Firms Cut 21,000 Jobs in State

California’s unemployment rate climbed to a nearly three-year high of 5.7% last month, as businesses around the state slashed 21,000 jobs, officials reported Friday.

The employment report reflected job losses endured in the aftermath of the Sept. 11 terrorist attacks, along with the state’s slump in high-tech and other manufacturing and services industries.

California’s worst economic damage appeared to be in the Bay Area, which relies heavily on technology spending. Although joblessness rose in Los Angeles and Orange counties too, unemployment was relatively stable or improved elsewhere in Southern California.

All told, economists said, the latest figures show that California has yet to suffer as severely as other parts of the country. The federal government reported a week ago that the nation lost 439,000 private-sector jobs in October. Even taking a gain in government employment into account, the overall decline was 415,000, the worst in 21 years.

“We’re seeing a moderate recession” in California, said Brad Williams, economist for the state legislative analyst’s office. “We’re not seeing evidence of a meltdown or a major retrenchment.”

Still, California’s unemployment rate rose from 5.4% in September. It has been edging up since hitting a 32-year low of 4.5% in February.

The only big gain in employment came in government, but Williams and other analysts said that could be a statistical quirk. Even including the reported addition of 16,700 government jobs, California had a net loss of 4,300 jobs in October.

In Los Angeles County, the jobless rate rose to 5.9% in October, up from 5.7% the month before and its worst level since April 1999, when it was 6%. The continuing slump in Hollywood production appeared to be one of the major factors, along with the declines in manufacturing, travel-related industries and other services that are hurting in much of the state.

Yet for the first time since the state started keeping employment records in their current form in 1983, joblessness was higher in San Francisco than in Los Angeles.

San Francisco’s unemployment rate was 6% in October, up from 5.7% the month before.

That turnabout reflected part of a north-south divide in the state economy. The Bay Area, which soared during the high-tech boom of the last several years, is now taking the brunt of the downturn.

Southern California still has more poverty and lower incomes, but the region’s economy, after being devastated by aerospace cutbacks in the early 1990s, has become more stable and diversified.

In big urban areas around the state, travel-related industries have taken a pounding following the terrorist attacks. The air transportation category showed a loss of 4,300 jobs, and hotels were down 3,500.

That was evident at a job fair near Los Angeles International Airport this week that attracted more than 1,000 job seekers.

Among them was Carlos Brito, recently laid off from his United Airlines customer service job. An 18-year airline industry veteran, he has been laid off before, only to be hired back in better times. But the suddenness and severity of this contraction surprised even the upbeat Brito.

“I’ve never really seen it this bad,” said the 52-year-old Anaheim resident, filling out an application to become an MTA bus driver.

Workers in other industries are suffering, too.

North Hollywood resident Deyanira Garcia lost her job at a credit reporting agency in mid-September and has looked frantically for work ever since.

She visits two private job placement agencies and the Verdugo Job Center in Glendale every day. After she puts her four children to bed, Garcia, a single mother, scours the Internet for jobs on her home computer. She has sent out more than 50 resumes so far without success.

“This is the longest I’ve ever been unemployed,” Garcia said. “It’s very hard.”

Garcia is looking for an administrative or office position that pays at least the $14 an hour she made at her last job. In the meantime, she is struggling to get by on the $422 unemployment check she gets every two weeks.

“There aren’t that many jobs in my wage range,” said Garcia, who turns 31 today. “I can take a job for $10 an hour, but I won’t make it.”

Among manufacturing workers, the situation is particularly grim. Friday’s employment report showed the sector losing 10,900 jobs in October, the biggest drop of any category.

North Hollywood garment contractor Victor Tankazyan says 30 to 45 people a day show up at his shop, hungry for minimum-wage sewing work. Mostly immigrant Latinos, some have lost their jobs in other sewing factories. Others are returning to the industry after leaving it for better-paying employment in hotels and restaurants--jobs that have suddenly evaporated.

“It has really gotten worse in the last three weeks,” Tankazyan said. “Everybody is looking for work.”

Friday’s employment report, one of the most closely watched gauges of the state economy, follows a wave of other downbeat indicators. Recent reports have shown that California’s personal income tax receipts were down 7.6% last month from the October 2000 level.

In addition, foreign exports and construction have slumped, and the most recent figures on initial claims for unemployment benefits are up 35.3% compared with a year earlier.

The downturn, coupled with concerns about the aftermath of Sept. 11, has led recently to various state and local task forces and conferences to look for ways to rejuvenate the economy.

State officials also are wrestling with how to plug a budget deficit estimated to be as big as $14 billion that largely stems from the economic slump.

Friday’s job figures show a dramatic contrast from last year, when the state was booming. Over the first 10 months of this year, California has gained only 20,300 jobs. During the same period in 2000, the job total soared by 471,300.

California’s jobless rate, at 5.7%, is at its highest level since December 1998 when the level was 5.8% but still not as high as the 9.7% rate during the recession of the early 1990s.

Although the state’s rural areas don’t appear to have been hurt by the overall recent slowdown as severely as California’s major cities, they continue to post the highest unemployment in the state.

The eight-county San Joaquin Valley area posted a jobless rate of 10.2% in October, up from 9% the month before but down from 10.9% a year earlier. The jobless figures for California and Los Angeles are adjusted to filter out the effects of seasonal trends, but no such revisions are made to the figures for other urban or rural parts of the state.

Among blacks, unemployment was 8.2% in October, up from 8% the month before. Among Latinos, joblessness last month was 6.9%, up from 6.7% in September. For whites, unemployment last month was 4.8%, up from 4.7%.

In Orange County, joblessness was 3.4%, up from 3.2% the month before. The county’s rate was the highest since September 1997, when it also was 3.4%.

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Times staff writer Lisa Girion contributed to this report.