California economic outlook is looking gloomy. California’s once-booming economic engine is now flashing warning signs, according to the American Legislative Exchange Council’s latest “Rich States, Poor States” report. While the Golden State still ranks high in historical economic performance, its future outlook continues to darken under the weight of taxes, regulatory overreach, and declining private-sector employment.
From 2013 to 2023, California ranked 12th in GDP growth and 13th in non-farm employment growth. However, those gains are overshadowed by the nation’s worst domestic outmigration. Over 2 million residents left the state during the past decade, a trend analysts attribute to high taxes, rising costs of living, and increasingly burdensome regulations.
The California Center for Jobs and the Economy reports troubling shifts beneath the surface. While the state added 181,100 government and government-supported jobs, it lost 171,000 private-sector jobs. Nearly 40% of the new roles were part-time care positions paid at minimum wage, often involving family members caring for elderly or disabled relatives using state funds.
ALEC’s report ranked California in the bottom 10 states on most major tax metrics, including top marginal income and corporate tax rates. The state scored 24th for sales tax burden and 27th for property taxes, but performed poorly on measures of wage laws and labor regulations—key drivers of business competitiveness.
California’s overall economic outlook was ranked 45th in the nation for 2024, continuing a multi-year trend of stagnation. Since 2018, the state has hovered near the bottom, reflecting policies that deter investment and entrepreneurship.
Despite its natural resources and tech dominance, California is losing its competitive edge. ALEC analysts warn that without significant policy reform, the state will continue to lose residents, businesses, and long-term economic momentum.
