S.D. Jobless Rate Hits 7.9%; No Relief Seen

SAN DIEGO COUNTY BUSINESS EDITOR

The lingering recession and deepening defense industry cuts combined to push up San Diego County's unemployment rate to 7.9% in August, the second-highest monthly rate in nine years. Nearly 100,000 local residents are now out of jobs.

The worst is yet to come, said Valerie A. Ramey, a UC San Diego assistant professor of economics. She sees a "further trend of defense cutbacks . . . that's going to continue for a while. So I would not be surprised to see the unemployment rate increase for several more months."

Major aerospace and defense employers in the area, including Rohr, General Dynamics and Hughes Aircraft, have all said in recent weeks that they expect to lay off thousands more employees over the next two years on top of the legions of jobs they have already cut.

Aerospace layoffs plus the slowdown in construction, manufacturing and retail job sectors over the two-year recession have shrunk San Diego's employment base, according to figures released Friday by the state Employment Development Department.

Total non-agricultural jobs in the county were 947,700 in August. That's a loss of more than 52,000 jobs from the county's 1-million-job peak in December, 1990.

San Diego's economy is not as defense-dependent as other California counties. But the aerospace cuts will be painful because they will mean the loss of established, relatively well-paid jobs with strong local identities. And with the end of the Cold War, there is little prospect that the jobs will come back when the economy improves.

Joblessness will be "solved painfully" as many unemployed workers leave the state "for better prospects elsewhere," said Ross Starr, an economics professor at UC San Diego. Like his colleague, Starr sees little prospect for economic improvement in San Diego County until mid-1993.

"The high unemployment rate reflects the fact that the California and San Diego economies are represented in two areas that are weak in the 1990s: commercial real estate construction and defense-aerospace," Starr said. "California is feeling the business contraction much more painfully than the rest of the country."

San Diego County's August jobless rate increased from July's 7.3% unemployment level and from the 5.9% rate in August, 1991. The most recent figure is only slightly under the 8.1% unemployment of June, which was the highest unemployment rate seen locally in nine years.

The county's construction jobs in August totaled 47,100 jobs, down from 51,700 a year previous. At its peak in the late 1980s, the local construction industry employed more than 60,000 people.

Also in sharp decline are manufacturing jobs, which in August totaled 125,100 in the county, down by more than 8,000 jobs from the 133,800 total in August, 1991.

The local home building industry remains moribund despite the lowest mortgage rates in nearly two decades. That's a depressing factor because healthy levels of residential and commercial building create jobs in related service and supply companies.

Of small consolation to those standing in unemployment lines is that San Diego County's jobless rate is still under the 9.5% rate for all of California, which was up from 9.3% in July and from 7.2% in August, 1991.

Joe Drew, a research analyst with the San Diego State University Center for Public Economics, is pessimistic about the near-term prospects for an economic recovery.

"Manufacturing is dead in the water and construction and housing permits show no sign of any strength," Drew said. "The consumer isn't involved in the economy at all. I don't know if everyone is waiting for the election to end or what."

Drew said the decline of migration of out-of-state residents into San Diego County has particularly hurt the local retail and wholesale trade sector. A slower flow of new residents means fewer consumers buying durable goods such as appliances, beds and other furniture.

Over the last 12 months, more than 7,400 jobs in the county's stores and warehouses have evaporated, reducing total jobs in that sector to 223,800.

Jobless Rate Up

San Diego County's 7.9% August jobless rate is just slightly under the 8.1% unemployment of June--the highest unemployment rate seen locally in nine years. The rate last August was 5.9%.

Source: State Employment Development Dept.

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