O.C.’s Jobless Rate Hits 5.6%, an 8-Year High
Fueled by recession-driven layoffs and business closings, Orange County’s jobless rate hit an eight-year high in February of 5.6%.
And if that isn’t enough, the state agency tracking local employment announced that it had underestimated job losses in the county by nearly 50,000 in 1991 and said an additional 33,300 jobs were slashed from county payrolls in the first two months of 1992.
“All last year people kept saying the recession was really hurting them, but we statisticians said it wasn’t as bad as in 1981-82 because the job losses weren’t too bad,” said Esmael Adibi, director of the Chapman University Center for Economic Research.
“Well, the new numbers show that the people were right.”
One reason the monthly estimates were so far off the mark last year is that the state Employment Development Department, which publishes the wage and salary employment statistics, doesn’t survey many small businesses for its monthly estimates, said David Brownstone, an economist at UC Irvine.
But small businesses often are hit harder by recession than large ones, and this was reflected in the annual revision, which is based on more complete reports from the county’s employers, he said.
The Orange County jobless rate jumped to 5.6%--the highest rate since 1984--from January’s 5.4%, with an estimated 76,700 county residents now out of work. In February of 1991, the county’s unemployment rate was 4.8%.
While the month-to-month increase was only two-tenths of a percentage point, February’s number was the first time unemployment in Orange County has been this high since the last recession.
The jarring new numbers released Tuesday not only show that the recession has been a lot worse in Orange County than the pundits once thought, but that recovery will take a bit longer than previously expected.
Still, economists say the revised numbers are not cause for worry.
The underlying reality hasn’t changed--the statisticians just have a better idea now of what it was, said Anil Puri, chairman of the Cal State Fullerton economics department.
And despite the huge job losses and large number of people out of work for the first two months of 1992, things really are expected to improve later this year, economists say.
Chapman University economists, for instance, still expect a local recovery to begin late in the third quarter with a net increase of 10,000 jobs in the county this year.
The jobs Adibi expects to be created would have almost erased the 1991 job losses as originally reported. But it will take nearly five years at 10,000 new jobs annually to make up for the 45,600 jobs now thought to have been cut from county-based payrolls in 1991.
The job tally measures the number of jobs at businesses located in Orange County, while the jobless rate gauges the percentage of county residents who are out of work--regardless of where the jobs were held.
The revised job tally is the result of an annual rejuggling of monthly employment estimates--a process called setting a bench mark--that enables Employment Development Department analysts to take advantage of more accurate data collected from employers.
According to Eleanor Jordan, the department’s Orange County labor market analyst, the total number of non-agricultural jobs in the county in February dropped to 1.124 million, the lowest total since the 1.123 million of March, 1988.
Since the recession began in July, 1990, the county has lost a total of 89,600 jobs--most of the casualties occurring in the construction, manufacturing, retailing and service industries.
“The numbers now show that the recession still is in full force in Orange County,” Puri said. “But there are no changes in the trends established last year. No new areas of job loss.”
Puri is co-author of a recent report that argued that the current recession has had a tremendous impact on Orange County despite the much lower unemployment rates of the 1990s--February’s 5.6%, for example, pales in comparison to the 7% to 9.4% rates recorded in 1982 and 1983 at the height of the last recession.
The reason the unemployment rates are lower, he points out, is that the county’s total labor pool has increased substantially in the past decade, watering down the impact of the job losses experienced in the past 20 months.
“But when I look to see where the job losses are, the reports confirm our report that the service sector has failed this time to make up for the losses in construction and manufacturing, as happened in the last recession,” Puri said.
The state’s February wage and salary report for Orange County shows that there were 29,500 fewer full- and part-time jobs than a year earlier, for a 2.7% annual rate of decline.
The biggest losses were in manufacturing, down 9,500 jobs for a 4% drop over the 12 months; construction, down 8,500 jobs for a 16% decline; retail trade, down 8,600 jobs for a 4.2% decline, and finance, insurance and real estate.
Gauging Recession’s Impact
Adjusted figures show that the number of jobs at companies in Orange County dropped 7.4% from June, 1990, to February, a net loss of 89,600 jobs. The department had previously underestimated the number of jobs lost by more than 50,000. O.C. Unemployment* 1992: 5.6% O.C. Jobs Lost** 1992: 7.4% * Unemployment figures indicate the percentage of unemployed county residents, some of whom worked at jobs outside the county.
** The jobs lost figure represents the loss of jobs at county companies relative to June, 1990, the last month before the recession. Some of the jobs lost were held by residents of other counties.
Source: California Employment Development Department
