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
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-
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!”