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Newsom's 'California Comeback' is a Mirage. Nebraska is Proof.
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By Dan Walters, CalMatters Commentary
Published 2 years ago on
December 5, 2021

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It’s time again for some fun with numbers.

When the federal Bureau of Labor Statistics released employment and unemployment numbers for October, they revealed a huge disparity.

Nationally, the unemployment rate had dropped to 4.6%, virtually identical to where it was before the COVID-19 pandemic eviscerated the economy 21 months ago. But state jobless rates ranged from a low of 1.9% in Nebraska to 7.3% in California and Nevada.

Dan Walters

Opinion

Nebraska’s unemployment rate was not only the nation’s lowest in October but the lowest rate recorded by any state since the Bureau of Labor Statistics started tracking job numbers in 1976.

“Nebraska has struggled with a chronic worker shortage since even before the pandemic, and it has driven up wages and made it difficult for employers to hire and expand,” the Associated Press reported. “Earlier this month, the Nebraska Chamber of Commerce and Industry released a survey of its members where 92% said finding skilled workers was a top priority.”

“We have a lot of manufacturers across the state that are finding it difficult to expand their operations” in the face of rising consumer demand, Bryan Slone, the chamber’s president, told the AP.

Comparing Nebraska to California

Unemployment rates were even lower in Nebraska’s two largest metropolitan areas — 1.7% in Omaha and 1.3% in Lincoln.

Let’s put that in context vis-à-vis the California economy. In October, 19 million Californians, just under half of the state’s population, were counted in the labor force and 17.6 million were employed, while 1.4 million were jobless. That resulted in the 7.3% unemployment rate, nearly twice as high as it was before pandemic struck.

While Nebraska’s major urban areas are thriving, California’s largest — the Los Angeles-Long-Beach-Anaheim region — has the highest jobless rate of the nation’s major metro areas.

If California had Nebraska’s 1.9% unemployment rate, 1.1 million more Californians would be working, supporting their families, enhancing the state’s economic production, and paying taxes.

Even if California were to get back to the 3.9% unemployment rate it had before the pandemic, it would mean about 650,000 more Californians would have jobs. Were California to match the national rate of 4.6%, a half-million more would be working.

Let’s look at the October job numbers in an even larger context, that of political orientation.

Most Low Unemployment States Voted for Trump

Eight of the 10 states with the lowest unemployment rates in October, including Nebraska, voted Republican in the 2020 presidential contest between Donald Trump and Joe Biden. The only exceptions were Vermont and New Hampshire.

Conversely, nine of the 10 of the states with the highest jobless rates, including California and Nevada, voted Democratic. The only exception was Alaska.

It could just be coincidence, of course, but maybe those red states with low unemployment rates have regulatory and tax policies that encourage job-creating investment and maybe California and the other blue states with high jobless rates are perceived as being hostile to business. Certainly they tend to be states with relatively high tax burdens — not only California, but New York, New Jersey and Connecticut.

If nothing else, this exercise in numerology is a reminder that California, for all its Hollywood glitz and its Silicon Valley flash, is a state with a fundamental socioeconomic problem. We have way too many workers without jobs and way too many families living in or near poverty, unable to pay the high costs of housing, utilities, fuel and the other necessities of life.

Or to put it another way, the “California comeback” that Gov. Gavin Newsom often touts is way short of what it needs to be. The folks in Nebraska are enjoying the real comeback.

About the Author

Dan Walters has been a journalist for nearly 60 years, spending all but a few of them working for California newspapers. He now writes for CalMatters, a public interest journalism venture committed to explaining how California’s state Capitol works and why it matters.  For more columns by Dan Walters, go to calmatters.org/commentary.

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