{"id":1781,"date":"2026-06-10T15:39:12","date_gmt":"2026-06-10T15:39:12","guid":{"rendered":"https:\/\/nextcitydigest.com\/?p=1781"},"modified":"2026-06-10T15:39:12","modified_gmt":"2026-06-10T15:39:12","slug":"how-californias-economy-survives-its-workers-are-no-3-for-productivity","status":"publish","type":"post","link":"https:\/\/nextcitydigest.com\/?p=1781","title":{"rendered":"How California\u2019s economy survives: Its workers are No. 3 for productivity"},"content":{"rendered":"<div>\n<div><iframe allow=\"geolocation\" allowfullscreen=\"yes\" allowtransparency=\"1\" class=\"iframe\" height=\"550px\" id=\"6a2982a9913d6\" loading=\"lazy\" scrolling=\"yes\" src=\"https:\/\/flo.uri.sh\/visualisation\/29237510\/embed\" width=\"100%\"><\/iframe><\/p>\n<p>If California is such a horrible place to do business, why do bosses keep their operations here?<\/p>\n<p>Read more <a href=\"https:\/\/nextcitydigest.com\/?p=1779\">Rams\u2019 Alaric Jackson arrested on felony domestic violence charge<\/a><\/p>\n<p>My trusty spreadsheet found a key reason when reviewing 2025 labor productivity data from the Bureau of Labor Statistics for 50 states and the District of Columbia. This math estimates changes in the classic business struggle: the value of output compared with what it takes to make the product.<\/p>\n<p>Turns out, California\u2019s labor productivity took the third-biggest jump among the states last year. The 4.2% jump was more than twice the national average of 1.8%.<\/p>\n<p>Thank you, California workers!<\/p>\n<p>Now, the report points out that changes in any state\u2019s productivity are not only about employee efforts. The bureau explained that results \u201creflect the joint effects of many influences,\u201d such as technology, investment, resource use and management skills.<\/p>\n<p>With widespread credit for being lean and mean noted, consider that California\u2019s workplace productivity increase was bested in 2025 by only the District of Columbia, up 5.2%, and Arizona, up 4.4%.<\/p>\n<p>Conversely, productivity dropped in eight states: Idaho was down 2.5%, Alaska, off 2.3%, Mississippi, off 1.3%, Wyoming, off 0.7%, Oklahoma and West Virginia off 0.4%, and Nebraska and Nevada, off 0.3%.<\/p>\n<p>And what about California\u2019s economic arch-rivals?<\/p>\n<div>\n<\/div>\n<p>Texas only managed 0.6% productivity growth, landing at No. 37. Meanwhile, Florida\u2019s 1.1% increase put it at 29th.<\/p>\n<h4>Two-part play<\/h4>\n<p>This measure of business efficiency comes at the intersection of two factors driving business success.<\/p>\n<p>First, you\u2019ve got the private sector\u2019s growth: basically, how many more goods and services were made, not counting government or farming.<\/p>\n<p>Then, how many more hours did it take workers to make all that happen?<\/p>\n<div>\n<\/div>\n<p>Start with California\u2019s economic output. It grew 2.9% last year, the ninth-fastest growth among the states and beating the national average of 2.4%.<\/p>\n<p>The fastest-growing outputs were found in Alaska (up 3.8%), Florida (3.7%) and South Carolina (3.6%). Texas, at 2.6%, ranked No. 17.<\/p>\n<p>The laggards included West Virginia and Nebraska, up only 0.5%, and North Dakota and Maine, up 0.8%.<\/p>\n<p>Now the Golden State\u2019s secret sauce for productivity \u2014 perhaps a benefit more for bosses than workers \u2014 was a 1.2% drop in workers\u2019 hours. Think efficiency.<\/p>\n<p>This was the seventh-largest decrease in hours among all states. In contrast, workers in the rest of the country worked 0.6% more.<\/p>\n<p>Read more <a href=\"https:\/\/nextcitydigest.com\/?p=1777\">Photos: California estate, site of \u2018Dynasty\u2019 pond brawl, seeks $45 million<\/a><\/p>\n<p>There were 17 declines in hours, topped by Oregon, off 2.4%, Arizona, off 1.8%, and D.C. and Louisiana, off 1.7%.<\/p>\n<p>Hours jumped the most in Alaska (up 6.2%), Idaho (up 5.4%), Mississippi (up 3.3%) and Florida (up 2.6%). The 2% increase in Texas was the ninth largest.<\/p>\n<h4>Historically speaking<\/h4>\n<p>California\u2019s workers have been cranking out high productivity for years.<\/p>\n<p>With business costs so high here, being efficient isn\u2019t just a nice touch. It\u2019s a must.<\/p>\n<p>Between 2007 and 2025, California\u2019s labor productivity grew at the third-swiftest pace among the states. The 2.4% annual rate easily topped the nation\u2019s 1.6%. Only workforces in Washington state (3%) and North Dakota (2.9%) have been more efficient.<\/p>\n<p>Over the long haul, the least productive workplaces were in Wyoming, with just 0.1% annual growth, and Connecticut and Louisiana, at 0.5%.<\/p>\n<p>Texas\u2019 1.7% annual productivity growth since 2007 ranked No. 15, while Florida\u2019s 1.4% ranked No. 27.<\/p>\n<h4>Sore spot<\/h4>\n<p>There\u2019s a catch hiding in California\u2019s shiny productivity numbers.<\/p>\n<p>California labor costs per unit of production were up 3.5% last year, the fifth-biggest jump among the states and well above the nation\u2019s 2.4% increase.<\/p>\n<p>Bigger hikes than California were found only in Idaho at 5.9%, Mississippi at 4.6% and Nevada at 3.8%. One state had production costs fall, Montana, off 0.3%. D.C. was flat.<\/p>\n<p>Texas costs, up 2%, ranked No. 27, while Florida\u2019s 3.2% ranked No. 12.<\/p>\n<p>Historically speaking, California has been a relatively inexpensive place to do business by this spending metric. So this is a noteworthy reversal.<\/p>\n<p>Since 2007, the Golden State\u2019s 1.5% average annual per-unit cost growth tied for sixth lowest with Texas. Nationally, the expense metric rose 1.7%.<\/p>\n<p>The smallest gains were in New Mexico and North Dakota, up 0.9%, and Nebraska, up 1%. The largest increases included Wyoming and South Dakota, up 2.7%. Florida\u2019s 2.2% increase was the ninth worst.<\/p>\n<p>California critics will say the state is antibusiness. Well, the economy survives its pro-worker stance with a workforce that\u2019s top-of-the-charts efficient.<\/p>\n<p>Keeping productivity sky high is just another headache for Golden State bosses.<\/p>\n<p><em>Jonathan Lansner is the business columnist for the Southern California News Group. He can be reached at jlansner@scng.com<\/em><\/p>\n<p>Read more <a href=\"https:\/\/nextcitydigest.com\/?p=1768\">Map: Warning in Bay Area for wildfire danger; power shutoff possible<\/a><\/p>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>California&#8217;s labor productivity took the nation&#8217;s third-biggest jump last year. The nation? Just 1.8%.<\/p>\n","protected":false},"author":1,"featured_media":1780,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[],"class_list":["post-1781","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.6 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>How California\u2019s economy survives: Its workers are No. 3 for productivity - Next City Digest<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/nextcitydigest.com\/?p=1781\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"How California\u2019s economy survives: Its workers are No. 3 for productivity - Next City Digest\" \/>\n<meta property=\"og:description\" content=\"California&#039;s labor productivity took the nation&#039;s third-biggest jump last year. 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