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LA fires clobber California economy after recession | Opinion

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LA fires clobber California economy after recession | Opinion

Three days after immensely destructive and deadly wildfires broke out in and around Los Angeles, Gov. Gavin Newsom proposed a $322.3 billion state budget with a positive revenue forecast “based on an assumption of continued but slowing economic growth.”

The new 2025-26 budget is already outdated because the fires, which are still growing, will have a heavy impact on both the income and outgo sides of the budget, by reducing economic activity in Southern California and increasing pressure for fire suppression and recovery aid from Sacramento.

The fires struck as California’s economy was still recovering from the brief but sharp recession that hit the state five years ago when Newsom ordered shutdowns to battle the COVID-19 pandemic. About 3 million workers were idled, and recovery has been mediocre at best. California’s unemployment rate, 5.4% in November, the latest month for which data are available, was the second highest of any state, with more than a million unemployed workers.

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A broader federal Bureau of Labor Statistics measure of unemployment or underemployment provides an even dimmer picture. The U-6 rate, as it’s dubbed, counts “total unemployed, plus all marginally attached workers, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all marginally attached workers.”

(Marginally attached workers are people who aren’t working or looking for work but who want a job and have looked for one in the last 12 months.)

California’s current U-6 rate is 10%, by far the highest of any state and more than twice the national rate. It’s even higher — 11.8% — in Los Angeles.

Beacon Economics, in an analysis of the latest data, says that employment growth in California has trailed the nation in recent years: “Since February 2020 (the start of the pandemic), total nonfarm employment in the state has grown 2.5% compared to a 4.6% increase nationally.”

“There are a mix of influences both driving and constraining the state’s job growth,” Justin Niakamal, Beacon’s research manager, commented. “On one hand, California is seeing comparatively high incomes, strong consumer demand, and high economic output, but our critical lack of housing supply has led to the state’s well-known labor force contraction, and that is most certainly holding back job growth.”

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The wildfires are obviously one uncertain factor in how California’s economy fares over the next few years — but not the only one.

Newsom’s budget, without mentioning him by name, cites Donald Trump’s recapture of the White House as “the most immediate risk to the forecast,” listing Trump’s vows to impose tariffs on imported goods and deport undocumented immigrants.

“California would also be especially vulnerable to tariffs as the ports of Los Angeles, Long Beach, and Oakland and the logistics industry that is concentrated in the Inland Empire are highly dependent on foreign trade,” the budget declares, adding, “To the extent that existing workers are deported and potential new workers banned or discouraged from immigrating, many sectors of the U.S. and California economies could face labor shortages, leading to price increases in the goods and services produced by these sectors.”

However, even if the fires had not occurred and Trump not been elected, the state would still face a declining labor force, as a new report from the Public Policy Institute of California notes.

“In the last two decades, the share of the population participating in the labor force has fallen five percentage points (from 67% to 62% today) due to the aging of California’s population,” PPIC analyst Sarah Bohn writes. “As the population continues to age and the state faces a shrinking workforce, preparing Californians who can and want to work will become more essential.

“California’s current economic realities reflect the volatile macroeconomic conditions we’ve weathered since the pandemic as well as long-term challenges that have been brewing for decades,” she continues.

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California gubernatorial candidates weigh in on juvenile justice during Bay Area event

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California gubernatorial candidates weigh in on juvenile justice during Bay Area event


Juvenile justice was one of the hot topics discussed Friday as six candidates for California governor gathered in the South Bay.

During the meeting of the California State Association of Counties, most gubernatorial candidates agreed that the current way of approaching juvenile crime might need a revisit.

The discussion came on the heels of a shooting at Valley Fair mall in the South Bay. Investigators claim the suspected gunman, a 17-year-old who was already on probation for a gun crime, opened fire on a perceived gang rival in the crowded mall on Black Friday. The crime and the teen suspect have since fueled an ongoing debate over California laws regarding teen offenders.

Here’s some of what three of the gubernational candidates had to say on the matter.

Steve Hilton: “On crime, we gotta challenge the ideology that has been pushed for so long: criminal justice reform, decarceration, not holding people accountable. That’s the disaster.”

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Xavier Becerra: “We absolutely have to revisit anything that allows kids to be killed by kids.”

Katie Porter: “I think one of the lessons that the data probably shows about juvenile justice is when you allow the problem to continue, the interventions then don’t work.”

Both Becerra and Porter also noted that while they believe reform is needed, they don’t believe an “incarcerate them all” attitude is the answer.

NBC Bay Area was unable to speak about the issue with the other three candidates who attended the event.



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Key California laws taking effect in 2026

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Key California laws taking effect in 2026


A raft of new legislation is set to take effect for Californians in 2026 after Governor Gavin Newsom signed hundreds of bills over the past year.

The new legislation affects a wide range of issues, such as reducing drug costs, increasing the minimum wage and possibly barring police officers and federal agents from wearing face masks.

Why It Matters

Many of the measures reflect the state’s ongoing push to address affordability, equity and transparency—often amid tension with President Donald Trump’s White House.

The changes directly affect millions of residents, employers, landlords, students and consumers in the nation’s most populous state, serving as a bellwether for legislative trends nationwide.

What To Know

Here is a breakdown of some of the key laws set to go into effect in California in 2026:

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  1. Minimum wage increase

The minimum wage is set to increase across the state from $16.50 to $16.90 per hour for all employees.

Several local municipalities are also increasing their minimum wages further, as they are allowed to set wages higher than the state minimum.

  1. Reduction to drug costs

From January 1, Senate Bill 40 would require large state-regulated health insurers to cap insulin co-pays at $35 for a 30-day supply. The same requirement takes effect for smaller plans in 2027.

Californians would also have access to low-cost, state-branded CalRx insulin, priced at $55 for five pens.

  1. Gender-neutral restrooms in schools

Starting July 1, every California public school must provide at least one gender-neutral restroom, as mandated by SB 760.

  1. Police identification and mask ban

From January 1, local and federal law enforcement officers would generally be barred from wearing masks to conceal their identities and must display visible identification when performing enforcement duties.

These measures, codified in SB 627 and SB 805, are facing legal challenges from federal entities.

Tricia McLaughlin, a Department of Homeland Security spokesperson, said the department would not comply with the law.

  1. Ban on cat declawing

Declawing cats for nonmedical reasons is set to be prohibited statewide. The practice is widely condemned as inhumane by animal welfare advocates.

  1. Combating auto scams

Consumers who buy or lease a new or used car from a dealer would have the right to return it for a full refund within three days of purchase. California is set to become the first state in the nation to offer the protection.

  1. Single-use plastic bag ban

From January 1, major changes to the state’s plastics policy go into effect, banning all plastic carryout bags—even thicker varieties previously permitted. Stores would only be allowed to distribute recycled paper bags, subject to a minimum charge.

  1. AI transparency and protections

AI operators must clearly disclose when chatbots are not real people, and companies must implement safeguards to prevent chatbots from encouraging self-harm in minors.

Additional AI regulations are set to increase transparency, ban chatbots from impersonating health care professionals and require new police reporting on AI use.

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  1. Required appliances in rentals

Landlords would be legally required to provide working refrigerators and stoves in rental apartments from January 1.

  1. Extended window for sexual assault lawsuits

A new law, AB 250, creates a two-year window—from January 1, 2026, to December 31, 2027—for adult survivors of sexual assaults to file lawsuits alleging a cover-up. It would allow these individuals to file cases even if the usual statute of limitations lapsed.

What People Are Saying

California Governor Gavin Newsom said in October regarding the legislation on drug costs: “I am pleased to sign SB 41, a bill that will lower health care costs for all Californians. This bill, together with related efforts in the 2025 budget and CalRx, represents the most aggressive effort in the country to lower prescription drug costs. California continues to lead the way in lowering costs, increasing transparency, and ensuring that the savings are passed on to payers and consumers.”

He wrote in a letter in September regarding the ban on officers wearing masks: “Acting on behalf of an authoritarian President, federal immigration authorities are spreading fear and terror throughout California with indiscriminate raids that have rounded up American citizens, people legally in the United States, working parents, and even children.

“America should never be a country where masked ‘secret police’ grab people off the streets and throw them into unmarked vans and speed away. It is unacceptable that government agents, guns in hand, have seized our neighbors while wearing masks under the pretense of protecting themselves when they are, in fact, hiding from public accountability and sowing fear to intimidate the American people.

“For the safety of both the public and law enforcement, Californians must know they are interacting with legitimate law enforcement officers, rather than masked vigilantes.”

Attorney General Pam Bondi said in November in response to the measure: “Law enforcement officers risk their lives every day to keep Americans safe, and they do not deserve to be doxed or harassed simply for carrying out their duties. California’s anti-law enforcement policies discriminate against the federal government and are designed to create risk for our agents. These laws cannot stand.”

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Trump admin making good on promise to send more water to California farms

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Trump admin making good on promise to send more water to California farms


The Trump administration is making good on a promise to send more water to California farmers in the state’s crop-rich Central Valley.

The US Bureau of Reclamation on Thursday announced a new plan for operating the Central Valley Project, a vast system of pumps, dams and canals that direct water southward from the state’s wetter north.

It follows an executive order President Donald Trump signed in January calling for more water to flow to farmers, arguing the state was wasting the precious resource in the name of protecting endangered fish species.

The Trump administration has sent more water to California farmers across the Central Valley. AP

Secretary of the Interior Doug Burgum said the plan will help the federal government “strengthen California’s water resilience.”

It takes effect Friday.

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But California officials and environmental groups blasted the move, saying sending significantly more water to farmlands could threaten water delivery to the rest of the state and would harm salmon and other fish.

Most of the state’s water is in the north, but most of its people are in the south.

The federally-managed Central Valley Project works in tandem with the state-managed State Water Project, which sends water to cities that supply 27 million Californians.

The systems transport water through the Sacramento-San Joaquin River Delta, an estuary that provides critical habitat to fish and wildlife including salmon and the delta smelt.

It is important for the two systems to work together, Karla Nemeth, director of the California Department of Water Resources, said in a statement.

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The action comes after an executive order President Trump signed in January, which states that more water is to flow to farmers across the state. AFP via Getty Images

She warned the Trump administration’s plan could limit the state’s ability to send water to cities and farmers.

That is because the state could be required to devote more water to species protection if the federal project sends more to farms.

Barbara Barrigan-Parrilla, executive director at Restore the Delta, said pumping more water out would result in more Delta smelt and juvenile salmon dying from getting stuck in the pumping system, and once the temperature warms, harmful algae blooms will develop that are dangerous to fish, wildlife, pets and people.

That could have economic impacts, she said.

“When you destroy water quality and divorce it from land, you are also destroying property values,” she said. “Nobody wants to live near a fetid, polluted backwater swamp.”

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The Trump admin argued the state was wasting water in the name of protecting endangered fish species. AP

The Bureau of Reclamation denied the changes would harm the environment or endangered species.

The Central Valley Project primarily sends water to farms, with a much smaller amount going to cities and industrial use. Water from the Central Valley Project irrigates roughly one-third of all California agriculture, according to the Bureau of Reclamation.

The Westlands Water District, one of the largest uses of Central Valley Project water, cheered the decision.

It “will help ensure that our growers have the water they need to support local communities and the nation’s food supply, while also protecting California’s wildlife,” Allison Febbo, general manager, said in a statement.

During Trump’s first term, he allowed more water to be directed to the Central Valley, a move Democratic Gov. Gavin Newsom fought in court, saying it would push endangered delta smelt, chinook salmon and steelhead trout populations to extinction.

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The Biden administration changed course, adopting its own water plan in 2024 that environmental groups said was a modest improvement. Newsom didn’t immediately comment Thursday on the new decision.

The Republican president renewed his criticism of the state’s water policies after the Los Angeles-area fires broke out in January and some fire hydrants ran dry.

The Central Valley Project does not supply water to Los Angeles.

Trump dubbed his January executive order “Putting People over Fish: Stopping Radical Environmentalism to Provide Water to Southern California.”



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