California’s highest-skilled and best paying jobs have been steadily eroding, and are being replaced by government employment. While many government jobs provide competitive wages, they do not produce anywhere near the economic benefit and societal wealth that the very best private jobs provide.
The three best-paying, highest-skilled industries in California are the information, financial services and manufacturing sectors, which pay average annual salaries of $90,000, $69,000 and $64,000, respectively. Government jobs on average pay $55,000.
Since 1990, those three high-value industries have lost more than 400,000 jobs in California. During that same period, the government sector has more than filled the void, adding more than 450,000 jobs.
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Ratio of Well-Paid Private to Government Jobs
These high-value jobs have a multiplier effect (the number of additional jobs supported or created by the basic jobs) significantly greater than the government jobs. That is, a new manufacturing or information job will create more than 2.75 new jobs, whereas a new government job will create fewer than 1.75 new jobs, on average.
Unless California policy makers connect public policies – from education to regulation to taxation – with the types of jobs we hope to maintain in the state, then our economy will continue to underperform and the best opportunities for Californians will increasingly be out-of-state.