California joblessness now third in nation
posted at 9:00 am on November 22, 2008 by Ed Morrissey
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To no one’s great surprise, California joblessness has increased to 8.2%, and most economists figure it will get even worse in the months to come. The state now ranks third in the nation for unemployment, thanks to over 100,000 job losses in the last year:
California’s unemployment rate soared to a 14-year high in October, hitting 8.2%, and economists predicted that it could rise substantially over the next year and a half.
The state’s economy shed 26,400 people from its payroll last month, raising the total number of lost jobs to 101,300 since October 2007, the California Employment Development Department reported Friday.
And the situation is about to get worse, predicted Ross DeVol, director of regional economics at the Santa Monica-based Milken Institute. The unemployment rate is seen reaching 9.9% in the first quarter of 2010, with the loss of 360,000 more jobs before then.
The hemorrhaging of jobs is “another indication that the state is plunging into what is likely to be a long and deep recession,” said Stephen Levy, chief economist and director of the Center for the Continuing Study of the California Economy in Palo Alto.
Unemployment rose for the nation as a whole, so an increase in the percentage for any state won’t shock anyone. However, California’s high rate only got surpassed by Michigan and Rhode Island in October. The number of people unemployed in California has risen by almost 50% over October of last year. Their unemployment fund was in “crisis” last month because of the rapid expansion of the unemployed, meaning that the state will have to borrow even more funds to pay its entitlement obligations.
Why do economists expect it to get worse? California’s warm climate may attract hundreds of thousands to visit each year, but its business climate keeps getting colder and colder. The state already has the sixth-highest tax burden per capita among states, and the state government has already proposed a tax increase to combat a shortfall this year. The LAT article states that this is a “consumption” recession, meaning that uncertaintly has stopped consumer spending. A sales-tax increase to over 9% will only make that worse.
California, and the federal government, both propose to raise taxes in a recession. That’s a recipe for disaster, and in California’s case, more capital flight to warmer business climates in other states. Both need to start curtailing spending and provide tax relief to stimulate business and job growth. Otherwise, California will return to the Jimmy Carter era, and sooner than we expected.
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High personal and corporate taxes sent the jobs out of state or to China. When will they wake up?
DL13 on November 22, 2008 at 2:20 PM
When I moved, and moved our businesses out of California, everyone said I was nuts…”What’s in North Carolina”, they said…
Beautiful weather, beautiful scenery, beautiful people, and they love business…taxes, fairly low, corportate fees, very low.
You can have Ca. and all that it doesn’t have, and what it doesn’t have it will take from you.
Here is my advice Ca. residents…take your money and run…and if you don’t have money, you never will in Ca.
right2bright on November 22, 2008 at 2:26 PM
Hum… Republican Governor of California, Republican President… How can we blame this on Obama?
Nonfactor on November 22, 2008 at 2:28 PM
@Nonfactor – the state legislature is 75% Democrat.
ErikTheRed on November 22, 2008 at 2:30 PM
Surprised nobody’s mentioned that this year the minimum wage in California increased for $7.50 to $8.00, and last year it increased from $6.75 to $7.50. I’m sure there’s no correlation…
ErikTheRed on November 22, 2008 at 2:33 PM
right2bright on November 22, 2008 at 2:26 PM
SC is beautiful! Am selling home now, but will take time. Been looking at Ga. and NC. Ca. is not the same. I don’t think it will ever be like it was.
sheebe on November 22, 2008 at 2:34 PM
That’s just crazy. Obviously with the cost of living it isn’t as much as it seems but it still seems like a lot. I was amazed when we moved from Virginia to Florida how much cheaper the home prices are. No state income tax either. Unfortunately because of the real estate bubble they voted to double the Homestead allowance and with the values dropping, the revenue drop has been pretty bad.
Cindy Munford on November 22, 2008 at 2:41 PM
“Hum… Republican Governor of California, Republican President… How can we blame this on Obama?”
We have a RepubliCrat governor. And a mostly Democrat legislature. I believe the increases in minimum wage were the cause of a large amount of this unemployment.
Now I am waiting for Democrats to come up with the brilliant idea of reducing the minimum wage to get more of these people back to work and claim credit for “out of the box” thinking.
crosspatch on November 22, 2008 at 2:48 PM
I just wish all those Californian/Michigan/Yankee refugees would move back to where they came from. They are like Locusts. They ruined their states with their loony liberal policies and taxes which turned them into an unlivable, overtaxed and unlivable hellholes. So what do they do? They rent out every U-Haul they can get their mitts on and move to places with commonsense laws and taxes like Colorado, Arizona, Idaho, New Mexico, Tennesee and Texas and they try to start up the same stupid liberal loon crap in those places. I am taking great delight in “welcoming” every person driving with California/Michigan/Yankee state plates on their cars. Tailgate the crap out of them, pass them and then slow down so they can read my “Just say NO to Caifornication”, “Yankees go home”, “Welcome to Texas, now go home” and “Secede” bumper stickers.
Nahanni on November 22, 2008 at 2:56 PM
One can not lay blame at the feet of someone who has never done anything.
Zaire67 on November 22, 2008 at 2:57 PM
The liberals have invaded NC, so be careful. Chapel Hill was always the liberal hotbed of NC, but now the footprint is much larger as the population increases.
Western NC is gorgeous but Asheville has turned into a liberal freak zone now too.
Liberals are like locusts … once they destroy one economy they move to the next.
ex-Democrat on November 22, 2008 at 3:44 PM
Not nationally anyway, but just give him a couple of years and the whole country will be functioning as well as Chicago is now.
Keep your guns loaded, folks.
AZCoyote on November 22, 2008 at 3:47 PM
Our deficit is almost the same to the penny for what we pay to illiegl immigrants and yet I read the Ahnold wants the state employees to take a pay cut…if I were them I’d hire a good lawyer to sue the state and try to make it impossible for it to make them subsidize people who are here illeglly. I mean I’m not crazy about state workers… they aren’t the best as I’ve experienced but… to make them pay for illegal immigration is fundamentally wrong!
CCRWM on November 22, 2008 at 3:57 PM
So this is what schadenfreude feels like. I was born in California, but left when I joined the military in 1974 and never looked back. I was stationed there for two years at Los Angeles Air Force Station, and that just reinforced my relief to not be living there. Every time I hear of the CA legislature or high courts doing something incredibly stupid, I just shake my head and sigh.
Unfortunately, New Mexico has been turning left for many years now. At first, we were able to keep the looneys locked up in Taos and Santa Fe (”The City Different,” and not in a good way), but they’ve been spreading out from there. Even Ted Turner has a ranch here now. Blech!
rmgraha on November 22, 2008 at 3:57 PM
Surprised nobody’s mentioned that this year the minimum wage in California increased for $7.50 to $8.00, and last year it increased from $6.75 to $7.50. I’m sure there’s no correlation…
ErikTheRed on November 22, 2008 at 2:33 PM
I highly doubt there is a correlation, I’m going to college in Alberta Canada and they raised the minimum wage from 6-8 and there isn’t a plague of unemployment. In fact there so desperate for workers that the government recently passed a law allowing 12 year olds to be able to work in some of the service industries.
During the election cycle I read a story about an assistant manager of a dollar store who was making 10 bucks an hour. I made that much working at an entry level position in my college over the summer. Which is just sad.
Its in the economies best interest for everybody to earn a living wage. If your making minimum wage, all of your income is going towards surviving and not pumping money into the local economy.
Ric on November 22, 2008 at 4:15 PM
We have a RepubliCrat governor. And a mostly Democrat legislature. I believe the increases in minimum wage were the cause of a large amount of this unemployment.
Now I am waiting for Democrats to come up with the brilliant idea of reducing the minimum wage to get more of these people back to work and claim credit for “out of the box” thinking.
crosspatch on November 22, 2008 at 2:48 PM
We need a mind like yours! You are right. Can’t tell you how many Prof. have said that minimum wage will really crush jobs. Businesses cannot afford to pay them min. wage plus benefits. You are right!
sheebe on November 22, 2008 at 4:39 PM
Aside from oil related jobs – which will be gone soon enough with oil at $40 – what is the average pay for those new jobs?
angryed on November 22, 2008 at 5:38 PM
I doubt it had much of an effect. When I was working entry level jobs during my college years (about 5 years ago), state minimum wage was… $5.75, I believe. I was making $8 as a shipping assistant, packing boxes and whatnot. The only time anyone was paid much under $8/hr was if the payment was under the table, and given taxes… It wouldn’t surprise me if under-the-table payments were often more valuable then legitimate, taxable salaries. All the minimum wage increases have done is caught the government up to what the free market had already determined.
That said, if the minimum wage gets raised too much more, I would anticipate further layoffs, as it is seemingly in tune with the market at this point in time.
JamesN on November 22, 2008 at 5:46 PM
How many illegals does Alberta have?
Y-not on November 22, 2008 at 6:09 PM
So, in reactions to the terrible economy, CA rolls which way? Hard left or back to the Right?
james23 on November 22, 2008 at 6:10 PM
Since 1981, the federal government has transferred almost a trillion (yes, Virginia, that’s a trillion, with a T) dollars from the industrial midwest to the south and the DC suburbs.
Over the past 25 years, Michigan has averaged 81 cents in federal spending per dollar of tax sent to Washington. CA did a little better, averaging 92 cents. CA pretty much broke even or better than that on federal spending before Clinton downsized the military. California has declined from being in the top half of spending vs taxes to near the bottom.
In general, the states with a deficit have been subsidizing the states with a gain, paying for roads, water systems, infrastructure, military bases, defense plants and salaries for the 1.6 million non postal civilian employees of the federal government.
There are almost 300,000 federal employees who make over $77,000 a year including 130,000 who make >$90,000 and more than 50,000 who make >$107,000. They get a benefit package that is more generous than anything available in the private sector, including the UAW’s contract with the Detroit 3. My favorite is the “retention bonus” where fed emps can get a 25% bonus if they threaten to leave for another job.
Maryland averaged $1.24 per dollar of tax and Virginia $1.45. There are so many highly paid federal employees that 9 of the 20 wealthiest counties in the country are in those two states, in the Wash DC suburbs, and Maryland is now has the highest per capita income in the country.
Nobody is forcing GM to pay the UAW workers the way they do. The IRS, on the other hand, forces us to pay them and other federal employees.
rokemronnie on November 22, 2008 at 6:16 PM
It will be interesting to see how Democrat Washington reacts to the begging for bailouts that will surely come from blue states and cities, like CA and Philly. that is a lose/lose proposition for the Dems.
Meanwhile, folks who live in red states and red parts of blue and purple states need to be thinking seriously about firewalls. Blue governments will go broke sooner or later.
james23 on November 22, 2008 at 6:18 PM
Ive lived her my whole life, as well as started and sold a company in SoCal.
Huge entitlements, lax immigration enforcement, high taxes, anti-business laws, litigation friendly, environmental overkill and higher minimum wage.
Obamanomics didnt cause California, but for some reason its modeled everything that keeps us suffering.
Chuck Schick on November 22, 2008 at 6:22 PM
The GOP needs to focus on getting a fiscal conservative (which in my opinion of necessity includes a border enforcement type) elected for governor in 2010.
Everyone needs to suck it up and forget about running a social conservative in CA — we need to get someone who is electable. People here are sick of Sacramento and the libs in SF and LA, but they are not going to back a social con, despite the Prop 8 victory (that was because of anger at the CA Supreme Court at least as much as it was about traditional values). Meg Whitman is a name I’ve heard floated for quite a while, as well as Tom McClintock and Carly Fiorina.
I’ve been here two years. California is worth saving.
Y-not on November 22, 2008 at 6:26 PM
Alberta is soaked in oil and until recently there was an oil boom so this wouldnt surprise me. Minimum wage, benefits mandates, etc are all great when things are good. Its when things are not that they really do harm- like now. They prolong jobless recoveries… because they encourage holding off hiring until the position pays for itself. Make the position more expensive to fill, you fill less of them for longer. It’s pretty simple.
Chuck Schick on November 22, 2008 at 6:34 PM
+1
And I doubt Alberta is brimming over with illegals willing to work off the books for half the wages.
Y-not on November 22, 2008 at 6:45 PM
What do you expect with a scumbag RINO like Arnie Schwartzenkennedy running the state? Conservatives don’t call it Commiefornia for nothing!
nelsonknows on November 23, 2008 at 1:56 AM
If there was a viable conservative candidate in California then he’d be Governor.
But like most of America there just aren’t that many viable conservatives out there. They get no support – the movement looks dead.
Conservatives are the new RINO’s. Let’s kick the scumabg conservatives out! They are holding the party back.
Mr Purple on November 23, 2008 at 7:43 AM
And here I thought the [cough] DEMOCRAT [cough] legislature passed the laws for the Governor to sign.
dominigan on November 23, 2008 at 9:25 AM
Nonfactor continues its simplistic thinking.
Arnold is one of the biggest RINOs ever and with Dems controlling the legislature what a surprise that Cali is tanking.
Jamson64 on November 23, 2008 at 10:44 AM
More simplistic thought. In reality the RINOs as I know them are Democrats in disguise and they have given us the California we now know. That sounds like a winner you idiot.
Fools like you are incredibly gullible. The Dems count on the uneducated populace thus you are perfect. Bet that is the first time you have been called perfect. I tire of jokes like you ….can you tell?
Jamson64 on November 23, 2008 at 10:46 AM
Why don’t they kick out the illegals and then californians can again become maids, gardeners, busboys and road crews?
entagor on November 23, 2008 at 12:38 PM
nelsonknows on November 23, 2008 at 7:08 PM
Are you a leftist trying divide and conquer the party – or just an idiot?
If you are going to point out flaws of one group of members of the party – then I can point out flaws of other members.\
Neo-cons and RINO’s aren’t calling for conservatives to be kicked out of the party – yet conservatives think that it would be great to kick out Neo-cons and alleged ‘RINO’s’ (which is a label that usually gets applied on a whim).
Neo-cons and RINO’s aren’t taking the failures of the liberals and blaming them on the conservatives – yet the conservatives are more than happy to blame everyone else and accept no blame of their own.
Frankly I see a widespread failure of conservative candidates to get elected anywhere but in the most conservative districts. They have no appeal other than to a very thin ideological base.
Maybe you conservatives should discuss that and how to remedy that situation – but I don’t think alienating members of your own party is a good start. You might think it is a great idea – but that is just because your viewpoint is so narrow you cannot see the whole picture.
Mr Purple on November 23, 2008 at 9:58 PM
…and why are RINO’s winning elections? Because those candidates have appeal.
Why are conservatives losing? Because they lack a broader appeal.
RINO’s and Neo-cons tend to still be pro-business and against allowing a free flow of illegals to invade the country.
I fail to see how that has caused the jobless rate to increase. I would blame it on liberal policies that encourage illegals and discourage businesses from growing.
You can point the finger at your mythical ‘RINO’s’ (Republicans don’t have to conform to your ideology to be considered Republicans).
Or you could ask ‘Gee – is being 100% anti-abortion in every single case (even if a woman is raped and giving birth to the child threatens her life) costing us the chance of getting good candidates elected that might help prevent other pressing issues such as unemployment, defense, and gun rights’?
Maybe if you conservatives weren’t so adamant about having a ‘litmus test’ then we could start displacing some of those liberals and more conservative agendas could be pushed.
I’m not for abortion. I think it is disgusting that it has turned into an alternative to birth control – but when you are so loud and proud about outlawing abortion you are driving moderates away.;
…and when you start belittling or calling for members of your own party to be removed because they don’t agree with you 100% on every issue you aren’t exactly immproving your chances in the future.
Maybe some of you ‘conservative’ idiots will wake up and realize that one of these days.
i would blame your pigheadedness on the recent failures of the Republican party.
Mr Purple on November 23, 2008 at 10:19 PM
I moved from CA to MN in 1991, my total tax bill increased by $350 / mo in MN because of higher property taxes, and higher income taxes. I bought down too when buying a new home in MN. Back then you had to pay capital gains when you didn’t buy up on residential property. :-(
I know CA is worse now, and MN is better in some ways. MN Property tax used to be progressive; 1, 2, and 3 percent rates, now only 1 percent for all property values, which helped a lot.
MN still has high income taxes, and sales tax keeps ticking upwards; 6.5 to 6.75, and soon 7.125 (all this year)
We have had 3 gas tax increases this year too (using the frog in the boiling water theory of incrementalism) from 20¢ to 25.5¢ headed to 28.5¢ over the next few years.
I swear MN has the dumbest voters in the nation.
Dasher on November 23, 2008 at 10:36 PM
Obviously California is going conservative now that the Liberals have destroyed the state economy.
kanda on November 24, 2008 at 7:44 AM
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