A new report published this week is ringing alarm bells about the state of California’s economy despite proclamations from Gov. Gavin Newsom this month that the state’s GDP reached a record $4.25 trillion last year.
According to the Pacific Research Institute, the average California household has about 35 percent less disposable income than the national average.
“California may look wealthy on paper, but it does not feel that way for many families,” said political strategist Jon Fleischman.
Housing prices remain a huge burden on families, the report said, where they may pay more than double the national average in annual payments to finance a median-priced home.
The other two factors, the report said, are energy costs and taxes.
The average utility bill in California, for instance, was $686 per month compared to a national average of $610 per month. Lower-income families may actually have higher energy bills compared to wealthy homes near the coast. Businesses may actually spend twice as much for electricity than in other states, further raising costs of everyday goods.
Meanwhile, while the median California income is 20% larger than the national average, taxes reduce that advantage to only 17%.
Belying the wonderful GDP figures is the poor job market in California, the report warned. Since the COVID-19 pandemic, California’s share of the national economy is trending downward, from 14.5% to 13.8%.
The job growth rate of non-farm jobs in California is less than half of the rest of the nation’s, according to the report, since 2020. Private sector job growth in the state also significantly lags the country. The number of private sector jobs outside of health care outright declined.
The Golden State still dominates when it comes to technology and artificial intelligence, but even the tech sector is showing warning signs that the state isn’t as dominant as before. In 2024, the number of tech jobs in California fell by 3.4 percent – the largest decline in the U.S.
The culprit, the report argues, is the state’s policymaking. Lawmakers need to fix the high tax burden and cost of doing business
“California has been economically uncompetitive for many years, and the consequences are becoming too large to ignore as the outflows of businesses and families are now evident in the state’s economic data,” the report said.
Disclaimer : This story is auto aggregated by a computer programme and has not been created or edited by DOWNTHENEWS. Publisher: nypost.com
