California Jobs: Government Booms While Private Sector Crawls

California’s September job growth saw government employment booming at an annualized rate of over 12 percent — and the private sector crawling at less than 2 percent.

The Beacon Economics and University of California Riverside School of Business Center for Economic Forecasting and Development employment survey for September estimated that California added 52,000 jobs for the month. Although that sounds like strong 3.4 percent annualized job growth, government positions spiked by 27,000, which the private sector only hobbled along with a 25,700-job gain.

California’s strong September performance helped the state’s year-over-year job growth move up to 1.7 percent, substantially outperforming job gains for the rest of America, which slipped to a growth rate of just 1.2 percent for the last 12 months.

Given the need for employment to grow each month to accommodate population increases, Beacon reported that the California unemployment rate was unchanged at 5.1 percent. Company’s Founding Christopher Thornberg commented that California’s growth rates are slowing due to a “lack of available labor” for skilled positions, despite California’s unemployment rate being almost a point higher than the national average.

Looking at the breakdown of the data, Beacon pointed out that the unusually large pop in government sector jobs in September was concentrated at the local level. Given an unusually large decline in local government payrolls since June, Beacon suggested the numbers indicate an increase in teacher retirements, with “more teachers leaving their positions in June and those positions being filled in September.”

The best analysis of the CalSTRS state Teachers’ Retirement System is by the California Center Public Policy Center, which studied millions of 2012 data files and found that average annual “full career” pension payments for teachers who had worked for 30-year terms was $51,500. Those who worked 43-year terms earned $73,817.

But CalSTRS’ retirees are also guaranteed at least 2 percent “pension protection” payments each year, plus supplemental payments to offset 85 percent of inflation. Most also receive lifetime medical insurance with no premiums and tiny co-pays. The average CalSTRS retiree in September 2017 with 30-years of service received an initial annual pension of about $57,139; and those with 43-years of service received about $81,900.

Beacon’s other September job observations were gains of 5,100 positions in Wholesale Trade; 46,000 in Transport, Warehouse, and Utilities; 3,300 in Retail Trade, 3,000 in Professional, Scientific, and Technical Services; 2,600 in Leisure and Hospitality; and 2,500 in Construction. Job losses included 6,400 in the Administrative Support sector, and 1,300 in Manufacturing.

Los Angeles, the Inland Empire and Orange County dominated growth during September, with combined job gains of 28,800. But Silicon Valley, which Breitbart News reported last month has seen job growth slowing since May, actually turned negative with combined losses of 5,600 jobs for the San Francisco Bay Area, the East Bay, and San Jose.