Decline in Jobs May Signal Slow Recovery in State
While the U.S. economy finally began to produce more jobs last month, California’s own jobs machine sputtered and stalled, raising worries that the recession may hang on somewhat longer in the state than the nation overall.
“It’s not like we’re hemorrhaging jobs here, but losing employment doesn’t contribute to the case that California is joining in the recovery either,” said David G. Hensley, an economic forecaster at UCLA.
California lost 4,600 jobs last month on a seasonally adjusted basis, according to the state’s Employment Development Department. The drop, reflecting weakness across a broad spectrum of industries, contrasted with a more upbeat national picture.
Overall, the United States gained 59,000 jobs in May, reversing a 10-month string of shrinking job rolls and raising hopes that the recession is starting to fade out nationally.
“I was hoping for some clear signal in this report,” Hensley added. “I think we got one for the United States, but I don’t think we got one for California.”
For those in search of a job, the question of when the recovery will begin hardly seems academic.
Jeffrey Schneickert, 22, of Mission Viejo, has been working at odd jobs since he lost his job as a computer programmer in February. He’s worked as an assembler at a high-tech factory in Irvine and as a customer service employee at a car rental firm. Both jobs paid about $6 an hour--or roughly half what he earned as a programmer. The experience, he says, has left him embittered.
“I was making more money per hour when I was in high school than what I’m earning today,” he said. “But I had to take what I can to pay my bills.”
One favorable glimmer for California: First-time claims for unemployment insurance fell in the state last month. The May total of 65,405 new claims compares to 68,078 such requests in April, when more laid-off workers were lining up for benefits.
Still, the new government report provided scant evidence that California had turned the corner toward recovery.
Among large industrial states, only Massachusetts and Michigan--with 9.6% unemployment rates--had higher jobless rates than California’s, which was reported at 7.7%. Pennsylvania also had a 7.7% jobless rate, according to the Labor Department.
In addition, California’s overall economy continues to trail much of the West, where the recession has been comparatively mild in many places. Parts of Nevada, Arizona, Utah, Washington and Idaho, for example, are among the nation’s leaders in job creation during the past year.
“California is now behaving like the Northeast and South Atlantic,” said Mark M. Zandi, an economist with Regional Financial Associates in West Chester, Pa. “Now it’s California’s time to go through the downturn.”
Just last month, there were indications that it might be California’s time to recover. According to revised figures, California gained 13,000 jobs in April, even as jobs continued to be eliminated nationally.
In May, however, California’s comeback came at least to a temporary halt.
Job totals dropped statewide in mining, construction, manufacturing, transportation, trade, finance, real estate and government. Only services posted a gain last month. By contrast, the nation’s May increase in jobs, though hardly prodigious, raised hopes of a broad-based economic renewal because it featured modest gains in construction, manufacturing and other industries.
For the United States, “the jobs gain was comprehensive even though it wasn’t very large,” Hensley observed. “California was the opposite. The job loss was comprehensive, even though it wasn’t very large.”
In any case, some analysts say it is unlikely that California’s recovery will lag that of the rest of the nation by too much or that a major U.S. turnaround could even occur if California remains in a slump.
That is because the economic fortunes of the California and national economies are linked. Almost 12% of U.S. jobs are in California, and companies throughout the nation rely on the state’s giant consumer market for sales.
Indeed, even as economists pored over the new job statistics Friday, there were at least some favorable reports from the job market.
Wendy Fallon, manager of Manpower Temporary Services Inc.’s office in Irvine, said she began seeing an increase in demand for temporary workers in early May, the first increase since last year. “Demand has been particularly strong in the high-tech and service industries, such as software and computer companies, and in insurance and banking services,” she said.
At a state employment office in Santa Ana, unemployed workers were more interested in pursuing job leads than the latest economic news. One of the more cheerful was Dean L. Hill, a computer technician who was laid off three months ago from an Irvine office equipment firm.
Hill, 35, said he had gotten an offer to start a similar job next week--and with a raise in pay.
“It got so bad that I was ready to cut off this blond ponytail if an employer wanted it off and, thank God, my new employer didn’t ask for it,” he said.
California Employment
The number of California workers employed in non-agricultural jobs continued to decline in May. The only sector that showed significant improvement from a year ago was services.
Employment in thousands Industry May, 1990 May, 1991 Percent change Mining 38.9 38.1 -2% Construction 680.2 628.3 -7.8% Manufacturing 2,193.8 2047.9 -4% Transportation, public utilities 627.2 629.2 +0.3% Trade 3,033.2 3,009.9 -0.8% Finance, insurance, real estate 845.2 845.0 -- Services 3,467.3 3,574.3 +3.1% Government 2,076.6 2,091.5 0.7%
Source: California Employment Development Department
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