Temping, but Not by Choice

California’s unemployment rate has dropped in recent months, but that’s little comfort to Melina Donalson.

The Mount Washington fashion designer has been looking for steady work since February. Unable to land a full-time position, she has taken a string of temporary assignments to make ends meet -- one of a growing number of Californians in the same predicament.

The number of state residents classified as “involuntary” part-timers, meaning they are working fewer than 35 hours a week because they can’t find full-time employment, has jumped 30% to 648,000 workers since the beginning of last year. That’s nearly 4% of those employed.

Nationally, the increase is slightly steeper, up one-third over the same period to 4.2 million workers.

It’s a sign of the times in a sluggish economy as companies keep a tight rein on labor costs, analysts say. It’s also one of several indicators showing that California’s employment climate is drearier than a falling jobless rate would suggest. Although the state’s unemployment rate dropped to 6.3% in September, down from its post-recession peak of 6.5% this summer, economists say that’s due mainly to seasonal factors and a rise in discouraged job seekers. They are no longer counted in the jobless tally because they’ve stopped looking for work.

Among the other signals pointing to the underlying weakness in the job market:

* California has lost more than 50,000 payroll jobs over the last year, and job creation is at a virtual standstill.

* The state’s unemployed are remaining jobless longer.

* The manufacturing sector has shed jobs in 19 of the last 20 months, while factory hands are working fewer hours than they did a year ago.

* Unemployment among California’s teenagers has soared to 18.2%, and joblessness among nonwhites recently hit a six-year high of 8.5%.

Analysts say California’s economy, like that of the nation, appears to be inching forward in a slow-motion recovery. The nation’s gross domestic product expanded at a 3.1% annual rate in the third quarter, the Commerce Department reported Thursday. But that growth has yet to trickle down to job seekers such as Donalson.

“I’m surprised at how hard it has been” to find a full-time job, said the 33-year-old, who has sent out dozens of resumes with no success. “Employers are being really careful now.”

Part of the reason California’s labor market appears so daunting to job hunters today is that it stands in such stark contrast to the economic boom. As recently as 2000, California employers created a record number of jobs, boosting their payrolls by nearly half a million workers.

The tech crash, a manufacturing recession and fallout from the Sept. 11 terrorist attacks brought the party to an abrupt halt. California employers, which added an average of 40,500 jobs a month in 2000, slashed an average of 2,200 jobs a month in 2001 -- and they’re still chopping.

The state has 53,600 fewer nonfarm payroll jobs than it did a year ago, and job growth is at a standstill, according to the state Employment Development Department. The jobless rate has risen from a pre-recession low of 4.7% in early 2001.

That’s downright tame compared with the early 1990s, when the collapse of aerospace and housing sucked nearly half a million jobs from the California economy and sent the state’s unemployment rate soaring to 9.7%. And unlike that period, California has performed slightly better than the U.S. over the last year, shedding 0.4% of its payroll jobs, compared with 0.7% nationwide.

But the problem for labor markets in California and the nation this time around, experts say, is that there is little driving the economy forward. Unlike previous downturns that were caused when consumers sat on their wallets, last year’s recession was the result of businesses that stopped purchasing computers and other equipment.

Capital spending has shown few signs of recovering soon, thus the continued slump in California’s high-tech and factory sectors. The Bay Area has lost 78,100, or 2.2%, of its payroll jobs over the last year, wiping out modest gains posted in the San Joaquin Valley and Southern California. The state’s manufacturing employment base, the largest in the nation, has shrunk by nearly 8% since September 2000. Factory hours and overtime are down significantly over the same period.

California’s government sector has added large numbers of jobs in recent years, mainly in education, but analysts say budget woes will hamstring that growth.

That leaves industries such as housing and retail to pick up the slack. But because those sectors held up fairly well during the downturn thanks to strong consumer spending, analysts say there’s no big rebound in the offing to significantly boost employment from here. In fact, concern now among economists is that consumers may run out of gas. A survey released this week by the Conference Board showed consumer confidence plunged to its lowest level in nine years on war jitters and worries about a stagnant job market.

“People have to have a paycheck coming in to feel all right,” said Los Angeles economist Donald H. Straszheim. “You can’t run a strong, vibrant economy without job growth. The problem is that so far this year we haven’t seen any.”

For employers, it’s a buyers’ market. Mara Klug, regional vice president of Adecco, one of the nation’s largest temporary staffing firms, said her company’s L.A.-area offices have been swamped with applications.

“Employers are being really picky because they can be,” she said. “We’re seeing talented people who have been unemployed for a while.”

Indeed, jobless Californians are searching longer for work than they have in years. Those needing 27 weeks or longer to find employment has hit a four-year high of 17.9% in September, compared with 11.7% a year ago, according to the Employment Development Department.

Others who have managed to find work, such as Donalson, are settling for part-time jobs. She left a full-time job with a children’s clothing maker two years ago, hoping to make herself more marketable through training in computer-aided design. But she has yet to reap the rewards.

Donalson signed on with 24 Seven Inc., an employment agency that specializes in placing fashion industry workers. That has resulted in a string of part-time, temporary jobs with no benefits and wages well below the $35,000 a year she was making at her old job.

Tammy Chatkin, senior vice president of 24 Seven, said apparel companies, like other employers in a sluggish economy, are looking to keep a lid on labor costs. Temporary help gives them the flexibility to ramp their payrolls up and down with the order flow.

“Employers are smart,” she said. “They are being cautious.”

The good news for workers, Chatkin said, is that temporary jobs often function as on-the-job tryouts that can lead to full-time positions. Economists have been keeping a close eye on the personnel supply sector, considered a bellwether of hiring. That sector is down 12,500 jobs compared with a year ago in California. But it is slowly creeping back, having added 5,400 jobs since the first of the year.

Los Angeles resident Lia Monroy recently interviewed for a full-time customer service position at an educational services company where she has been temping since last April.

“They are looking at their budget to see if they can add some new positions next year,” Monroy said. “I’m hoping to fill one of them.”