Where is the nation’s lowest job growth? Look no further than rural California

Amid a population slowdown and housing crisis, California can add another distinction to its list of woes: lackluster job growth.

From September 2022 to September 2023, the number of employed people grew just 0.15%, the lowest figure of any state, according to a Times analysis of data from the Bureau of Labor Statistics.

The data also show that within the state, rural counties, especially those in the Central Valley, have endured some of the highest unemployment rates.

Imperial and Colusa counties, among the state’s smallest counties by population at about 20,000 residents each, were most dramatically affected, each with unemployment rates near 15% in that 12-month period.

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Preliminary data from Feb. 2024 paint an even darker picture, with Colusa County’s unemployment rate above 20% and Imperial County’s more than 17%, according to the state Employment Development Department.

The EDD data put 10 of the state’s 58 counties above 10% unemployment. All 10 are rural counties with a comparatively high proportion of farm jobs.

In California, agricultural employment is highest in the summer and lowest in the winter, though the gap has shrunk in recent decades, according to a study by U.C. Davis.

The weak job growth statewide was caused in part by tech layoffs, which swept through the information sector, as well as contractions in finance, insurance and transportation, according to experts. Though cities have seen jobless rates rise, rural counties have far higher unemployment rates.

Even with a strong national economy, the numbers show a “divergence of California with respect to the national trends,” said Julien Lafortune, a research fellow at the Public Policy Institute of California.

Those states with the most robust growth — familiar job-creating rivals including Nevada, Texas and Florida — saw growth rates more than 10 times higher than California’s.

In raw numbers, the Golden State is not only the most populous state but also employs the most workers of any in the nation. California added more jobs from September 2022 to September 2023 than around half of of the other states: nearly 28,000. But California was still outmatched by Texas and Florida, which added the most jobs in that time span, with 342,000 and 239,000, respectively.

In January, California’s unemployment rate was second highest in the nation at 5.2%, barely trailing Nevada at 5.3%,
BLS data show. It had risen from 4.5% a year prior.

The data suggest that although the state’s big cities grab headlines for mass layoffs and population loss, it is actually rural California that struggles most with unemployment.

In December 2022, the California counties with the highest rates of unemployment were all rural, and largely located in the Central Valley. Imperial, Colusa, Tulare, Merced and Plumas counties ranged from 7.5% to 15.2% unemployment.

As a housing crisis causes people to relocate farther from city centers and build more housing in suburbs and exurbs, farther-flung counties are seeing more demand for housing, which makes it less affordable. The data suggest that employment opportunities may not be coming with increased population.

Tennessee, Massachusetts, Louisiana and Hawaii were the next four states with the lowest rates of job growth; each of those states had rates of growth two to four times higher than that of the Golden State.

On the other end of the spectrum, Alaska led the nation with 3.1% growth in that period, followed by Nevada, Texas, South Carolina and Florida, each of which reported job growth of more than 2.5%.

The country as a whole recorded 1.5% growth in the number of employed people during the period, according to BLS data.

One possible bright spot for California: weekly average wages were up 0.8% from September 2022 to September 2023, the 12th-highest increase of any state.

Nationally, weekly average wages were flat over the same period, while consumer prices rose 3.7%, according to the BLS.

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Job growth is booming across the U.S. but not in California. Here’s why

Nationally, the U.S. had another strong month of job growth in February, but California has trailed the nation and its unemployment rate is substantially higher.

March 9, 2024

Although other states could count on population growth to fuel their economies, California lost people in 2023 for the third consecutive year, a trend that experts attribute to high housing costs, crime and the ability to work remotely since the onset of the pandemic.

However, the population loss was slowing last year and experts say the state could soon get back on track.

The weak employment numbers were a sign that “things are maybe slowing up in the economy,” and “not everyone’s doing as well as they were” in recent years, Lafortune said.

At the state level, “what we want is more economic activity,” Lafortune said, with an associated increase in incomes for workers driving demand for goods and services.

Jobs numbers may follow suit this year: BLS data from early 2024 suggest a strengthening of the state’s job numbers, though the figures are provisional.