{"id":34869,"date":"2025-11-02T18:17:09","date_gmt":"2025-11-02T18:17:09","guid":{"rendered":"https:\/\/www.newsbeep.com\/us-ca\/34869\/"},"modified":"2025-11-02T18:17:09","modified_gmt":"2025-11-02T18:17:09","slug":"newsom-cites-california-as-economic-model-but-the-reality-is-mixed","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/us-ca\/34869\/","title":{"rendered":"Newsom cites California as economic model, but the reality is mixed"},"content":{"rendered":"

\"Apple<\/a>Apple headquarters in Cupertino. (File photo courtesy of the company)<\/p>\n

This column\u00a0was originally published by CalMatters.\u00a0Sign up<\/a>\u00a0for their newsletters.<\/p>\n

As Gov. Gavin Newsom ramps up what appears to be a 2028 White House bid, a mainstay of his pitch during television interviews and social media appearances is California\u2019s economy.<\/p>\n

\"Opinion<\/a><\/p>\n

As Newsom tells it, the state\u2019s $4-trillion-plus annual economic output is not only the fourth largest in the world, were it a nation, but it\u2019s a model of entrepreneurial vigor and programs advancing equity.<\/p>\n

Were it only true.<\/p>\n

A year ago, the Legislature\u2019s budget analyst, Gabe Petek, indirectly blew the whistle on Newsom\u2019s braggadocio.<\/p>\n

\u201cCalifornia\u2019s economy has been in an extended slowdown for the better part of two years, characterized by a soft labor market and weak consumer spending,\u201d Petek wrote while\u00a0outlining the state\u2019s deficit-ridden budget dilemma.<\/a><\/p>\n

\u201cWhile this slowdown has been gradual and the severity milder than a recession, a look at recent economic data paints a picture of a sluggish economy. Outside of government and health care, the state has added no jobs in a year and a half.\u201d<\/p>\n

Nothing has changed since then. Employment has been stuck at virtually the same level for a couple of years. At 5.5%, California\u2019s unemployment rate is the\u00a0highest of any state<\/a>, with more than a million workers lacking jobs.<\/p>\n

Meanwhile, the state has been overspending its revenues,\u00a0creating what budget experts call a \u201cstructural deficit,<\/a>\u201d meaning spending programs locked into law are greater than the reliable income to fund them.<\/p>\n

California really can\u2019t afford those compassionate services Newsom boasts about creating. He and the Legislature, amid great fanfare, extended state-paid medical care to undocumented immigrants,\u00a0only to be forced to roll it back<\/a>\u00a0after costs turned out to be double their estimate.<\/p>\n

It should be noted that what Petek saw a year ago, and remains fundamentally true today, pre-dates Donald Trump\u2019s becoming president, so blaming him, which\u00a0Newsom attempted earlier this year,<\/a>\u00a0is groundless.<\/p>\n

One of the most troubling aspects of California\u2019s wheel-spinning economy is the turmoil in two revered sectors, high technology in the San Francisco Bay Area and Southern California\u2019s movie and television production industry.<\/p>\n

Silicon Valley has been shedding jobs for the past several years as it shifts emphasis to artificial intelligence. This weeks\u2019 announcement that\u00a0Amazon is cutting 14,000 jobs<\/a>\u00a0\u2014 and may eventually double that number as it focuses on AI \u2014 was a jolt.<\/p>\n

Not all of those cuts are in California, of course, but the online seller has been heavily involved in California, operating multiple warehouses.<\/p>\n

\u00a0\u201cWe expect to continue hiring in key strategic areas while also finding additional places we can remove layers, increase ownership, and realize efficiency gains,\u201d Beth Galetti, Amazon\u2019s senior vice president of people experience, said in a memo to employees.<\/p>\n

Meanwhile, the Paramount production conglomerate, a mainstay of the Southern California entertainment industry for decades, also announced payroll cuts as new owners took over.<\/p>\n

Paramount on Wednesday began\u00a0cutting about 1,000 employees<\/a>, the initial cohort of what could be much deeper cuts. David Ellison, Paramount\u2019s new boss, said the reduction is aimed at \u201cbuilding a strong foundation for the future.\u201d<\/p>\n

The layoffs hit not only Paramount\u2019s movie production, but also staff at its CBS television subsidiary, MTV and Comedy Central. The Los Angeles Times reported that another 1,000 jobs are expected to be cut later, bringing the total reduction to about 10% of Paramount\u2019s workforce.<\/p>\n

Movie and TV production in Southern California has been declining for years as companies have coped with high costs and been lured to other states or nations with lower costs and subsidies. Another iconic movie company,\u00a0Warner Bros. Discovery, is currently for sale<\/a>.<\/p>\n

Despite California\u2019s budget woes, Newsom and the Legislature increased state tax credits \u2014 in effect, cash subsidies \u2014 for in-state TV and movie productions to\u00a0$750 million this year<\/a>. But the hemorrhage has continued.<\/p>\n

CalMatters<\/a>\u00a0is a nonpartisan and nonprofit news organization bringing Californians stories that probe, explain and explore solutions to quality of life issues while holding our leaders accountable.<\/p>\n

Want to submit a letter to the editor, guest column or\u00a0opinion\u00a0piece? Find our guidelines and submission form\u00a0here<\/a>.<\/p>\n

READ NEXT<\/p>\n","protected":false},"excerpt":{"rendered":"Apple headquarters in Cupertino. (File photo courtesy of the company) This column\u00a0was originally published by CalMatters.\u00a0Sign up\u00a0for their…\n","protected":false},"author":2,"featured_media":34870,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[28],"tags":[6752,24906,24907,457,74,76,75,24908,13895],"class_list":["post-34869","post","type-post","status-publish","format-standard","has-post-thumbnail","category-san-diego","tag-calmatters","tag-deficit","tag-econonmy","tag-gavin-newsom","tag-san-diego","tag-san-diego-headlines","tag-san-diego-news","tag-slowdown","tag-unemployment"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/posts\/34869","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/comments?post=34869"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/posts\/34869\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/media\/34870"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/media?parent=34869"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/categories?post=34869"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/tags?post=34869"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}