California unemployment falls to 11.1% as payrolls grow


California’s jobless rate dropped again in December and payrolls increased for a fifth straight month, boosting hopes that the state’s economic recovery is showing some staying power.

The unemployment rate fell to 11.1% in December from 11.3%, the Employment Development Department reported Friday. Employers added 10,700 workers to their payrolls last month on top of a revised 24,700 in November.

For the year, California added 240,300 net jobs across a wide swath of the economy, including key white-collar industries such as business and professional services and information. Even the hard-hit construction sector added workers.


Economists called those widespread and consistent job gains a good sign for the labor market.

“The recovery has legs,” said Howard Roth, chief economist at the California Department of Finance. “It’s steady, and I think it’s going to stick.”

However, California’s unemployment rate remains well above the national jobless rate, which was 8.5% in December. More than 2 million workers are still jobless. And payroll employment is still 825,000 jobs below its January 2008 peak.

“It’s still going to take years, not months, to get back to normal,” said Robert Kleinhenz, chief economist at the Los Angeles County Economic Development Corp. Still, there were several bright spots.

California’s strongest job growth in 2011 came in the information sector, which expanded by 5.3%, or 23,300 jobs. Many of those jobs are well-paying positions in television and film production, telecommunications and Internet-related companies.

Business and professional services grew by 3%, or 63,500 jobs, in fields including banking, accounting and real estate. The long-beleaguered construction industry added 21,300 jobs, a growth of 3.9%.


“The instinct I’m having is the recovery is finally starting to be real,” said economist John Husing, a specialist in the Inland Empire, which was hammered by the housing downturn.

December unemployment in Los Angeles County was 11.8%, down from 11.9% in November.

Monthly joblessness also fell across Southern California: to 11.9% from 12.1% in San Bernardino County, to 12.5% from 12.8% in Riverside County, to 7.8% from 8.1% in Orange County and to 9.4% from 9.5% in Ventura County.

A separate survey of California households reflected an improving job market, as workers unable to find a traditional job are creating their own. Total employment in California swelled 9.5% in the last 12 months. That’s a sign that more jobless workers are starting small businesses or becoming independent contractors.

“Increasing numbers of Californians are saying they have been finding opportunities to earn pay, and that indicates economic activity in the state is on an upswing,” said Paul Wessen, an EDD labor economist.

Self-employment is often the only option for workers with limited education and skills, suggested Christopher Thornberg, principal at Beacon Economics, a Los Angeles consultancy.

“They’re struggling, trying to get ahead,” he said. “For every guy we see selling fruit on the corner somewhere, there’s another guy working as a DJ doing sweet 16 parties and probably making a good dime.”


That entrepreneurial spirit is very Californian. “It’s healthy,” said economist Jerry Nickelsburg with the UCLA Forecast. “People stop looking for others to provide jobs and start using their own creativity.”

But this surge of self-employment also underscores fraying job security and declining wages and benefits in many industries. Some hard-pressed employers are shedding full-time workers and hiring independent contractors to do the same jobs for lower pay.

“Lots of companies lay off people and then try to use them as contractors and freelancers to avoid paying retirement, healthcare, workers’ comp or unemployment,” said Esmael Adibi, an economist with Chapman University in Orange.

Inglewood resident Joseph Shipley said he has to hustle as an independent contractor selling flooring. “These days it takes three or four retailers to generate the kind of income I need. And it’s getting worse,” he said.