Business
Column: The Hoover Institution says all recent California job growth has been in government jobs. That's completely wrong
Back when most sensible Californians were concerning themselves with Thanksgiving preparations, the California-bashing right wing went hog wild over a stunning report that almost all private job growth in the state collapsed from January 2022 to June 2024 and almost all growth — 96.5% — was in government jobs.
“California’s Businesses Stop Hiring,” was the headline on the report published by the conservative Hoover Institution. Its main claim was that from January 2022 to June 2024, private employers in the state added only 5,400 jobs.
You can imagine how California bashers, including some within the state, greeted the news that government was propping up the state’s economy.
“This is what a failing state looks like,” Rep. Kevin Kiley (R-Rocklin), who badly lost a bid to replace Gov. Gavin Newsom in the 2021 recall election, tweeted. Others who gleefully tweeted about the Hoover claim included Rep. Vince Fong (R-Bakersfield), and venture investor Steve Jurvetson. Right-wingers outside California also joined the choir.
The Hoover article was what we in the news biz often pigeonhole as “interesting, if true.”
But it’s not true.
The original article, by UCLA economics professor Lee Ohanian, a Hoover Institution senior fellow, asserted that California added only 156,000 nonfarm jobs in the January 2022-June 2024 period. Since government statistics also showed that government employment in the state rose by 150,500, that left (after rounding) only about 5,400 new jobs created outside the government sector.
The picture painted was one in which private employers are shutting down and only government hiring is keeping the California economy afloat. The opposite is true, however.
(The Hoover Institution has retracted the original article and removed it from its website. An archived version of the original can be found here.)
Here’s the main problem with the Hoover analysis: During the sample period, California actually added 672,300 nonfarm jobs, not 156,000. Consequently, the 150,500 new government jobs accounted for only about 22.4% of the total, not 96.5%. The accurate figures show that not only did California’s businesses not stop hiring, but continued to hire fairly robustly from January 2022 to June 2024.
How did this calculation go so awry? The answer is simple. Ohanian conflated the two separate monthly employment surveys issued by the Bureau of Labor Statistics: One is its so-called household survey, which asks a national sample of about 60,000 households how many people in the household are employed. The other is its establishment or “payroll” survey, which asks about 629,000 workplaces how many people they employ.
Generally, the household survey yields a higher number of employed persons than the establishment survey. That’s because it counts the self-employed (including gig workers) and farmworkers, among others who are excluded from the payroll statistics. But that relationship breaks down when you’re counting only payroll workers, slicing and dicing the statistics into industry sectors.
Mixing together the BLS household data and the BLS establishment data is “a cardinal sin of BLS data analysis,” observes the pseudonymous economics commentator Invictus on The Big Picture blog of Ritholtz Wealth Management, in an indispensable deconstruction of Ohanian’s original post.
In that post, Ohanian subtracted the government jobs figure reported in the establishment survey from the nonfarm employment figure in the household survey. That effectively overstated the government jobs percentage of California employment growth. The proper approach, Invictus notes, would have been to use the establishment survey for both measures.
Ohanian acknowledged in an email that he had erroneously considered the household and establishment figures similar enough to treat them as effectively equivalent. “If I had seen the differences in the two series,” he says, “I would have written the piece differently. Mea culpa.”
In a corrective article posted Tuesday on the Hoover website, Ohanian makes public his mea culpa but also reiterates a point he made in the original article, which is that California’s job growth is weakening. That’s echoed by other studies, including a recent warning from the state’s Legislative Analyst’s Office.
Yet there’s much more to be said about Ohanian’s original article, as well as the glee with which conservatives seized on its headline claim as the basis for largely groundless attacks on California’s economic policies. First, it’s proper to note that the original piece was published Aug. 7, which is why its analysis covers only the period that ended in June.
The government issues two distinct sets of employment statistics — the payroll or establishment survey (in orange) and the household survey (in red). It also adjusts the household survey to confirm more with the payroll survey. The adjusted figure is in blue. The two major surveys measure different things and shouldn’t be mixed.
(Bureau of Labor Statistics)
Why it got resurrected and shot around the right-wing echo chamber last week is a mystery. Ohanian himself seemed uncertain when I asked him about it. Kiley, Fong and Jurvetson haven’t responded to my requests for comment.
That brings us to the statistics themselves. Employment data bristle with pitfalls for the unwary, even among experienced economists such as Ohanian. Indeed, in April, Ohanian posted an analysis on the Hoover website that purported to show a loss of 10,000 fast-food jobs in California from September 2023, when Newsom signed a minimum wage increase for that sector, through January this year — even before the increase went into effect.
As I reported, Ohanian based his post on a Wall Street Journal article that used employment figures that weren’t seasonally adjusted. That’s a crucial error when tracking jobs in seasonal industries such as restaurants.
The Journal’s article, and consequently Ohanian’s, mistook a seasonal decline in restaurant employment that occurs from September to January every single year for the one-time consequences of the minimum wage increase. Fast-food jobs, seasonally adjusted, actually rose by 6,300 in the period being reported. Ohanian told me at the time that he had been unaware that the Journal used nonseasonally adjusted figures.
BLS employment figures may be especially confusing because the bureau’s two surveys superficially seem to measure the same thing, but are very different — so much so that the bureau itself has issued a detailed explainer about the distinction. It notes that the establishment survey is “a highly reliable gauge of monthly change in nonfarm payroll employment.” The household survey is oriented more toward demographics and is best known as the source of the national unemployment rate.
Ohanian used his misconstruction of employment figures as the basis for a wide-ranging critique of California economic policy, mostly citing how the high cost of living drives people out of the state.
“Part of California’s job weakness,” he wrote, “reflects the number of people and businesses leaving the state.” California’s population fell by about 75,000 from 2022 and 2023 (the latest data available), he wrote, adding that companies such as Tesla, Oracle, and Chevron have moved or are moving their headquarters elsewhere.
“Population loss naturally leads to job loss,” Ohanian told me by email. “It is challenging to see how California could be gaining jobs as portrayed in the Establishment Survey, given a smaller population.”
That may well be true over the longer term and with larger numbers. But the 75,000 departed residents in 2022-23 represent less than two hundredths of a percent of the state’s population. Even the larger population decline of about 538,000 since 2020 represents about 1.4% of the state’s population.
The key question would be: Who’s leaving? Many emigrants may be retirees, who don’t have occupational reasons to stay in the high-cost state and may have sizable equity in their homes to pocket for a move to a cheaper location; about 7.5 million of California’s residents today are older than 65. The pandemic also drove the population down — COVID-related deaths numbered at least 60,000 in 2020 and 2021.
As for the emigration of corporate headquarters, California still leads the nation in headquarters of Fortune 500 companies, with 57. New York and Texas were runners up with 52 each. California remains a national leader in business creation, with nearly 560,000 new business applications filed with the state in 2023. When new technologies emerge with the potential to aid economic expansion, they tend to start in California.
One other subtext of the debate over California job growth needs to be mentioned. That’s the picture that conservatives paint about government jobs. The tweeted hand-wringings about the purported explosion in government jobs, which implies that the government workers are an army of faceless bureaucrats engaged in writing anti-business regulations.
The idea that the Musk/Ramaswamy Department of Government Efficiency can cashier them without affecting your daily life is a fantasy. In fact, the federal government employs only about 3 million workers, about half of whom are in the military, the Department of Veterans Affairs, and the Department of Homeland Security; the overall figure has remained fairly stable since the 1960s.
An additional 20 million are state and local employees, the majority of whom are teachers, along with police and fire fighters. Which of these workers should we fire?
Any discussion of California’s economy limited to periods of a year or two needs to be viewed in relation to the big picture, which is that California’s economy is by far the biggest in the country — indeed, it would rank in the top five or six countries if it were a sovereign state. At an estimated $4.08 trillion in gross domestic product, its economy is more than half again as large as the runner-up among U.S. states, Texas ($2.7 trillion).
Ohanian is right to argue that there’s reason for concern about where the state goes from here. But to suggest that there’s something fundamentally faulty about policies that still undergird the most powerful state economy in the nation or that California is a “failing state” — that’s “interesting, if true” … but, again, not true.
Residents of Monterey Park voted overwhelmingly to ban data centers on election day, making the San Gabriel Valley city the first in the nation to do so by public vote.
As of Wednesday, 86% of votes were in favor of Measure NDC, the city ban, according to the Los Angeles County registrar-recorder/county clerk.
Other cities and towns have passed moratoriums on data centers, as a wave of opposition sweeps the country. But the Monterey Park vote can only be overturned by another ballot measure, making it the most permanent data center ban in a jurisdiction.
Monterey Park’s City Council had already banned data centers by ordinance, after a proposed 247,000-square-foot data center met an outpouring of public anger and concern. The developer withdrew that plan.
That facility would have been less than 500 feet away from the nearest home, and would have used three times the electricity of the entire 60,000-person city. Residents said it would have caused noise and air pollution and driven up electricity rates.
“This ensures long-lasting protections for current and future generations,” Amy Wong, co-founder of the group San Gabriel Valley Progressive Action, said of the vote. “It means that future city councils cannot overturn a data center ban, even if data center developers wanted to spend money to fund pro-data center candidates.”
The measure had no formal opposition. The developer of the proposed facility, investment firm HMC StratCap, said it wouldn’t engage in the ballot fight when it withdrew in March.
The Data Center Coalition, an industry trade group, expressed disappointment in the vote.
“It sends a signal that the area is closed for business, both for data centers and for other significant economic development projects,” state policy director Khara Boender said.
“It deprives local residents of the opportunity to compete for jobs and investment, while also causing the area to relinquish substantial long-term economic investment, high-wage jobs, and critical tax revenue to neighboring areas or other states.”
SGV Progressive Action worked with hyperlocal groups including No Data Center Monterey Park to rally support for the measure.
The group is now focused on stopping data center proposals in the City of Industry and fighting a move by City of Industry, Santa Fe Springs, Vernon and City of Commerce to welcome data centers and other industry with fast-tracked permitting and tax incentives.
City of Industry, in the San Gabriel Valley, and Vernon, south of downtown L.A., are primarily industrial areas, each with around 300 permanent residents. They are employment centers, and tens of thousands of workers commute in daily.
There has been little vocal opposition to data centers among the few residents of these cities. Wong said the protest is primarily coming from the surrounding neighborhoods.
“If a data center gets built in City of Industry, residents across the region would bear the brunt of pollution and increased utility costs,” Wong said, noting that it is surrounded by 16 other cities and unincorporated communities.
Data center proposals have been limited in California compared to Virginia, Texas, Georgia, Illinois and Arizona, which sit at the center of a recent boom in hyperscaler facilities to power artificial intelligence.
California has the third-most data centers in the country, with 300, but high electricity rates, expensive land and regulatory hurdles mean that fewer, and smaller, facilities are currently planned than in other hotspots.
That doesn’t mean opposition hasn’t been fierce. In Coachella and Imperial County, residents are showing up in droves to protest local proposals.
In the San Gabriel Valley, Montebello, El Monte and Baldwin Park have all enacted temporary moratoriums, and Alhambra recently banned data centers as part of a zoning code update.
Wong said she hoped the ballot measure vote would galvanize the opposition. “The vote is a testament to the people power of our region,” she said. “Our region is worth protecting, and we won’t let data centers determine our future.”
A rule intended to prevent rent gouging in the wake of the Eaton and Palisades fires has lapsed in Los Angeles County, possibly exposing some renters to hikes.
The executive order that blocked rent increases was issued by Gov. Gavin Newsom amid the devastating wildfires last year. Under the order, landlords couldn’t increase rents by more than 10% above their prefire levels.
The rule, which was supposed to be temporary and was repeatedly extended, ended Friday after a vote to extend it again failed to garner enough votes. Supervisor Lindsey Horvath, whose district includes Pacific Palisades, sounded the alarm in a motion to extend price protections that failed to pass at the Board of Supervisors’ May 19 meeting.
“These price gouging protections continue to be necessary as construction and rebuilding continue, and as thousands of people remain displaced,” the motion said. “Families which signed short-term leases could face drastic price increases of 50% or more without further price gouging protection.”
Los Angeles County is home to more than 1 million rental properties, though not all of them needed protection from the new rule. There are already stricter rent increase caps for many residences, depending on the location, type and age of the building. Despite the rent control in the region, the people of Los Angeles pay among the highest rents in the country.
It is uncertain whether renters will face rapidly rising rents now that the protection has lapsed. But some real estate experts and policymakers said there was no need for the temporary rule that was part of the governor’s state of emergency.
Supervisors Kathryn Barger, Janice Hahn and Holly Mitchell abstained from voting on the motion to extend the protection, while Supervisors Hilda Solis and Horvath supported it.
“I abstained because I did not see sufficient evidence to justify extending this emergency ordinance, nor did I see evidence to eliminate it entirely,” Hahn said.
Barger’s office said she supported allowing the protections to sunset while waiting to see whether new information emerged.
“Market data already shows countywide rents are only about 2% above pre-emergency levels and rental inventory has grown,” Barger representative Helen E. Chavez Garcia said. “The Supervisor is also mindful of the burden these ongoing protections place on small property owners throughout the county.”
Mitchell did not immediately respond to a request for comment.
There haven’t been steep rent hikes in neighborhoods within three miles of the Palisades fire, according to a Times analysis of data from Zillow, the property listing company.
In ZIP Codes within three miles of the Palisades fire, rent increased 4.8% from December 2024 to April 2025. In areas around the Eaton fire, which destroyed swaths of Altadena, rent jumped 5.2% in the same period.
In L.A. County, ZIP Codes farther from the fires saw only about a 2% increase.
A landlords representative, Jesus Rojas of the Apartment Owners Assn. of Greater Los Angeles, told the supervisors during public comment at the meeting that the county’s rent-gouging rules have “long outlived the emergency they were intended to address” and are now being “wrongfully used to harm thousands of rental housing providers throughout the county.”
“There is no proof that multifamily rental housing providers are hugely increasing rents for impacted homeowners,” Rojas said.
Indeed, there are strong signs that the property market in the Los Angeles area has at last begun to cool.
L.A. metro-area rent prices recently fell to a four-year low, with the median rent slipping to $2,167 in December.
Meanwhile, condominium sales had their slowest start of the year in decades. Condo sales in Los Angeles have plummeted to a 20-year low, with fewer than 2,000 units sold in January and February — the worst start to the year since 2005.
Newsom defended the price-gouging protections shortly after they went into effect.
“In the days following the Los Angeles firestorms, we worked quickly to protect Los Angeles survivors from any form of exploitation,” he said in February 2025. “The state has the tools in place to not only block price gouging during this emergency, but also to prosecute bad actors.”
The Los Angeles County Department of Consumer and Business Affairs said it received more than 2,000 complaints after the fires, alleging that retailers and landlords were taking advantage of people put in hardship by their losses, and sent out more than 2,000 cease-and-desist letters to businesses and landlords for alleged price gouging, said Morine Merritt, who oversees department investigations into consumer and real estate fraud.
“Close to 90% of the complaints that we received involved allegations of rent increases,” Merritt said in an interview. Now that the fire-related protections have expired, existing laws and “regular market conditions determine price increases for goods and services, including rents,” she said.
Crackdowns on fire-related rent gouging have been rare, said Chelsea Kirk of the activist organization the Rent Brigade, which analyzed L.A. County’s rental market in the year after the fires. It reported 18,360 potential examples of price gouging in listings but said that few lawsuits had been filed by authorities so far.
Last week, Rent Brigade announced what it said was the first private civil lawsuit brought by a family that claimed to be rent-gouged in the aftermath of the wildfires. Plaintiffs Randall and Candy Renick, whose Altadena home was damaged, said they were charged nearly three times the maximum permitted rate for nearly 10 months. They seek restitution of $96,000 plus civil penalties and attorneys’ fees.
The rental market has probably stabilized since the fires, Kirk said, but other families may still be “locked into illegal rents” that they agreed to pay when they were in a rush to find housing after they were displaced.
Dear Mr. Pelley:
I meant what I said in my letter last week to the 60 Minutes team: joining 60 Minutes is the honor of my career and I am grateful to be working alongside the people who have contributed to the most important television journalism brand this country has ever produced. While I’m new to 60 Minutes, I’ve devoted my career to investigative journalism and storytelling. I started this job excited to collaborate and to benefit from the wisdom and experience of the 60 Minutes veterans, with you among them. For that reason, one of the first things I did in my new role was call you to talk and invite you to dinner. It is a profound disappointment that you rejected that overture and chose ambush instead. Yesterday, you hijacked my first meeting with staff to disparage me, my qualifications, and my intentions with remarkable incivility and contempt. I welcome a diversity of viewpoints and respectful debate among the team, but this was nothing of the sort. Yesterday’s performative display of hostility enacted in front of the staff instead of in a civil, private conversation-demonstrated that you have no interest in contributing to the future success of the show, or approaching my new tenure with a mind open to collaboration and progress. I am here to deliver first-in-class news programming, not to make headlines about newsroom drama. I am eager to work alongside those who share this goal.
Despite yesterday’s misconduct, I had hoped that in sitting down with you today we could find a path forward together. You made clear that you are not interested in such a path.
Your antipathy to the future of the show has come through loud and clear. And I have heard you. I therefore write on behalf of CBS News, Inc. (“CBS”) to inform you that your employment with CBS is terminated for cause effective immediately. Enclosed is your formal termination letter.
Sincerely,
Nick Bilton
Executive Producer, 60 Minutes
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