California Gov. Gavin Newsom Faces Backlash After Boasting About California’s Economy

California Governor Gavin Newsom has received heavy criticism online after a recent social media post boasting that his state has the most Fortune 500 companies. 

Once hailed as the pinnacle of the American allure, California has continued to decline in popularity in recent years due to a plethora of problems, including rising costs, increased homelessness and crime, and an unreliable supply of energy and water. 

At the beginning of June, Newsom took to X to share a short message about the state’s recent success with Fortune 500 companies. 

Californians wasted no time in responding to Newsom’s comments, with many alleging the governor misunderstood his priorities.

According to one X user, @MerrickGarlands “This is not the win you think it is. We’re bleeding residents and businesses every day. As a resident of CA, I can confirm we are even worse off than we’ve ever been in Southern CA.”

One X user even called Newsom a clown for his role in the state’s enormous $45 billion deficit. 

The prominent social media figure JD Sharp commented on Newsom’s statement, alleging that Newsom cares more about the rich than the middle and lower classes who are currently struggling. 

Despite the backlash online, Newsom continues to promote California as a state that ranks high when it comes to business. On his website, he claims the Golden State is home to 35 of the 50 largest AI companies in the world. 

There’s no denying California has a great track record when it comes to businesses, and it boasts one of the largest economies in the world. 

Of the 57 Fortune companies Newsom mentions as thriving in the Golden State, 44 are in the Bay Area, and most are in the booming tech industry. 

Despite Newsom’s intention to promote California’s corporate success, critics continue to point out that the problems continue to outweigh the positives.

While the governor boasts that the state is home to the most Fortune 500 companies, the California Policy Center has pointed out that more and more businesses are leaving the state for several reasons.

This mass exodus of businesses started to take place after Newsom took office in 2019, and the list of businesses leaving has grown. The center states that the driving force behind this exodus is “California’s high tax burden, over-regulation that strangles businesses of all sizes, poor public schools performance and an ever-increasing cost of living.”

After the 2020 Census, Texas gained more residents and businesses thanks to the rules and regulations (or lack thereof) established by Texas Gov. Greg Abbott.

In comparison, Texas does not have the high tax rates, high housing costs, and strict regulations for businesses that have made it challenging to live and do business as California does.

It also helps that Texas has a pro-business environment that is favorable for smaller and younger businesses. According to ARC Relocation, “The tax on businesses or franchise tax is just 0.375% for businesses with annual receipts between $1.18 million to $10 million.”

Abbott has talked about how Texas is the best place for businesses to relocate and flourish and has attracted the most business relocations and expansion projects in the US.

Since being in office, Abbot has worked with Republican-led legislature to reduce red tape and regulations for businesses, expand job creation programs and grants, skilled workforce training programs, and resources to help small businesses stay afloat.

In 2023, Texas led the US in job growth and creation, and economic expansion, and saw the biggest increase in new residents compared to any other state. Currently, the state is on track to break its own employment and economic records.

“Corporate executives and business leaders across the nation continue to choose Texas because they know that the freedom and opportunity our state has to offer cannot be found anywhere else in the world. Companies are coming to Texas in droves because we offer attractive, pro-growth policies where businesses – and people – can thrive,” Abbott said.

For decades, California has been looked at as the land of opportunity. Every decade from 1850 to 2010, the state’s population grew by 10% or more as people East of the Mississippi were lured by the state’s exceptional climate, geographical beauty, and economic opportunities.

Economist Lee Ohanian of the Hoover Institution at Stanford University and Joseph Vranich, president of the site selection consulting firm Spectrum Location Solutions, collected data on California businesses that relocated from January 2019 to June 2021.

As the California economy continues to struggle as Newsom enters his final year in office, many residents and businesses are hoping for a chance to bring back prosperity, affordable living, and opportunities that don’t alienate lower-income residents.

One X user suggested that Newsom should pay attention to the exodus of residents, writing, “Funny how many people have been voting with their feet and fleeing your state!”