California's Share of U.S. Tech Jobs Plummets 3 Percentage Points Since Pre-Pandemic to 16%

California's long-standing dominance in the U.S. tech sector has seen a notable shift, with its share of nationwide tech jobs falling from nearly 19% before the COVID-19 pandemic to approximately 16% currently. This significant three-percentage-point decline was highlighted by Tahra Hoops on social media, who stated, "> Prior to COVID, nearly 19% of all US tech jobs were based in CA. Now, that number has gone down to nearly 16%." The data, primarily sourced from analysis by Joseph Politano of Apricitas Economics, indicates a broader redistribution of tech employment across the country.

According to a report by the Information Technology and Innovation Foundation (ITIF) citing Politano's findings, California added only about 6,000 tech jobs since January 2020. In stark contrast, the rest of the United States collectively gained approximately 570,000 tech positions during the same period. This trend has pushed California's share of total U.S. tech jobs to its lowest level in over a decade, with tech payroll growth in the state significantly lagging behind other emerging tech hubs.

Despite this decline in national share, some reports suggest a more nuanced picture for specific tech regions within California. CalMatters reported in February 2024 that Silicon Valley, encompassing Santa Clara and San Mateo counties, experienced a net gain of 2,700 jobs from June 2022 to June 2023. Furthermore, the region's 20 largest tech companies still employ 37,000 more individuals than they did at the end of 2019, prior to the pandemic, indicating that while some companies over-hired and subsequently laid off staff, overall employment in the core tech hub remains robust.

The shift is largely attributed to the rise of remote work capabilities, which accelerated during the pandemic, allowing tech professionals to relocate from high-cost areas. States like Texas, Washington, and Florida have emerged as significant beneficiaries, recording substantial tech job growth and increased tech payrolls. These states offer lower costs of living and potentially different tax structures, drawing talent and companies away from California.

While California continues to attract a substantial 34% of the nation's venture capital funding, the long-term implications of this outward migration of tech jobs are a subject of ongoing discussion. The state's economy is heavily reliant on the tech sector, and this redistribution of employment could influence future tax revenues and economic development strategies as other regions continue to build their tech ecosystems.