Golden State’s Job Scene Losing Luster

Even as the national economy slowed and the state’s energy woes began raging, California employers kept adding thousands of workers during the first few months of the year.

Those golden days for the Golden State, however, seem to be fading away.

Friday’s report that the U.S. unemployment rate climbed to 4.5% in April as the economy lost 223,000 jobs probably means that California’s employment market will soften too, analysts said. The U.S. jobless rate rose from 4.3% in March.

In Southern California and throughout the state, “You’re going to see unemployment over the next few months following the national trend,” said Jack Kyser, chief economist for the Los Angeles County Economic Development Corp.

The April employment report for California won’t be released until next week. But analysts pointed to the statistics for March, which showed the state’s jobless rate rising to 4.7% from 4.5% in February, as a clue to what lies ahead.

The shift already is apparent to Sue Foigelman, an area manager overseeing Los Angeles and Orange counties for Manpower Staffing Services. She said the company’s customers continue to ask for temporary workers, but, particularly when it comes to production-related businesses, the duration of the jobs is getting shorter.

Until recently, she said, a typical customer would ask for 10 production workers for two or three months. “Now, they are saying 10 people, but maybe for a week,” Foigelman said. She added that factory owners “don’t have the confidence that the inventory is going to be moved,” a far cry from last year when, Foigelman said, the attitude was gung-ho.

The state’s leading business forecasters don’t expect California to fall into a recession--in other words, they don’t anticipate that the state’s job total will shrink over a sustained period. But the forecasters predict that the unemployment rate will continue to rise. The reason: California’s pace of employment growth will be too slow to provide work for all the young job hunters and migrants to the state who enter the labor market.

In fact, predictions due out Thursday from the Cal State Long Beach Economic Forecast Project will revise downward the group’s outlook for job growth in Southern California.

Lisa M. Grobar, forecast project director, expects that job growth in Los Angeles County will fall from 2% last year to slightly less than the 1.7% her group forecast last fall.

Grobar said such factors as the national economic slowdown, rising energy costs, the likelihood of more power blackouts and reduced technology spending will hurt California, even though the state has continued to avoid slowing down as much as the rest of the country.

Most of California’s major announced layoffs have been in the Bay Area, where technology companies large and small have been cutting thousands of workers. In Southern California, the biggest bombshell came from Walt Disney Co., which announced in late March that it plans to cut 4,000 jobs.

One rough measure of the statewide picture comes from a layoff report by Challenger, Gray & Christmas Inc., a large Chicago-based outplacement firm. The company, which tracks layoff announcements, said California-based companies have accounted for 90,516, or nearly 16%, of the record-high 572,730 job cuts announced by U.S. firms this year. California accounts for 12% of the nation’s population.

Not everyone in California is feeling the pinch. Adell Scheele, director of the Cal State Northridge Career Center, said demand for the school’s graduates is brisk.

“Our employers are still recruiting in the same numbers,” she said, citing job offers for computer science majors, teachers, accountants and liberal arts students. “We have not seen any change at all,” she said.

Analysts say Southern California, which was slow to recover from its severe recession in the early 1990s, has a more diversified economy that has made the area less likely to succumb to a downturn. The aerospace industry, which was devastated in the 1990s, is stable and is expected to benefit from shifting spending priorities in Washington. Still, in what may be a telling sign, some of the firms and workers faring the best are those specializing in business belt-tightening. That’s the case at Baarns Consulting Group Inc. in Sylmar, which coaches companies on how to use technology to cut costs.

Donald Baarns, president of the company, said he hopes to add two employees to his 10-person staff.

In his field, Baarns said, “it depends on who your client base is. If you had dot-com start-ups, then you’re having a rough time, but companies in different sectors are still utilizing technology, especially when they are looking to cut costs.”

John Graff, a 36-year-old Santa Monica resident who was let go in late February by a company that produces commercials, music videos and films, is taking a similar tack.

He’s now working as a consultant, helping companies handle--what else?--downsizing. “It’s strange,” Graff said, referring to the irony of a downsizing victim becoming a downsizing consultant. Still, he said, as far as his own business goes, “it’s turning into a great thing.”

*

* UNEMPLOYMENT RISING

Corporate America shed more jobs last month than at any time in the last decade, the government reported. A1

(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)

California and U.S. Jobless Rates

The unemployment rate for California is expected to mirror the U.S. trend in coming months.

U.S., April: 4.5%

California, March: 4.7%

Source: Calif. Employment Development Dept.