07/25/2024

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Full October 2023 Jobs Report

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The Center for Jobs and the Economy has released our full analysis of the October Employment Report from the California Employment Development Department. For additional information and data about the California economy visit www.centerforjobs.org/ca.

Highlights for policy makers:

Key Takeaways

  • As a result of twice extending the 2022 tax filing date for most of California, the state’s revenue picture remains unclear. Daily tracking by the State Controller, however, indicates that the crucial personal income tax revenues are coming in below budget projections.
  • In general, most overall economic indicators are tracking close to the projections underlying the current budget bill. The more economic-sensitive sales and use taxes are slightly above projections through the end of October. Total personal income is only 0.6% lower than expectations in the most recent data from the second quarter. Employment, however, has fallen in the past four months.
  • The totals, however, are less relevant as the budget’s health has become heavily dependent on only a portion of the taxpaying base, both by income and geographically. In the latest data from 2021, only 8,519 taxpayers paid a quarter of all personal income tax. Over 40% of personal income tax paid by state residents comes from the Bay Area, making the state budget highly vulnerable to fluctuations in this region’s economy, particularly the tech industry.
  • Persistent high unemployment claims contribute to a substantial federal unemployment fund debt that is projected to worsen, with California’s program covering a significantly larger labor force compared to other states.

Unemployment Claims Rise in Line with Seasonal Pattern but Remain Well Above National Averages

The rise in initial claims (4-week moving average) moved closer to the pattern seen during the same period in 2022. While claims are up, they reflect seasonal patterns rather than any cyclical indication.

Insured unemployment—a proxy for continuing claims—remains strongly elevated over the 2022 numbers. These numbers again reflect the outcome of state policies advancing benefit payments rather than earned income opportunities.

The California program also continues to cover a substantially higher portion of the labor force than in other states. In the latest results (4-week moving averages), California produced 20.8% of all initial claims and 22.6% of insured unemployment. In contrast, California contains only 11.6% of all nonfarm jobs.

California’s federal unemployment fund debt again accounted for 73% of all monies owed by the states, rising to $19.1 billion as of November 16. The total debt remains on track to match EDD’s most recent fund forecasts which anticipate further deterioration in the fund’s conditions even in the absence of another economic downturn. Fund debt is expected to reach $19.7 billion by the end of 2023 and $20.3 billion by the end of 2024. With the exception of New York, all other states that fell into debt during the pandemic have paid off the balance and in many cases restored their state funds to pre-pandemic levels as well, applying federal pandemic funds specifically allowed for this purpose.

Califormer Businesses

Additional CaliFormer companies identified since our last monthly report are shown below. The listed companies include those that have announced: (1) moving their headquarters or full operations out of state, (2) moving business units out of state (generally back office operations where the employees do not have to be in a more costly California location to do their jobs), (3) California companies that expanded out of state rather than locate those facilities here, and (4) companies turning to permanent telework options, leaving it to their employees to decide where to work and live. The list is not exhaustive but is drawn from a monthly search of sources in key cities.

Companies From To Reason Link Date
Advantage Solutions Irvine Missouri HQ move

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2023
Boeing Long Beach various Relocation of some C-17 operations

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2023
Joby Aviation Santa Cruz Ohio $500 million manufacturing facility

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2023
Oak View Groups Los Angeles Colorado HQ move

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2023
Professional's Choice El Cajon Oklahoma HQ move

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2023