Data undercut Newsom’s ‘roaring back’ claim

Virtually any utterance from Gavin Newsom’s mouth these days, as well as those from his press office and other outposts of his administration, contains the phrase “roaring back.”

When, for example, the Legislature passed a state budget to meet the June 15 constitutional deadline, Newsom issued a statement declaring that “California’s economy is coming roaring back.”

Not surprisingly, it’s also the key slogan in his resistance to a campaign to recall him, something voters will decide later this year.

“Gov. Gavin Newsom has California roaring back,” the announcer in one of his campaign spots declares. “Newsom is delivering money to your pocket. Plus an extra $500 bucks for families with kids — $4 billion straight to small businesses through the nation’s largest grant program — cleaning up our streets and getting 65,000 homeless Californians into housing — and free pre-K for every California child, regardless of income.”

To some, it might appear somewhat unseemly that Newsom so obviously merges his official actions — and taxpayers’ money — with his political campaign, but the once-discernible line between politics and policy vanished long ago.

That said, do the facts support Newsom’s repetitive “roaring back” claim?

To be sure, some Californians have prospered in the 15 months since Newsom declared a public health emergency due to COVID-19 and imposed restrictions on personal and economic activities.

Those who could continue to work at home maintained their incomes and those on the top rungs of the economic ladder were enriched as the values of their investments such as stocks expanded, thanks largely to the Federal Reserve’s cheap money policies.

Newsom has a multi-billion-dollar revenue surplus mostly due to taxes on the affluent, money he’s now spending on the wide array of new benefits he’s touting in his campaign ads.

However, broader economic data offer scant support for the “roaring back” mantra the governor is chanting these days. It’s more like creeping back — slowly.

The state’s monthly report on employment, issued on June 18, frames the glacial pace of improvement. The state lost nearly 3 million jobs after Newsom ordered widespread business closures in March 2020, and since then we’ve recovered roughly half of them. Our 7.9% unemployment rate is still twice what it was before the shutdown and is the third highest of any state, slightly under Hawaii and New Mexico.

In addition to the official unemployment rate, the federal Bureau of Labor Statistics makes other calculations, including an important one on underemployment, called U-6, which includes not only workers without jobs but those who are only marginally attached to the labor force and those working part-time.

California’s U-6 rate through the first quarter, 18.4%, was four percentage points above the national figure and the third highest of any state, behind Hawaii and Nevada. Even more disturbingly, the U-6 rate in Los Angeles County, 24.1%, is higher than that of any state.

The federal Bureau of Economic Analysis reported this month that during the first quarter of this year, California’s economic output increased by 6.3%, slightly lower than the national rate and in the lowest third of the states.

The federal bureau also reported that California’s personal income grew by 42.8% during the first quarter, which sounds impressive until one looks at the nation as a whole and learns that California’s growth was the second lowest of any state. The bureau notes that nationwide, “transfer payments” — mostly federal aid programs rather than earned income — accounted for virtually all of personal income growth.

California’s economy is recovering, to be sure. But “roaring back?” Hardly.