State Job Growth Picks Up Steam

The pace of job growth in California quickened last month, the latest sign that the state’s economic comeback was gaining momentum. But new hiring continued to be far weaker than in past recoveries and did not slow an increase in long-term joblessness.

A government report Friday showed that employers statewide added a net 22,200 nonfarm jobs in January across a wide range of industries. That was the most since October and accounted for one-fifth of the nation’s job growth last month.

“It’s great to get a number like 22,000. If we can string together some of those, we’ll be in business,” said Howard Roth, chief economist at the state Department of Finance. “It’s a good start for 2004.”

Roth and other economists also were encouraged by the state’s annual revision of jobs statistics. That report, also released Friday by the state Employment Development Department, painted a brighter picture for 2003, especially in Orange and San Diego counties. The new figures showed that hiring overall picked up steam in the second half of last year, instead of weakening as previously estimated.

That “provides a little more confirmation that the California economy is beginning to turn around,” said Steven Cochrane, who tracks the Western United States for research firm Economy.com.

Analysts attribute the accelerating job recovery to a variety of factors, including growing demand for a host of California products including computers and cotton. The state’s rising population also is fueling demand for services such as education, healthcare and retail. The housing market remains strong, also sparking consumer spending.

The statewide jobless rate fell in January to a seasonally adjusted rate of 6.1% from 6.5% in December. But analysts said the magnitude of the decline probably was overstated because of statistical adjustments and other factors.

The U.S. unemployment rate also dropped last month, to 5.6% from 5.7%. The difference between the California and U.S. jobless figures now stands at half a percentage point, one of the smallest in recent memory.

The wider the gap, the more likely that Californians will seek opportunities elsewhere. And before Friday’s report of revised data, it looked like the state’s job market was worsening while the nation’s was improving.

Previous reports based on a sample of employers said the state had been shedding an average of 2,000 jobs a month since July. But after honing those initial estimates with payroll tax filings, officials found that California employers actually had added on average 8,700 jobs a month from July to January. That pace of growth is consistent with increases seen nationwide.

At the same time, the revisions showed that California’s jobs downturn, which began in the spring of 2001, was much deeper in the first half of 2003, with significantly more manufacturing losses than once thought. Based on the new figures, the state lost a total of 55,600 jobs in 2003 -- more than double the amount previously estimated.

Almost all of the bigger losses were in the Bay Area. The new data indicated that Oakland lost 15,000 jobs last year, not 600 as previously estimated. And payroll losses in the San Francisco metropolitan area for 2003 were revised upward to 34,000 from 19,000.

It was the reverse in Southern California, except for Los Angeles County, which performed a little worse than previously estimated. The biggest surprise was Orange County, which had been depicted as having no job growth in 2003. But the annual revisions -- which pick up more start-ups and hiring by smaller firms -- found that the county added about 22,000 jobs last year. There were also substantial increases for the Inland Empire and San Diego County.

“The action’s in Southern California,” Cochrane said.

Nonetheless, economists were cautious about the hiring outlook throughout the state. Many employers, they said, remain skittish about expanding payrolls, focusing instead on raising productivity of existing workers. Also, many firms are holding back because of the uncertainties of the state budget.

Many workers up and down the state say they have yet to see a meaningful breakthrough in hiring. Friday’s report showed that the percentage of Californians out of work for six months or more rose to 23.9% -- the highest in at least six years.

Greg Griffin is one of them. Formerly a project manager for a technology firm, the Venice resident hasn’t worked full time since October 2002. With his unemployment benefits and savings exhausted, Griffin, who once made a six-figure salary, said he was girding himself to take just about any job available.

“Whether it’s working at Best Buy or bagging groceries, I don’t care,” said Griffin, 37. “The mental aspects of being out of work for as long as I have been are starting to prey on my mind.”

So-called underemployment is also a growing concern. The state still isn’t replicating the lucrative technology and manufacturing jobs it lost during the recession in any significant numbers, while the jobs being created are in lower-paying industries such as retail and tourism. In January, manufacturing continued to lose jobs, although at a slower pace, while there were big gains in the hospitality and leisure industry.

Marielle Smith is an example of the underemployed. After she was laid off from her job at a historical archive after 9/11, the South Pasadena resident was unemployed for two years before landing a clerical position at a nonprofit organization.

Her current post pays $12 an hour -- about half what she made at her old job.

Smith, 38, who his working on a master’s degree in library and information science, said that “when people with college degrees have to resort to taking jobs as Wal-Mart cashiers and the like, it is most definitely not a recovery.”