California unemployment rises to 5.5%, worst in the U.S. as tech falters
304 comments
·August 15, 2025tqi
disillusioned
I agree with all of this, coupled with a decent amount of layoffs from the Mag7s, though I'm not sure how distributed those were in California, necessarily.
rubidium
Biotech is facing a huge downturn right now too.
Fade_Dance
That's a poster child of a casualty of ZIRP. Hard to imagine an industry any longer duration and hungry for cheap risk.
I'm not sure about the thesis that this is primarily fallout from free money and suppressed interest rates though. That was really a '22 story, and even with long and variable lags, that element has been in play for a while now.
Oversupply of talent definitely sounds like a good argument though. I'll posit there has been some disruption by recent developments in the industry. Also, while metaverse and crypto startups may be passe, the AI scene has disgusting amounts of hype and money, and crypto ain't dead either, which brings me back to the earlier point that I do think some disruption is there to fill the gap in the narrative.
daxfohl
And old unicorns like airbnb and uber now having to compete with traditional hotels and taxis again.
I think Elon's takeover of twitter set something of a precedent too: if he could reduce headcount as much as he did and still have a functioning product, then why can't I?
BTW I also don't think it has much to do with that engineering tax deferral code change that people keep talking about. My cynical hunch is that that topic keeps getting seeded by the billionaires who have the most to gain by reversing it, and hey maybe they'll hire an extra engineer or two afterward just to be good sports, but it's not going to reverse any major employment trends.
IX-103
My anecdata - the large tech company I work for has practically stopped hiring. I went from conducting interviews practically every week in the first quarter to none at all on the post 3 months. Even during the layoffs on 2022 they were still hiring for some positions, so I conducted around 1-2 interviews a month.
akmarinov
Same in mine - started off as 800, had a salary freeze for a year, had a hiring freeze for now 2 years and after layoffs and people leaving we’re now at 480
wavemode
I'm literally one of the last software engineers my company (in the Bay area) ever hired. I've been here for 2 years and only 1 engineer joined since then, meanwhile dozens left.
mrtksn
What if this turns into rust belt but for software? Once high paying jobs gone with AI, politicians trying to please grumpy software developers promising them to open a software shop and create jobs. Mostly college drop-outs, voting for a certain party that promises to take on AI :)
Half kidding of course, but AFAIK many industries went through such a transformation and today most social and political issues stem from those areas that once were affluent lost their industries. Why not the software too?
b3ing
We are giving India the IT market, just like China got manufacturing.
mertleee
It's precisely this. Trump is allowing one of the last vestiges of the American middle class to be outsourced to India. Just like Clinton allowed the same to happen with factory jobs to China.
As a person of color this is even more detestable.
platevoltage
At least we will be able to get jobs putting plastic forks in boxes now. Maybe we will be able to use those green GitHub tiles to negotiate better pay.
ipnon
As a person of grayscale the contrast is undeniable.
null
MangoCoffee
"No More Offshore. Startups Look to Spend and Hire in U.S. Due to Trump Tax Change."
https://www.wsj.com/tech/tech-startups-hiring-us-workers-30f...
I don't understand how Trump is allowing anything with headline like this.
fuzzfactor
Actually it was Nixon who single-handedly pushed manufacturing to China, and Reagan who pushed harder.
Clinton just didn't do anything serious which could reverse this, and other Republican actions are what "allowed" further Chinese growth rates than that.
IOW almost anybody who had any influence was allowing prosperity to recede from our shores more so than Clinton.
not my downvote btw
rayiner
How is this Trump’s fault?
moi2388
And as a white person it’s even more detestable still.
Since skin color somehow matters /s
ahmeneeroe-v2
Worse because we're giving it to India in the US.
aurareturn
I've been saying this on HN since 2022:
For all the pro-WFH/fully remote developers on HN who live in North America, you're going to be in for a surprise when your company decides to replace you with someone living in another country. Why hire you when the company can hire someone who costs 1/5 of you and is willing to work harder without complaining? Both of you are remote anyway. So what if the new hire works at night and sleeps during the day?
For all pro-WFH/fully remote developers living in North America, you should be cheering for return to office mandates. It'll probably save your career long-term.
dmonitor
The rust belt can't really fall back on tourism like California can. Worst case scenario all software jobs evaporate and it becomes Florida with better weather
al_borland
I’m over in the rust belt and all I hear about California these days is it’s full of homeless people and crime that goes unchecked. It’s not looking as appealing as a vacation destination as it did 20 years ago. Maybe this perception doesn’t match the reality you see living there, but when it comes to attracting tourists, perception is everything.
justonceokay
Unlike Florida, a state known for its orderly and mannered citizens. I think CA will be fine
mertd
It's really hard to reply without making a statement on politics but you really should diversify your news consumption.
platevoltage
I'll take "lawless" California over seeing the same Rankin cop watching a stop sign at the entrance to Braddock in order to write "rolling stop" tickets every 15 minutes. I also like that I don't have to worry about a police chief holding me at gunpoint because the fire alarm happened to go off while I was alone in a warehouse space that I was renting.
I'm going to guess that the people who think the entire state looks like LA in 1992 probably weren't going to vacation here in the first place.
dangus
LA has a highly diverse economy, it’s really only the Bay Area that has diversification issues.
The rust belt actually does quite well with tourism, though my research for responding to your comment seems to indicate to me that tourism is important everywhere.
aworks
Back in the 90s, it was the opposite as miliary/aerospace declined in SoCal.
I'm a native Michigander and long-time Californian (both subject to booms/busts) who recently took a road trip to the Midwest and back. If it weren't for family and friends, I probably wouldn't venture east of the 100th parallel. I was surprised by this.
heavyset_go
There are plenty of dying places in the desert and on the beach tourists can visit, it's just the "dying places" part that makes them aversive to tourism.
giantg2
Everywhere has a boom-bust cycle. The question is just on what timeline. It typically takes decades to happen. When is anyone's guess.
oceansky
Not always. Some industries just never come back. Where is the oil lamp or camera film industry now?
platevoltage
The lamp industry didn't go anywhere. The Camera industry didn't go anywhere. Might as well be saying, where has the CRT monitor or Macromedia Flash industry now?
fiddlerwoaroof
I think defining industries this narrowly isn’t helpful
Buttons840
> What if this turns into rust belt
We're rewriting the belt.
throw0101c
> Why not the software too?
Would it be any worse than the Dot-com bust?
exabrial
Literally no jobs are going away due to AI.
cjohnson318
I've lost consulting work because I'm a lot more expensive than $20 a month. I've literally had clients say, "yeah, I would have called you, but I was able to figure out that bug with ChatGPT."
edoceo
Once the bugs stack up, they'll call you back and it will be lots of billable hours. At least, that was the case for me; only took a few weeks before the clients own inconsistent requirements bite them in the ass. Gotta have a business+tech expert to make many products. AI is neither; and many folks can't prompt for shit (and can't spec for shit; and can't test for shit).
hn_throwaway_99
This is easily, demonstrably false. The Washington Post ran an article over 2 years ago of specific, documented instances where people lost their jobs due to ChatGPT: https://www.washingtonpost.com/technology/2023/06/02/ai-taki...
pj_mukh
As per your article:
“But Mollick said it’s too early to gauge how disruptive AI will be to the workforce. ”
I’d like a follow up article when I’m guessing a good chunk of these writers were hired back when their managers realized ChatGPT can’t help replace real creative writing output. It can only create more dead internet spaces that don’t make money long term.
There will always be bad managers making shitty decisions and journalists and CEO's eager to confirm a narrative, AI or no-AI
Source: Building an AI production studio myself and the first thing we had to do was hire writers to drive the creative effort.
rapsey
Looking at things in the micro scale and expecting it to translate directly into a macro scale is stupidity.
mrtksn
Sure, in total probably there will be even more and better jobs. Just like with the auto industry or the other industries that turned from producing stuff into designing stuff and telling to Chinese to produce it like this.
mat_b
That's not the whole picture. There are less positions available where you tell someone else what to do and more competition for those positions.
rayiner
Define “jobs.” A lot of the “jobs” created by offshoring production involved being service workers for the 25% of knowledge workers who benefit from offshoring.
victorbjorklund
Of course there will be. There will be instances where a company has 4 people working in a role but with AI 2 people can do the same job and they can therefore let 2 people go. (and then there will be other places where even more jobs are created because of AI).
_rm
This is just an admission you don't know where work comes from. Like you think there's a fixed size of pie of work.
If the company has a legal monopoly that prevents competition, sure. Otherwise, unless they're dumb and want to risk the other two leaving, they'll task all 4 of them to use the AI to accomplish things that were infeasible or uneconomical before, to try win market share or increase margins.
nothercastle
Art jobs got destroyed everything else AI was just a excuse
platevoltage
The word “literally” is doing a LOT of work here.
speakfreely
"Jobs going away due to AI" really tracks two different outcomes:
- The type of job is eliminated due to AI
- The amount of people doing a type of job is substantially reduced because AI increases the productivity of people in that role and companies can do the same amount of that work with less people
I think the former is extremely limited so far, but the latter is pretty substantial. I didn't downvote you, but I imagine the people that did probably did so to reject the former argument.
nothercastle
The most common one is simply we wanted to cut heads and used ai as an excuse. Also AI spend is probably a huge drag on a lot of companies that are getting nothing off value but burning a lot
krapp
AI has already replaced thousands of jobs. Plenty of stories about that appear on HN. Plenty of anecdotes from people who have lost work or clients to AI. People here have stated their intention to fire their entire workforce and replace them with AI as soon as possible. AI companies have put up billboards saying "stop hiring humans." A single Google search would disabuse you of this notion.
I don't understand being this willfully naive, especially if you support AI, because using it to replace jobs is the entire selling point. No company wants AI for any other reason, and every company wants AI.
Herring
What’s with the comments here? Forget the official reports, we should ask a couple randos on HN about their inboxes?
kristopolous
After reading the article it looks like the attribution is defensible:
"In contrast, professional and business services were down 7,100 jobs in July, the worst of any sector, and the tech-heavy information sector lost 1,000 jobs."
This could be many things. People could be leaving to do their own startups. The BLS counts that as a job loss thus high-velocity sectors can be reported as job loss.
Cyclone_
People leaving to do their own startups would be a pretty small portion of the job market, even on the SF Bay area.
kristopolous
right, upon further research, there's no corresponding increase in LLC or EIN filings so the startup hypothesis is likely unsupported
tootie
BLS includes a household survey. It's not just based on payrolls. They aim to capture as much as possible about people with informal work or self-employment.
littlexsparkee
Provided folks give some context about their location, experience, search, etc the input can be helpful - averages are great but aren't super instructive about one's own odds.
Plus BLS household survey probably has some non-response bias from it re: high income, low time individuals, precisely the folks chiming in.
null
nadermx
We're littreally reading stories upvoted in importance by a bunch of randos. What else do you expect?
readthenotes1
Well, you survey 4400/13500000, the rando inbox is adding quite a bit to the sample size
softwaredoug
Are we sure its just tech? Isn't the entertainment industry going through a rough time right now as well?
JLO64
I have a Teamster friend here in LA, and according to him practically nothing is being filmed in this area. The major studios are opting to film either out of state (Georgia) or in Canada.
leeroihe
Over 50% of h1b visas issued in tech went to indian h1b's - no it's not an issue that's equivalent in the entertainment industry.
jmspring
Time to start holding businesses accountable for pushing the cheaper labor option. Many of those on visas are biased toward those from their own cultural heritage as well.
lokrian
Those businesses own all the social media, all the search engines, all the apps people discuss things on, and all the politicians.
rayiner
> Many of those on visas are biased toward those from their own cultural heritage as well.
It’s not even “bias.” It’s an odd form of white supremacy that views whites as above having material interests of their own. “It’s okay to be unfair to white people because they don’t need it like we do.”
I make the clarification because I’ve noticed it even among people who don’t have in-group bias. My mom quite dislikes other Bangladeshis, but only slowly realized over 30 years of living here that there are white-majority parts of the country with real economic challenges.
lisbbb
I just noticed tonight that the movie theaters in my city closed up July 27--there's already weeds growing up out front. This was a really depressing epiphany because the mall next door is basically dead, too. I feel like 2020 killed this place but it's been a delayed reaction, same as my tech career. All we have now here in the upper midwest are people wandering around wearing outfits more suited to the desert conditions of Africa and I guess they don't go to the movies, so...
throwmeaway222
anecdata: after lay off 10 months ago, I suddenly got 3 offers in July and I am employed now.
I think it's the BBB that fixed the tax code issue - just a guess.
Terr_
With respect to chronology and cause/effect, I'd point out that provision took effect in January 2022, so it's been of-concern for a while.
It was put into law in 2017 with the Republican TCJA, but section 174 was time-delayed, part of a general trick of having all of the tax-cuts and spending immediately, with any budget "balancing" items deferred as long as possible.
jvanderbot
I and a few thousand of my colleagues were laid off that day.
echelon
> With respect to chronology and cause/effect, I'd point out that provision took effect in January 2022,
That's when the layoff spree started!
ivewonyoung
Why didn't the Democrats who were in power repeal it by Jan 2022 by itself or as part of other large bills they passed?
Terr_
Among other possible attempts(?) that touched on the issue, here's one in 2024 that Republicans blocked in the Senate, where they "filibustered" it by voting "nay" on cloture.
https://www.govtrack.us/congress/votes/118-2024/s230
> Why didn't the Democrats
Alternate question: Why didn't the Republicans do something in the years before 2025 to fix the problem they created and which tech-company lobbyists absolutely told them about?
devonbleak
It wouldn't have been budget-neutral without a bunch of tax increases along with it which they don't have the spine to implement.
trenchpilgrim
Because it was intended to offset losses in tax revenue from the 2017 tax cuts, and trying to undo those tax cuts would have been political suicide.
gedy
Crimethink
MisterBiggs
I was laid off this year and also saw a massive uptick in offers in July. Based in Colorado, but was looking nation wide and I got more interest out of SF than the rest of the country combined.
petcat
Sounds like you're one of the lucky ones. In my experience, remote tech jobs have largely moved to India. It's like pulling teeth at my company to get them to offer a remote job in a NA timezone (US or Canada).
bitbasher
anecdata: I run a saas product and my primary customers are recruiters, after the BBB I have had more daily signups and new subscribers than previous months.
seangrogg
Partially! The text of the OBBBA actually made permanent the section of the tax code that treats software development as research and amortizes accordingly. However, because nothing can just be straightforward, it also allows domestic research expenses to be deducted immediately instead of amortized.
Definitely a much better tax situation but also not one we would've been in if not for the TCJA, and we still have an exposed oblique (the removal of the domestic research exclusion) that could put us back in the same spot unless the software development as research section is removed.
littlexsparkee
less recruiter activity than a few months ago, cleared one interview gauntlet just to have the role change due to a new lead hire, otherwise getting followups for screens but hit or miss on the tech assessments. might have to spend more time practicing. 10 yoe, SFBA.
throwmeaway222
sorry to hear that, keep it up, it was absolutely demoralizing for me during those 10 months I started to believe I was actually losing my mind after a literal 20 year history in startups/tech.
But my colleagues are all younger than me - they are hiring people out of college too, so you can make it just keep pushing
silisili
I'm not looking for work, but have a LinkedIn that I honestly forgot about until the end of July. It'd been so long since I got even recruiterspam I forgot about it. And out of nowhere, 2 or 3 target recruiter messages.
Hopefully things are looking up for the market.
650REDHAIR
That’s quite the leap there.
But not a surprise based on your history here on HN.
dyauspitr
This might be the only good thing in all of BBB
bravesoul2
Good... for tech workers, and tech companies.
w10-1
The topic deserves a lot better explanation.
It's not helpful to just talk about absolute numbers of jobs gained or lost in a sector without talking about percentages and historical variability.
It also appears the California number cited is based on a survey of ~4K people, some reporting they can't find work, while e.g., Federal unemployment is a function of people getting unemployment benefits. Do states do the same surveys with the same methodology, so the numbers are comparable? Likely not. So the term seems to be used in different senses, and "worst in the US" is unsupported.
Further, for tech in particular, it's not clear which jobs were converted to contracts, for AI services or outsourcing (in or out of US).
This kind of salad article is likely the future: enough for the general public worried about jobs, but not helpful to anyone who actually wants to understand and plan accordingly.
jmalicki
None of the above purported facts are true.
From the link: Employment and Unemployment in California (Based on a monthly federal survey of 4,400 California households which focuses on workers in the economy)
This is federal not state data.
Federal unemployment data is based on this said survey. This link explicitly debunks that myth: https://www.bls.gov/cps/cps_htgm.htm
bushbaba
Unemployment in California was higher back in 2015. Feels like this is layoff related
ipnon
It's more concentrated in the middle class now. There are this year lots of underemployment opportunities for the lower class, and with MediCal and other welfare you can make ends meet. I have worked in both economies.
declan_roberts
This is the time to cut back on h1b permits.
wnc3141
I suspect this will become a key issue in Newsom's brand of center-left Democratic politics. It greatly affects both urban and college educated workforces - i.e the Democratic base. Canada took the lead here a few years ago under Trudeau's administration.
bsder
Or, better yet, simply prevent any company who laid people off from being able to access any more H1-Bs for some number of years.
You can keep your current H1-Bs, but no more for you for 5 years if you do a layoff.
hshdhdhj4444
There are already limitations on hiring H1Bs after layoffs.
ahmeneeroe-v2
Not sure how that is better. Remove current H1Bs prior to any layoffs of US nationals.
Jcampuzano2
Both should be implemented.
If you are laying workers off you clearly don't need additional H1B workers. You should be barred for at least a year if not more from putting in any applications for H1B after any major layoff.
It should also be scrutinized if you preferably fire local workers over your H1B workers. Anybody caught doing so should be barred from H1B for a decade.
I like my H1B coworkers, but things have gone too far. You can't do layoffs and simultaneously put in applications for thousands of H1B workers. It makes no logical sense and should be illegal. The system is completely broken right now.
Not to mention most of this H1B work is not actually due to lack of local talent. Building a web or mobile app is not rocket science and there are plenty of people capable of doing so. Any company putting in H1B for anything but research positions or positions requiring exceptional expertise is probably abusing the system.
jfengel
Good on the rust belt states for being able to get their unemployment down under 5.5%.
heavyset_go
Might be a case of those who are permanently out of the workforce because they couldn't find work are not counted in unemployment statistics, along with flight and deaths of despair.
giantg2
I wonder if the participation rate is lower or people moved away.
hshdhdhj4444
It’s helpful when the government is subsidizing your entire economy.
Farming, healthcare, autos, etc are almost completely subsidized by the government.
stockresearcher
Careful. Coronado, Miramar, Camp Pendleton, Twentynine Palms, Edwards, Mcclellan, Vandenburg, Travis, etc. How many bases do you think there are in Iowa?
mertleee
There's a reason most people you run into SF are either here on O1 or h1b visas these days...
Time to cull the waterloo crowd and maybe think twice about cheap outsourcing to latam and india.
akavi
As an American citizen, born and bred, I would literally, physically fight you on behalf of keeping Waterloo grads in America.
Many of the best coworkers I've had the pleasure of working with, not to mention the founders of the company I spent over a quarter of my career at (Pagerduty).
nickm12
hear hear! I've worked with exceptional people from all sorts of backgrounds, but pound for pound, Waterloo CS grads are significantly better on average than grads from any other CS program. They start off way ahead, but also maintain that edge throughout their careers.
Disclosure: I'm a US citizen with multiple CS degree from MIT and my son is studying CS at Waterloo now.
jdefr89
Nice. I an researcher at MIT LL. In order to work at the lab you need to be a US citizen since a lot of it is federally funded. I tried to get my buddy, a Waterloo grad currently at Google, an interview but he is Canadian...
Husieandr
[flagged]
philosophty
[flagged]
akavi
A zero-sum mindset on a website dedicated to programming of all places? Where we literally create wealth out of nothing but coffee and the strength of our minds?
My love for my country means I want it to be the greatest in the world. Waterloo grads make America better. Period.
didibus
The flip side should also be said, Canada and many other countries have talent drained by the US since they can't compete on pay.
It's hard to say, but who knows what could have been if the top Canadians had have to start or join Canadian companies and didn't have the option to take a higher pay in the US.
faluzure
I like the way you think. As a Canadian, I’m disgusted that we educate our youth and then send them to the US to take jobs from Americans and pay taxes to the Americans. We should be putting them to work in Canada instead so we can build companies and industries in Canada instead of America.
/s, but not really.
greesil
The American dream in silicon valley was built in part by these folks. They stay here and become Americans both culturally and legally and it's fantastic. Some of them even become Republicans.
As others have pointed out it's not a zero sum game since human capital begets growth.
estearum
The sudden explosion in zero-sum thinking in the right wing will be studied for generations
vachina
“Canadians”, touché.
HDThoreaun
Not only is this mindset disgusting, it is completely wrong. Labor is not zero sum, jobs create more jobs. Immigrants are what has made this country great, allowing immigration was critical to the US becoming the industrial/financial/tech capital of the world. Shutting down immigration will weaken our economy, it will cost americans jobs.
kanbara
there is no more american dream, and anyone who “creates” jobs in this economy and era of rampant hypercapitalism isn’t really enabling or transferring wealth.
if there were ample americans to do these jobs, they should be able to get them.
nationalism is a silly idea, anyway. and we should have free trade and movement with our biggest two allies. american exceptionalism is a joke
joshdavham
> Time to cull the waterloo crowd
Are implying that reducing the number of graduates from a single program (CS) at one specific university (Waterloo) from a country 10x smaller from the US (Canada) will help lower tech employment in California?
tstrimple
[flagged]
ahmeneeroe-v2
Why should US graduates compete with non-US workers in the US? Call me scared or incompetent or uncompetitive but I just don't want to compete in that way. All those people can stay in their countries and out-compete US grads there.
greesil
I'm sure there are other smart USians but shit there's a fuckload more globally and I get to work with them and it's great. And then if they stay long enough they become citizens.
My rule of thumb is if I'm the smartest person in the room then we've got serious problems.
justinhj
if it means I can hire Waterloo graduates again here in Canada that sounds fantastic
mertleee
I couldn't agree more! Canada has massive potential, albeit also large issues with their immigration system being gamed.
In my opinion, outsourcing is a larger evil. The money used to pay the salaries of outsourced engineers should be taxed at-least at 20% (along with remittances to India) akin to what we currently penalize foreign countries for maliciously suppressing the cost of physical goods. This is called Countervailing Duty or Anti Dumping Duty penalties.
I've reached my limit with the entitlement of these people in the united states. Especially systematically excluding americans or non-indians once they reach a hiring level / role.
trade2play
Indian software wages are about 1/3 US. The U.S. would need to tax them much more to dissuade outsourcing.
s5300
[dead]
pj_mukh
It's not most people you meet, its most people you remember you meet.
yodsanklai
Arguably, the purpose of a company is to generate profit. If US companies need skilled workers that they can't find locally, they will open or expand their international offices. At least the O1/H1B visa holders pay taxes in the US and contribute to the local economy.
hazek112
The United States is not an economic zone.
Non-resident visa holders are not citizens and act accordingly against the interests of citizens and their families.
ahmeneeroe-v2
Arguably the purpose of a country is the furtherance of its citizenry. The US system should be set up to disincentivize US companies from bringing scab labor into the US.
In practical terms this would look like eliminating H1B/O1 programs.
hshdhdhj4444
Corporations are just absolutely devastated at the fact that they cannot hire an H1B in California for $150k but will now have to hire the exact same person in India for $60k in one of the most remote friendly industries in the world.
ahmeneeroe-v2
If your sarcastic comment were true they'd be offshoring wholesale even with the existence of the H1B program.
dilyevsky
Take a guess where majority of google cloud hiring is these days
IMO it's far too early for "AI" to have had a meaningful effect on Software company hiring. A more plausible explanation for me is that between roughly 2012 and 2022, there was a tremendous increase in the supply of SWE talent (via undergraduate CS programs massively increasing enrollment, boot camps, immigration, etc), fueled primarily by ZIRP. On the demand side, ZIRPy VC funding primarily went to bullshit Crypto and (to a lesser extent) bullshit Metaverse companies, most of which have not panned out, meaning there is a dearth of late stage and newly public companies to hire said talent.