This is nearly as bad as the early 90s. It struck me that CA may go the way of OH and other rust belt states. It seems the American form of capitalism is failing.
Sorry, no jobs. This is California
Thu Oct 15, 2009 11:42am EDT
By Jim Christie - Analysis
SAN FRANCISCO (Reuters) - If you're looking for work, don't look in California.
The world's eighth largest economy is still finding its feet after suffering multiple economic shocks, including a housing slump, mortgage crisis and recession.
Employers in California, the most populous U.S. state, are expected to keep cutting staff in 2010 as the wider U.S. jobs market recovers.
As industries in other U.S. states prepare to rehire on signs of recovery, firms in California are still waiting for their economy to rebound.
The state has 12.2 percent unemployment, above the national U.S. level of 9.8 percent, and at odds with California's image as an oasis of opportunity in hard times.
California's economic engines -- Silicon Valley, Hollywood and gateway ports to Asia -- remain the envy of other U.S. regions but seem incapable of reducing Rust Belt-like unemployment rates.
That is largely because of the Golden State's housing and home building crisis.
In the 12 months through August, California's construction industry shed 142,000 jobs, or 18.5 percent of its work force, marking the largest decline on a percentage basis over the period of surveyed industry groups.
Those workers are struggling to find new jobs in construction or other trades, according to analysts.
House prices soared higher in California than in most other U.S. states earlier this decade and have crashed harder amid the credit crunch.
Developers are trying to unload unsold new homes and real estate agents are relying on selling foreclosures for a large share of business.
Tight credit and steep job losses have slimmed ranks of prospective home buyers, with many waiting for prices to drop further. At the same time, a number of other states are beginning to see home prices stabilize.
Tumbling personal, corporate and property tax revenues have put the brakes on government hiring as manufacturers wait for consumer spending to pick up before adding jobs.
"We're calling for a jobless recovery," said Jack Kyser, founding economist of the Kyser Center for Economic Research at the Los Angeles County Economic Development Corp.
SURVIVAL MODE Continued...
reuters.com |
