The number of big California employers – defined by yours truly as bosses with 100 or more workers – dropped by 222 in the four years ended March 2023.
This loss – only 1% of the statewide total – may not be the business exodus certain California critics complain about. But that’s what my trusty spreadsheet found after reviewing federal employment data tracking workplaces and workers through unemployment insurance filings between the first quarters of 2019 and 2023.
The stats showed 29 states had a net decline in their roster of big establishments – and only two places lost more than California over four years: New York, down 344, and Ohio, off 229. The No. 4 drop was Pennsylvania, off 202, then Illinois, off 198.
Nationwide, the number of big employers grew by 2,076 in 2019-23. The largest gains were found in Texas, up 1,505, Florida (836), Arizona (367), North Carolina (326), and Georgia (225).
Now, you may think that tracking establishments with 100 workers or more isn’t a good definition of “big” business. Consider that workplaces with smaller staffing make up 98.8% of all California job sites.
And please do not ignore the importance of these big employers. Large workplaces or corporate headquarters are more than just status symbols – their activities are tied to serious economic wealth.
In California, these bosses represent only 1.2% of all workplaces. Yet they control 41% of all jobs statewide, were responsible for 52% of 2019-23 job creation, and pay 56% of total wages.
It’s also true nationally. Big US employers are 1.6% of all establishments but employ 42% of American workers, were 32% of four-year hiring, and equal 52% of combined paychecks.
High drama
Tracking business creation is far tougher than following closures or departures.
Success is often accomplished with little fanfare. Failure is routinely accompanied by hype or government paperwork.
We’ve seen the comings and goings of larger employers become both high-profile theatrics. Some companies departing California have taken shots at the state’s perceived anti-business biases.
However, California’s 2019-23 dip in its count of big workplaces doesn’t mean the state isn’t well-stocked with significant employers.
As of 2023’s first quarter, California had 21,123 of these 100-plus-employee workplaces – the biggest count in the nation. No. 2 was Texas at 18,087, Florida at 12,538, New York at 10,837, and Illinois at 8,175.
And those establishments employ significant numbers of people – a combined 6.28 million jobs in California, No. 1 among the states, followed by Texas at 5.17 million, New York at 3.77 million, Florida at 3.27 million, and Illinois at 2.59 million.
Growth story
These big shops are also hiring machines.
California’s large employers, despite the dip in numbers, added a combined 200,700 workers in four years. Only two states added more – Texas, up 525,100, and Florida, up 311,000. No. 4 was North Carolina, up 140,000, and Arizona, up 118,800.
Note that there were 21 states that saw job losses at big employers in 2019-23, topped by Michigan, off 38,900, Minnesota, down 36,900, Connecticut, down 26,900, Pennsylvania, down 26,800, and Louisiana, down 26,700.
Perhaps equally important as the size of these payrolls is their hefty paychecks.
California workers at big companies averaged annualized wages of $123,400 as of 2023’s first quarter – that’s up 21% in four years and 61% above the nation’s average $76,800.
Only three places paid more: New York at $141,800, Massachusetts at $127,500, and Washington, D.C. at $123,700. By the way, Texas was No. 11 at $95,300 and Florida was No. 30 at $75,800.
Also, note the extra pay that workers receive at these larger workplaces compared with other jobs.
California’s big-shop premium was 36% above the $76,800 paid to all workers statewide – the largest premium among the states and nearly double the 19% additional pay at large employers nationally.
Bottom line
Does my math mask how the really-really-really big employers have fared in California?
Let’s eyeball the workplace behemoths – establishments with 1,000 or more workers.
California had 820 of them in 2023’s first quarter – a gain of 60 in four years. Yes, up 60. These huge workplaces employed 1.9 million, up 243,500 jobs since 2019 or 16% growth.
In California, these jobs came with average wages of $160,700 annually in 2023, which is 37% more than the $117,600 wages at similar shops across the U.S.
And if this doesn’t convince you there’s still large-scale business creation ongoing in California, ponder the latest version of the Fortune 500 – a ranking of America’s largest companies by revenue.
California is now home to 57 of these corporate titans – marking the first time since 2014 the Golden State was the No. 1 state for these headquarters. Texas and New York tied for second with 52 Fortune 500 companies each.
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