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Can You Spare A Job, Bud?

by Susannah Kopecky, published

Recently speaking with my father, the topic of California's unemployment came up. Trying to estimate the number of unemployed (this was before the official statistics came out), he used this formula: say there are about 30 million residents of California. Approximate that about 20 million are of the working age (18-65), and of those, say that about 15 million choose to work. If the unemployment rate is at 10%, this should equate to somewhere around 1.5 million unemployed.

The next day, the newspaper headline read something like this: "1.8 Million Unemployed in California." Two things jumped out at me: firstly, the awesome estimation, and secondly, the thought there are nearly 2 million people who want to work, and don't have jobs.

In California, things may look grim on the outside. On top of a more-than $40 billion budget shortfall and the so-serious-a-state-of-emergency-has-been-called water situation, the jobless rate of the Golden State has hit the double digits: 10.1 percent, to be precise. Keep in mind that the national unemployment rate is 7.6percent.

According to the Employment Development Department of the State of California, in tandem with the U.S. Bureau of Labor Statistics, by January 2009, the 10.1 percent (subject to fluctuation) unemployment rate was joined by news of an additional decline of 79,300 "nonfarm payroll jobs" during the month of January as well. The EDD measured a decline of between 437,000-494,00 jobs from the 12 month period stretching from January 2008 to January 2009.

Los Angeles alone accounts for more than 500,000 of the unemployed workers.

According to the EDD, by January 2009, somewhere between 1,689,000 and 1,863,000 Californians have been designated as unemployed. (These are people who choose to be in the active work force.) Compare this to January 2008, in which approximately 1,109,000 Californian workers were out of a job and actively searching for a replacement. The entire California "civilian labor force" is estimated to be between 18,551,000 and 18,557,000.

The report estimates that, according to a federally-run survey of Californian workers, there are 16,668,000 Californians who currently hold at least one job. The survey estimates that the number of workers currently unemployed, is more than 750,000 people that were listed as being unemployed in January 2008. Just under one million of those listed as unemployed (990,600) were fired from their jobs.

Of the good news on the employment front, there is an interesting pattern. Of the four "categories" of jobs that have actually expanded their employee bases by a total of 43,000 jobs in the last year, there is a strong correlation with tax-payer funding: Natural Resources and Mining, Educational and Health Services, Leisure and Hospitality, and Government.

Unfortunately, the seven other categories, which have lost, together, about 537,000 jobs over the last 12 months, including Construction, Manufacturing, Trade, Transportation an Utilities, Financial Activities, Information and Professional and Business Services. The Non-Agricultural Wage and Salary Workers classifications post the highest payroll employment rates (total of $14,724,400), followed by the industry groupings of Trade, Transportation and Utilities (total of $2,767,000) and Government (total of $2,515,200).

The data tell us that right now, industries most likely more supported by government funding are already experiencing a bounce, or rather, something of a shield, from the current economic situation. Perhaps this can help explain how the California budget ballooned more than $40 billion over current financial reserves. In an ironic twist, the very government that has spent irresponsibly to a massive budget shortfall, is the very same organization supporting the majority of the few areas in which unemployment has not hit hard. There is a joke now, that with the economic woe affecting the nation and the housing markets under a crunch, there is one city that is booming and enticing with a plethora of new jobs: Washington, D.C. The very same budget crunch that forces further governmental spending and less private-sector spending, is the very engine supporting a select network of jobs within its sphere of influence.

As Sir Walter Scott once penned, "Oh what a tangled web we weave, when first we practice to deceive!"

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