On usually the first Friday of every month, the Bureau of Labor Statistics (BLS) releases its estimate of net job creation (or destruction) for the nation as a whole. The figures in the report are perhaps the most influential economic indicators in the world, including estimates on wage growth, unemployment, labor force, and industry job creation.
A couple of weeks after the national report is released, the BLS releases state level estimates.
Here’s what job creation through the first eight months of 2015 look like by state.
Job Creation by State in 2015 So Far
On top of the job creation geography are businesses headquartered in California. Through the first eight months of 2015, net new jobs created is a little over 324K. In second place is Florida at about 154K. Rounding out the top five are New York at 93K, Washington at 66K, and Michigan at 63K.
On the other end of the job creation picture are states where businesses have been shedding jobs. This group includes West Virginia (down 21K), North Dakota (down 10K), Oklahoma (down 7K), Kansas (down 6K), and Alaska (down 5K).
Why Is California on Top?
With such a high tax burden, a goofy regulatory environment, and a drought, how can California be on top?
Four reasons probably explain the results. Unsurprisingly, the answer is probably more of “in spite of” rather than “because of” the deterrents to economic growth just mentioned.
First, California has the largest employment base, so job growth of 324K isn’t all that much. Here’s a look at employment base by state. If one converted the absolute job growth figures to a percentage basis, job growth in California wouldn’t look so great.
Second, the figures provide relatively little reliability on what the growth is in terms of part-time and full-time. With the onset of Obamacare and the high cost of labor in California, a large chuck of the employment growth is part-time.
Third, when looking at the figures by industry, employment in retail and leisure & hospitality dominates, which are low-paying industries.
With these three as the background, it’s still relatively amazing that job growth in California continues to be number one with the internationalization of labor and the mobility of businesses.
What’s the real cause? The best possible explanation is the red hot private equity/venture capital/Silicon Valley conditions. The world’s labor supply has keen interest in the Bay area, and this has far flung dynamic effects on other industries in California.
Conclusion
Overall, job creation in California continues to lead the nation, with total net new jobs through the first eight months of 2015 at a little over 324K. The 324K net new jobs is well ahead of second place Florida at about 154K.
Although lots of factors influence job creation, perhaps the largest driver of California’s job growth is the red hot venture capital/private equity/Silicon Valley connection, driving lots of investment and human capital to the drought-stricken state.
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