California unemployment rises to 5.5%, worst in the U.S. as tech falters

https://www.sfchronicle.com/california/article/unemployment-rate-rises-tech-20819276.php

by littlexsparkee • 11 months ago

279 297 11 months ago

nextworddev3• 11 months ago

Hmm anecdotally I’m seeing a lot of hiring in all places ranging from faang to startups. So tech hiring is not evenly distributed.

seanmcdirmid• 11 months ago

It could be FAANG retreating from HCOLs to LCOLs with the hope that they can make up the expertise gap with AI.

rafram• 11 months ago

Unless you can provide some evidence for that, it seems like pretty plain BS. The issues with outsourcing/offshoring were never the kind that can be solved with AI.

nextworddev3• 11 months ago

This is a big part. Lots of rotating L6 and L7 with L4 and 5

0cf8612b2e1e• 11 months ago

Are those job posts or actual hires?

FollowingTheDao• 11 months ago

Yes, I was going to ask the same question. Article on the topic:

https://www.apollotechnical.com/ghost-jobs-in-tech-why-compa...

Der_Einzige• 11 months ago

That's hiring for people with AI skills. If you're not in AI, you're fked right now.

littlexsparkee6• 11 months ago

Or peripheral to it, e.g. data engineering for pre-training data or a joint DE/ML role, etc. Sometimes the scale (petabyte) or specific stack experience is a barrier.

__loam• 11 months ago

Not true. The people who are screwed right now are juniors. There's still a lot of hiring happening for traditional development.

esseph• 11 months ago

Not every business is in tech.

Every business uses tech.

R&D tax credit problem fixed, now development starts to get back on track at a lot of companies.

Esophagus4• 11 months ago

There is definitely hiring going on, but having seen this now from the hiring manager side, companies are flooded with candidates because of all the tech layoffs.

So yes, companies are hiring, but it’s hard to get hired right now because of the volume of candidates.

Not impossible, but definitely harder.

darth_avocado2• 11 months ago

In my anecdotal experience hiring has been picking up but it seems that everyone expects the 2021 ZIRP economy where new grads were getting $200-300k offers with easy interviews. The experienced hire market is now back to where we were in 2015-2016 and new hire market slightly lagging behind. Unfortunately a lot of people will have to be comfortable working for non tech companies in tech roles like 10 years ago. It sucks because the living standards are more expensive than 10 years ago.

nextworddev3• 11 months ago

This is the right take, plus the glut of applicants.

999900000999• 11 months ago

I just had to accept a keep the lights on offer. Still a software role, but I'm making what I was in 2018 without adjusting for inflation.

2020 I was making about 80k more, even though I got that job through a combination of networking and luck.

My budget is less ball out and more it's nice I covered my rent

scarface_74• 11 months ago

Most developers have always worked for non tech companies…

giantg24• 11 months ago

I'm not seeing many jobs in my area for non-tech companies. The non-tech company is working for is outsourcing to India. I might be getting terminated soon and expect I will end up working retail. Nobody wants early career generalists.

scythe• 11 months ago

I got my first (and only; I changed careers) tech job in 2014. I only learned years later that 2014 was considered a "down" year for the industry. The "job market" exists at the margins. If you're good, you get hired.

rufus_foreman• 11 months ago

> If you're good, you get hired

In the long term. But in the long term we're all dead.

I only have one social media account, LinkedIn, and I have that account because I wanted to help people that got laid off from the company I worked for who were good, but were definitely not getting hired in 2008. There were developers who were top notch, but they weren't getting hired, they were sitting there not working getting poorer, frustrated and divorced.

I'm on my last job so I have no idea what the job market is like now, don't know don't care, but no. There are times when even the best developers can't even get a phone interview.

AstroBen3• 11 months ago

I got my start around then as a junior working fully remote with 6 months experience.. something everyone assures me is impossible

Perseverance is the most important thing I think

bdcravens• 11 months ago

Is it possible that the companies with cash to burn are trying to take advantage of the situation and swoop up talent on the cheap?

throwmeaway2222• 11 months ago

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.

littlexsparkee6• 11 months ago

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.

throwmeaway2222• 11 months ago

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

dyauspitr2• 11 months ago

This might be the only good thing in all of BBB

bravesoul2• 11 months ago

Good... for tech workers, and tech companies.

MisterBiggs• 11 months ago

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• 11 months ago

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).

Terr_5• 11 months ago

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.

ivewonyoung17• 11 months ago

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?

jvanderbot• 11 months ago

I and a few thousand of my colleagues were laid off that day.

echelon• 11 months ago

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!

silisili• 11 months ago

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.

sexeriy237• 11 months ago

Ah yes, the BBB that fixed the rules that trump changed last time.

ivewonyoung17• 11 months ago

Why didn't the Biden admin "fix" the rule before it took effect in Jan 2022? They passed several bills, they could've have included the repeal. It took effect on the democrats watch, because of their inaction.

Edit: Republican Marco Rubio introduced a clean bill to repeal the changes in 2023.

https://www.congress.gov/bill/118th-congress/senate-bill/282...

The Democrat controlled Senate blocked it from coming to a vote.

Why does HN always blame only Republicans for this change?

bitbasher• 11 months ago

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.

seangrogg3• 11 months ago

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.

650REDHAIR• 11 months ago

That’s quite the leap there.

But not a surprise based on your history here on HN.

deadbabe• 11 months ago

I’ve started seeing emails from recruiters coming in again after a long drought. These unemployment figures will probably be lagging indicators.

jfengel2• 11 months ago

Good on the rust belt states for being able to get their unemployment down under 5.5%.

giantg24• 11 months ago

I wonder if the participation rate is lower or people moved away.

jfengel2• 11 months ago

Or maybe new jobs opened up.

heavyset_go3• 11 months ago

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.

hshdhdhj44444• 11 months ago

It’s helpful when the government is subsidizing your entire economy.

Farming, healthcare, autos, etc are almost completely subsidized by the government.

stockresearcher• 11 months ago

Careful. Coronado, Miramar, Camp Pendleton, Twentynine Palms, Edwards, Mcclellan, Vandenburg, Travis, etc. How many bases do you think there are in Iowa?

jeffbee3• 11 months ago

Same newspaper last week: tech guys so over-abundant they are paying $2000 each to sleep in bunk beds in Mission flophouses.

littlexsparkee6• 11 months ago

you can still have a local AI boom in SF (which has a housing shortage) while tech employment falls state-wide

aaroninsf• 11 months ago

Worst reported.

Serious question: who is producing reliable numbers now? The Trump administration is actively suppressing federal reporting and openly threatening to cease collecting and reporting data,

and this is absolutely signaling to sycophants and supporters that they should falsify or withhold unflattering data.

This is a truly terrible timeline.

Waterluvian• 11 months ago

The USSR went this route and it worked out great. It’ll be interesting to watch the U.S. do the same.

jeffbee3• 11 months ago

So the clickbait headline is "as tech falters" but tech actually had the least losses of any sector, except government. More correct in all possible ways would have been "as construction falters", "as manufacturing falters", or "as banking falters".

littlexsparkee6• 11 months ago

it's a little tricky with the labels, they did mention that professional and business did the worst of all sectors and while information sector lost jobs as well, that sounds like the closest match for tech so I have reservations about the claim as well

jeffbee3• 11 months ago

Generally the BLS categories are hard to parse. Some major companies are software categories, others are information. But in general the "information" sector is pretty heavy on newspapers, books, and film as well. And search engines etc have their own categories.

Would you be able to guess without looking what top-level category contains Nvidia, Microsoft, Apple, or Google?

dyauspitr2• 11 months ago

These might be the only reliable numbers in the country…

cheschire• 11 months ago

https://archive.is/Gsu0y

Herring2• 11 months ago

What’s with the comments here? Forget the official reports, we should ask a couple randos on HN about their inboxes?

kristopolous3• 11 months ago

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_• 11 months ago

People leaving to do their own startups would be a pretty small portion of the job market, even on the SF Bay area.

tootie• 11 months ago

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.

nadermx• 11 months ago

We're littreally reading stories upvoted in importance by a bunch of randos. What else do you expect?

Herring2• 11 months ago

True ...

littlexsparkee6• 11 months ago

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.

readthenotes1• 11 months ago

Well, you survey 4400/13500000, the rando inbox is adding quite a bit to the sample size

selfhosttoday2• 11 months ago

I'm not sure if this is entirely related, but during COVID (in SF) I was always surprised to see my colleagues so adamant against RTO once the vaccine was widely disseminated. I always felt that if jobs were remote there would be no need to hire us specifically - they'd hire in the cheaper parts of the country remotely or worse yet, other countries. The usual retort was that folks in North Carolina, Canada, Eastern Europe, Bangalore or whatever weren't as good - but I always thought such rebuttals were arrogant at worst, and ignorant at best.

Sad to see that to some extent that's exactly what happened. My current tech take is that developers shouldn't allow AI and/or agents to do the entirety of their job, rather allow them to do more, and it should be framed as such specifically. e.g. don't use AI to write the entire feature, use it to make the feature better and drive more revenue, or more correct and result in less bugs, thus less wasted effort on ops/etc.

It's amusing to see some people excited for AI to do the entirety of the implementation and planning, as if there would be no impact on us. If AI is that good, you just need TPMs (to the extent it's even possible, anyway).

It's no surprise to see that jobs that cannot be done remotely are making a comeback.

dasil003• 11 months ago

Having seen what happens when TPMs run things and otherwise smart engineers just do what they’re told, I can assure you this will not lead to good outcomes no matter how good AI gets.

selfhosttoday2• 11 months ago

Yes, but at least this way you don't need to pair SWEs.

declan_roberts• 11 months ago

This is the time to cut back on h1b permits.

bsder• 11 months ago

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.

ahmeneeroe-v25• 11 months ago

Not sure how that is better. Remove current H1Bs prior to any layoffs of US nationals.

hshdhdhj44444• 11 months ago

There are already limitations on hiring H1Bs after layoffs.

la647104• 11 months ago

H1-b s are small compared to the offshoring of jobs. Have you seen the office sizes of every big and medium technology company in India and other countries? They employ thousands of programmers there. There is a much greater number of jobs that you don’t even see that’s get done from overseas. This invisible layer is much bigger than the annual 65k h1b jobs.

wnc3141• 11 months ago

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.

IX-103• 11 months ago

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.

wavemode• 11 months ago

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.

akmarinov• 11 months ago

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

mertleee4• 11 months ago

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.

justinhj• 11 months ago

if it means I can hire Waterloo graduates again here in Canada that sounds fantastic

mertleee4• 11 months ago

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.

akavi• 11 months ago

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).

jmspring5• 11 months ago

What about the "masters" diploma mills?

nickm12• 11 months ago

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.

pj_mukh2• 11 months ago

It's not most people you meet, its most people you remember you meet.

https://dictionary.apa.org/distinctiveness-effect

greesil2• 11 months ago

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.

hazek1122• 11 months ago

If they're so smart maybe they should help their own country build companies...

joshdavham• 11 months ago

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?

hshdhdhj44444• 11 months ago

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-v25• 11 months ago

If your sarcastic comment were true they'd be offshoring wholesale even with the existence of the H1B program.

horns4lyfe• 11 months ago

You honestly don’t think they already do that as much as possible?

yodsanklai• 11 months ago

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.

ahmeneeroe-v25• 11 months ago

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.

hazek1122• 11 months ago

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.

mrtksn3• 11 months ago

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?

exabrial• 11 months ago

Literally no jobs are going away due to AI.

mrtksn3• 11 months ago

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.

hn_throwaway_99• 11 months ago

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...

speakfreely• 11 months ago

"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.

krapp• 11 months ago

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.

platevoltage5• 11 months ago

The word “literally” is doing a LOT of work here.

nothercastle2• 11 months ago

Art jobs got destroyed everything else AI was just a excuse

cjohnson3183• 11 months ago

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."

victorbjorklund• 11 months ago

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).

chinchilla20202• 11 months ago

helpdesk

giantg24• 11 months ago

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• 11 months ago

Not always. Some industries just never come back. Where is the oil lamp or camera film industry now?

b3ing• 11 months ago

We are giving India the IT market, just like China got manufacturing.

mertleee4• 11 months ago

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.

ahmeneeroe-v25• 11 months ago

Worse because we're giving it to India in the US.

dmonitor• 11 months ago

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

heavyset_go3• 11 months ago

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.

dangus• 11 months ago

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.

al_borland2• 11 months ago

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.

throw0101c• 11 months ago

Why not the software too?

Would it be any worse than the Dot-com bust?

* https://en.wikipedia.org/wiki/Dot-com_bubble

Buttons840• 11 months ago

What if this turns into rust belt

We're rewriting the belt.

geophph• 11 months ago

Ah ha!

flashgordon• 11 months ago

Haha so true. Though I feel for this to happen the cost of building software products has to be high. With manufacturing your average mechanical eng grad cannot build something and sell (factories' costs etc) out the gate.

With software any body can build and put something out there (ignoring quality and tech debt and taste etc). Where software might go the way of manufacturing is when price of ai actually reflects hardware costs (my estimates of the realistic Claude max pricing at cost is between 7-10k and month). Now put together other structures that will come up to "industrialize" ai+software software may not have easy entries sadly.

softwaredoug• 11 months ago

Are we sure its just tech? Isn't the entertainment industry going through a rough time right now as well?

leeroihe• 11 months ago

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.

jmspring5• 11 months ago

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.

JLO64• 11 months ago

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.

lisbbb• 11 months ago

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...

siliconc0w• 11 months ago

After a long drought I've seen more recruiter emails recently but I do think the days of 500k-1M TC are dwindling. Big Tech seems to be moving a lot of positions to LCOL areas and I don't see that abating.

adw2• 11 months ago

This very very very much depends what you do. ML critical-path roles are doing much better than everything else as far as I can tell.

mdaniel• 11 months ago

In the midst of a gold rush, sell shovels and maps

In the less glib way, I'll draw attention to the fact that machine learning roles are only one moving part of the machinery required to manage, operate, train, evaluate, demo, and integrate AI adjacent opportunities. That's to say one need not be a pytorch or differential equation ninja to contribute meaningful to riding the hype train

vondur2• 11 months ago

California’s economy feels like it’s running on tech companies at this point. Any downturn in their hiring has really big effects on the California state budget.

heavyset_go3• 11 months ago

That's the downside of depending on regressive income taxes instead of taxing assets, capital gains, dividends, etc sufficiently.

vondur2• 11 months ago

I think California had the highest capital gains tax in the US.

wskinner• 11 months ago

California has the most progressive taxation scheme of any state. Dividends and capital gains are taxed as income. I’m curious what you would consider “sufficient” taxation - the top marginal combined rate for a Californian is over 50%.

Ericson2314• 11 months ago

What it needs is more property tax aga, or better yet, land value tax.

bushbaba• 11 months ago

Unemployment in California was higher back in 2015. Feels like this is layoff related

ipnon2• 11 months ago

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.

TowerTall• 11 months ago

It is only two weeks ago the commissioner of labor statistics got fired and going forward one needs to be very sceptical about the integrity of numbers or statistics coming from the official US government resources. How can anyone at this point trust any US statistics?

https://www.cbsnews.com/news/trump-fires-commissioner-of-lab...

w10-1• 11 months ago

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• 11 months ago

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

tqi3• 11 months ago

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.

disillusioned• 11 months ago

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.

rubidium2• 11 months ago

Biotech is facing a huge downturn right now too.

Fade_Dance• 11 months ago

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.

daxfohl2• 11 months ago

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.

groby_b• 11 months ago

Your cynical hunch is very much wrong. That change was easier to swallow on massive capitalization than for smaller businesses.

QuantumGood• 11 months ago

Zero Interest Rate (monetary) Policy targets short-term interest rates at or near 0% to stimulate economic growth via extremely cheap borrowing, to encourage spending / investing / risk-taking

RestlessMind• 11 months ago

It doesn't have to be either-or. I think there are a bunch of factors all contributing to the current state of developer job market:

1. Rise of remote work: sure, it was there in some form. But prior to 2020, state of the remote work tools was abysmal. The prevalent culture was also about hiring the whole teams. After covid, remote work tools are far better. And companies learned to onboard one new remote hire at a time which over time is now allowing them to replace US workers with cheap overseas ones at a manageable pace.

2. end of cheap money - if the risk free rate is 4-5%, the demand from risky ventures like software startups is going to go up. So funding has dried up at the margins.

3. rise in the discount rate - related to the previous point, the discount rate one applies to investments have gone up. That means startups valued at 1B are now valued only at a few hundred millions. So to avoid down or flat rounds, startups have to cut costs drastically and show profitability to justify a higher valuation. Cue all the job cuts, belt tightening and death marches with a skeleton crew.

4. rise of AI - AI is helping with productivity of coding and non-coding tasks. It is also acting as an excuse for #3 when laying people off.

In my experience, all these are meaningful factors for the abysmal state of the developer market.

tqi3• 11 months ago

Definitely agree that it's not mutually exclusive, however I think 4 is likely orders of magnitude less impactful than the others...so far. Which isn't to say the effects won't start to magnify soon.

I think most of the trends we are seeing started around 2022, but if AI delivers on its promise things may accelerate in the coming years.

xyst• 11 months ago

Got to love our kakistocracy.

roody15• 11 months ago

H1B visas are not going to help the situation. The reality is our corporate structure lobbies for legislation that lowers wages through various means and is quite effective at doing it.

JohnTHaller• 11 months ago

All of New York City only added 1,000 jobs in the first half of 2025. The economy is crumbling underneath the hood.

California unemployment rises to 5.5%, worst in the U.S. as tech falters

Related Stories