SACRAMENTO—California’s post-pandemic job creation rate has dropped to the fourth-highest in the nation amid troubling new data that raises red flags over California’s economy and the state’s ability to retain and grow well-paying private-sector jobs.

“On its surface, California’s post-pandemic jobs recovery looks impressive. However, a closer look at the data is raising alarm bells for the business community,” said Rob Lapsley, president of the California Business Roundtable, a nonpartisan business advocacy association that closely tracks key economic trends through its sister organization, the Center for Jobs and the Economy.

According to new data released by the Center:

• California’s job growth has been dominated by government and government-dependent jobs in Healthcare & Social Assistance;
• In-Home & Supportive Services (IHSS)—was responsible for about two-thirds of total net jobs growth in Healthcare & Social during the economic recovery period;
• Compared to pre-pandemic conditions, employment still was 132,400 short of recovery. California was one of only five states still short of recovery in the revised data;
• Compared to pre-pandemic conditions, California fell behind much smaller North Carolina in the number of net new jobs created. It’s not just Texas and Florida; smaller states are beginning to do better than us;
• California saw zero net job growth in January 2025;
• California continues to have the second-highest unemployment rate in the nation and January was the 13^th consecutive month with more than one million Californians unemployed.

“California has not been growing well-paying or private-sector jobs. In a healthy economy, job growth leads to higher tax revenue. California is experiencing the opposite. We are using tax revenue to ‘buy’ jobs. This is dangerous and unsustainable and will only further destabilize are already shaky state budget. Without urgently addressing the barriers to private sector job creation, including the high cost-of-living and regulatory uncertainty, the next economic downturn will be doubly devastating for the growing number of Californians who rely on state tax revenue for their paychecks and economic security,” Lapsley concluded.

FROM THE REPORT:

“Trade related jobs in Transportation, Trade & Utilities have been the one bright spot in the state’s recovery progress, but as indicated in the Texas numbers, California’s lead in this area has been under increasing competition from other regions. In the other private industries, the recovery picture is one of contraction in California, including the two primary Tech Sectors (Information and Professional, Scientific & Technical Services).

“To put it more directly, other than in Trade, California has not grown jobs during the past 4 years of recovery; it has bought them with public funds. California has not expanded its tax base; it has used that tax base to cover its competitive weakness for private sector jobs. And the jobs California has bought are not the “good-paying” jobs promised in the state’s economic development goals, but are predominantly minimum wage, part-time, and limited term.”