Break out the bubbly. California’s unemployment rate plummeted to 11.7 percent in October (down from 11.9 the prior month). If national stats for November are any indication, the Golden State may approach 11 percent by Christmas. But before the party gets too euphoric, some Grinchly accounting is in order.
First, it’s worth noting that only Nevada’s October unemployment rate (13.4) exceeds that of California. Then there are the numbers for Riverside County (13.7), which surpass even the unlucky figure posted by Nevada.
The really bad news comes when one scrutinizes long-term trends. A study commissioned by “City Journal” found that California’s employment picture had become “far less vibrant and diverse” even before the recent recession. Below are some grim statistics:
From 1992 to 2000 California experienced dynamic growth in business start-ups, especially in Silicon Valley. A total of 776,500 net jobs were created when start-ups are offset with closures. By contrast, the state suffered a net loss of over 250,000 jobs in the same category over the next eight years—a difference of over a million jobs. In short, even before the 2008 recession, California had stopped attracting new business investment.
Job production in large metropolitan regions also plummeted when compared with the prior eight-year period. Specifically, from 1992 to 2000 the Los Angeles and San Francisco Bay areas added over 1.1 million new jobs. Yet from 2000 to 2008 these areas (including Orange County and Silicon Valley) created fewer than 70,000 new jobs.
In addition, the jobs created in California from 2000 to 2008 generally paid much less than those created earlier. From 1992 to 2000 almost 909,000 net jobs were created in high-paying industries. That lofty figure fell to a negative 270,000 during the next eight years.
The bright spot for good jobs from 2000 to 2008 was in housing and construction—sectors now moribund after the real estate bubble burst.
The lion’s share of jobs created in California from 2000 to 2008 was in the generally low-paying “administration and support” category. This fact corresponds with the study’s finding that employment growth was confined largely to jobs paying between 50 and 75 percent of the state average.
A final fly in the bubbly concerns the dramatic reduction in jobs with firms having over 100 employees. That number dropped from a positive 564,000 in 1992-2000 to a negative 685,000 over the next eight years.
The primary culprits behind these Scrooge-like figures, according to various analysts, are “suffocating regulations…and a political class uninterested in business concerns, if not downright hostile to them.”
Put briefly, Sacramento is too much in tune with the Occupy movement.