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

Original Article ↗ Hacker News Discussion ↗

State of Tech Hiring and Compensation

  • Hiring is highly uneven: some see active recruiting from big tech and startups, others report near-total freezes, especially at larger firms.
  • Many postings are suspected “ghost jobs”; companies interview but then cancel or repurpose roles.
  • Applicant glut from recent layoffs makes it harder to stand out; experienced engineers can still get offers but with more effort.
  • Juniors and early-career generalists are described as “screwed”; many anecdote about accepting 2018-level pay or leaving tech.
  • Several people report a clear uptick in recruiter outreach and offers around July, sometimes linked (speculatively) to recent R&D tax-code changes.

AI, Productivity, and Offshoring

  • Sharp disagreement on AI’s labor impact:
    • One view: future is low-wage devs + AI, with US devs squeezed out and remote/offshore teams taking over.
    • Counterview: AI amplifies high-skill, high-wage devs; juniors plus AI produce unchecked nonsense.
  • Multiple anecdotes of consulting or debugging work lost to ChatGPT; others argue this doesn’t yet show up at macro scale.
  • Debate over whether AI is actually cutting jobs vs being used as a narrative cover for cost-cutting driven by other factors.

Remote Work, WFH, and Global Labor Markets

  • Some argue WFH made it far easier to replace NA-based engineers with cheaper overseas workers; RTO is framed by a few as a long-term job protection for locals.
  • Others counter that large-scale offshoring predates COVID and WFH; remote tooling just made existing patterns smoother.
  • Concerns that US/Canadian developers overestimated their unique value relative to similarly skilled workers abroad.

Tax Policy, Politics, and Tech Layoffs

  • Long dispute over the 2017 change to Section 174 (capitalizing R&D, including software), its 2022 effective date, and whether it helped trigger layoffs.
  • Participants argue over which party is more to blame for allowing it to bite and who actually “fixed” it in the latest big bill; accusations of bad faith on both sides.
  • Some see the recent fix as meaningfully improving US hiring; others think ZIRP’s end, VC retrenchment, and overproduction of CS grads are more important.

Unemployment, Sectors, and Data Quality

  • Several note that professional/business services and construction/manufacturing/banking show larger losses than “information”, so “as tech falters” is viewed as misleading.
  • Some worry about political interference in federal statistics (including firing of the labor-statistics commissioner); others point to BLS methodology to defend reliability.
  • Commentary that California’s revenue dependence on high-earning tech workers amplifies the budget impact of sector slowdowns.