As Gavin Newsom makes his increasingly frequent appearances outside the state \u2014 seemingly preparing for a 2028 presidential campaign \u2014 one of his stock messages is that California\u2019s economy is soaring.<\/p>\n
\u201cWe dominate in every category,\u201d Newsom bragged during\u00a0a recent presentation<\/a>\u00a0to the Center for American Progress, a left-leaning think tank. \u201cWe are the center of the universe (and) America\u2019s coming attraction.\u201d<\/p>\n He cited the state\u2019s $4-trillion-plus economic output that, were it a nation, would rank fourth or fifth largest in the world, and mentioned the ranks of Nobel Prize winners and vigorous venture capital investment in the state.<\/p>\n Moreover, he boasted, California has used that economic vigor to finance an array of social programs and services, such as universal health care, proving, he said, that such largesse can co-exist with capitalistic gains.<\/p>\n Subliminally, Newsom was pitching the notion that electing him as president could bring California-like prosperity and generosity to the nation as a whole. However, since Newsom is using the economy as a major talking point, it would be fair to provide key facts he fails to mention.<\/p>\n Yes, California has world-class economic output, but it is due largely to a very narrow sector, Silicon Valley\u2019s high-tech industry, which has hugely benefited its entrepreneurs and capital investors.<\/p>\n However the\u00a0industry is undergoing a shakeout<\/a>\u00a0due to the artificial intelligence phenomenon and it\u2019s\u00a0shedding thousands of jobs<\/a>, thus concentrating wealth even more.<\/p>\n Meanwhile the state\u2019s other world-famous sector, Southern California\u2019s movie and TV industry, is hurting badly as\u00a0production migrates to other states and nations<\/a>\u00a0\u2014 so badly that\u00a0\u00a0in an effort to slow the hemorrhage.<\/p>\n Ever since the COVID-19 pandemic, California\u2019s unemployment rate has routinely ranked among\u00a0the nation\u2019s highest<\/a>, with\u00a0a million members of its labor force lacking jobs<\/a>.<\/p>\n Beacon Economics, a major consulting firm that closely charts California\u2019s economic situation\u00a0puts it this way:<\/a>\u00a0\u201cOn one hand, California\u2019s economy is in good health. While the official figures for the last quarter are still being tallied, the state\u2019s economic growth comfortably outpaced the national average of 2.5% in 2025, tracking toward an annual growth rate near 3%.<\/p>\n \u201cAt the same time, the job market is sagging. California now has the highest unemployment rate of all fifty states in the Union, stubbornly hovering at 5.5%, and its job market appears to be going in the wrong direction. The\u00a0total number of jobs in California actually shrank<\/a>\u00a0by 0.6% since the beginning of this year, making it the 17th worst-performing state in the nation in terms of job creation.\u201d<\/p>\n One result of these contradictory data is\u00a0one of the nation\u2019s highest levels of income disparity<\/a>, as a recent report from the Public Policy Institute of California points out. Only eight other states have wider gaps.<\/p>\n \u201cThe gap between top and bottom incomes in California has increased substantially (by 57%) since 1980, when families at the top earned seven times more than those at the bottom,\u201d the PPIC report says, reflecting 72% income growth for those in the top tenth in income but 19% growth for those in the bottom tenth.<\/p>\n The Census Bureau\u2019s calculation of poverty that includes the state\u2019s staggering living costs puts\u00a0California\u2019s rate at the highest, 17.7%, tied with Louisiana<\/a>. A similar calculation by PPIC and the Stanford Center on Poverty and Inequality puts it at 16.9%, while another 17.9% of the population is \u201cnear-poor.\u201d<\/p>\n