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THE TIMES POLL : 50% Agree State Suffering From a Serious Recession

TIMES STAFF WRITER

Economic shock waves have seriously shaken the California public, with one out of two adult residents now agreeing the state is suffering a serious recession, a view that is notably gloomier than that of Americans nationwide, according to a new Los Angeles Times Poll.

Underlying the growing political concerns is the weak state economy--and the equally frail public expectations that now surround it. Last August, for example, just 30% of Southern Californians described the recession as “serious.” The results were the same in a national poll conducted a few weeks ago.

But in the new poll of Californians statewide, 50% overall--including 48% in Southern California--said the slump was a major one. Nine out of 10 agreed that a recession of some intensity was in progress, unchanged from the level of the last several months. In addition, there is growing concern that the situation will deteriorate in the next three months.

“You’re just seeing a continuous trend downward,” said John Brennan, director of The Times Poll, of the bleak finding.

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In some ways, the perception of distress may be worse than the reality. Californians appear no more likely than other Americans to report shaky personal finances (32% in California compared to 36% in a November national survey). Moreover, 68% of the state’s residents described the finances of their own households as secure, a finding that has remained stable for months.

Yet other gauges suggest that the worried public attitudes reflect surprisingly severe conditions in the workplace.

Between November, 1990, and November, 1991, California lost 508,000 jobs, 4% of the state’s total, according to preliminary figures from the state Department of Finance. UCLA economists project a 3.2% decline in the job rolls for 1991--a loss of 423,000 jobs--an astounding drop for a state that was an economic powerhouse for much of the 1980s.

“If these numbers hold up, they will be the most serious one-year drop in employment in California since 1945,” said David G. Hensley, director of the UCLA Business Forecasting Project.

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Negative expectations, meanwhile, are rising: 32% of those surveyed said the state’s overall economy would continue to weaken in the next few months. By comparison, a May Times Poll of Californians found just 21% anticipating a deterioration.

Already, 36% say someone in their household has experienced some sort of work cutback within the past year, with 14% reporting a firing and 8% reporting a reduction in hours. Of this group, 13% attributed the loss to a decision by their employer to relocate outside California.

And in a time when economists are avidly watching consumer behavior, more than half of the respondents--56%--said they will spend less on holiday gifts than last year; 12% said they would spend more.

The poll detected no clear variations in attitude by region, or by profession.

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At the same time, the poll demonstrated some obvious differences of opinion. Among people over 65, 60% perceived a serious slump; the figure was just 35% for Californians aged 18 to 24.

And while half of Anglos and Latinos agreed the recession was a bad one, the figure for blacks was a more pessimistic 58%. Different outlooks were also detected along political lines: 62% of registered Democrats described the slump as serious, compared to just 43% of Republicans.

The Times Poll of 1,629 California adults was conducted from Dec. 7 to Dec. 10. The general findings are considered accurate within a range of plus or minus three percentage points, although the margin of error is higher for subgroups, such as women or minorities.

The downbeat findings were not limited to narrow definitions of economic well-being. More broadly, 40% of Californians said the quality of life in their communities was getting worse, with just 9% saying it was improving.

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A nationwide Times Poll in late September seemed to detect a somewhat rosier view outside California: Only 22% of Americans overall--half the percentage of the new poll--said that the quality of life in their hometowns was deteriorating. Still, when all factors were considered, just 15% rated California’s quality of life below average and 74% said they were satisfied with their communities, compared to 79% of Americans.

“The bad economy seems to be contributing to a sense that quality of life in general is on the decline,” Brennan pointed out. “But a lot of people still like living in California.”

The poll findings come in the wake of a flurry of dispiriting news, in which the economy has emerged as perhaps the major issue of the coming presidential election.

Many economists say the Federal Reserve Board should cut interest rates further to stave off continued economic decline, and on Thursday, White House spokesman Marlin Fitzwater said President Bush--his popularity hurt by unemployment and other economic woes--may unveil new proposals to boost the economy before his State of the Union address in late January.

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At the state level, the economy also is jumping out as a political issue.

The economy was widely cited as the state’s worst problem. In an early October Times Poll, just 8% of Californians declared it so.

These worries overshadow most other state issues, with only 9% saying crime is their chief concern and 6% pointing to education, which were far bigger concerns in the earlier poll.

“It’s an extraordinary time for the state,” said Hensley, noting how the economic weakness has added a sense of urgency to a range of policy issues in Sacramento.

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Among them is the matter of regulation. Many business executives and sympathetic politicians contend that it has become too costly to operate in California, and that the multilayered bureaucracy is prompting employers to leave or expand elsewhere.

The new survey depicts wide divisions among the public on how to respond to this apparent dilemma, with such factors as ideology, political affiliation and race seeming to play a major role in people’s attitudes.

Overall, about 38% say the state imposes too much regulation on business and industry--while 24% say it should do more and 21% maintaining that the current level of bureaucracy is about right.

But asked if they would support a cutback in environmental rules in order to preserve jobs, 50% said they would approve of such an easing of regulation; 39% said they would not.

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Among blacks, 68% said they would limit regulation in order to protect jobs; 58% of Latinos agreed. Among Anglos surveyed, however, just 47% said they would cut back on environmental protections to preserve jobs.

Blue-collar workers and those who described themselves as Republicans or conservatives all expressed above-average willingness to ease regulations as a trade-off for protecting jobs. By contrast, those who described themselves as Democrats, liberals and white-collar workers all were less willing to trim the rules in order to encourage job growth.

In the view of many surveyed, the economy’s lingering malaise is not about to fade away any time soon.

Asked if unemployment would be worse in three months, 40% agreed that it would, while 42% statewide (and 39% in Southern California) said it would stay the same; 14% in the most recent survey predicted an improvement. That’s a decline in optimism from last August, when a Southern California poll found that just 26% expected joblessness to get worse, with 51% foreseeing more of the same and 18% anticipating an upturn.

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