality. While the public sector has seen an increase in jobs supported by tax dollars, the private industry — the backbone of any strong economy — has experienced a significant decline.
According to a recent analysis by the state Legislative Analyst’s Office, private-sector industries in California have lost a staggering 340,000 jobs since their peak a couple of years ago. The tech and finance sectors, which were once major drivers of the state’s economy, have been hit particularly hard. The information sector, home to tech giants like Google, Apple, Intuit, and Facebook, has experienced a 16 percent decline in jobs, while the financial sector has lost 8 percent of its workforce.
Meanwhile, the health care and social-service industries, which are largely funded by the government, have seen a gain of 240,000 jobs. However, as principal fiscal and policy analyst Chas Alamo points out, these industries are heavily dependent on government spending, blurring the line between public and private-sector jobs. In total, the private sector has 12.5 million jobs, while the public and publicly supported sectors have a combined total of 5.5 million jobs.
This stark contrast in job growth raises important questions for the future of California’s economy. With a current unemployment rate of 5.2 percent, the highest in the nation, it is clear that the state’s reliance on revenue from personal income taxes is not sustainable. As Brooke Armour, president of The California Center for Jobs and the Economy, points out, the state is losing high-wage, middle-class jobs and replacing them with low-wage hospitality and service jobs. This not only affects individuals’ financial stability but also has a significant impact on the state’s budget.