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“California leads, the nation follows” has been a popular notion among state boosters, investors and progressives for years. Now, in the time of COVID-19, some are using it to proclaim the state’s relatively positive results (so far) thanks to our aggressive shutdown policies.
But even though California has done a better job than most of limiting coronavirus deaths among its 40 million people, the fallout hitting the world’s fifth largest economy is unprecedented. State unemployment leapt from 3.5% in January to 16.3% in May; more than 3 million Californians are unemployed. In the wealthy Bay Area — usually more recession-proof than much of the state — more than 146 companies have shed 136,000 jobs in less than four months.
How do these losses affect startups, one of California’s greatest hallmarks? In April, National Public Radio reported that job postings for about 50 startups worth more than $1 billion have dropped nearly 30% since the outbreak of the virus. This loss of opportunity not only affects investment potential, but harsh day-to-day realities; if a startup must lower its burn rate, the main lever it has is headcount. And startups well beyond California are feeling the pain: A recent survey by search firm Startup Genome asked 1,000 tech startups in 50 countries about …
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