Why Is California's Unemployment Rate So High?

[dcashley]

The unemployment rate is so high ONLY because there are more willing workers than jobs.

[sheri257]

Originally Posted by AmericanAnomie

If you are asking that question, then chances are that your median income and education are well above average.

I am amazed at the number of well-educated, affluent Californians (including family members of mine) who don't realize the gravity of what has been happening to their state over many years. Is it the copious sunshine or the contagious optimism? The buffer of having great world-class universities and exciting cutting-edge industries? What is it in the water over there?

We east coasters are often far less sanguine.

I notice you live in Maryland which is also having budget problems so, you have a grave situation of your own.

For eight years I lived in the DC metro area not far from Maryland and yes, the copious sunshine and California optimism is contagious. Maybe east coasters are far less sanguine because of the horrible winters there. The day I decided to move to California was the day I was driving through a miserable east coast blizzard. I just couldn't take it anymore.

I am an RN, btw so yes, my education and income is above average. However, it wasn't when I first moved to this state. The reason? I was able to obtain my RN education through the California community college system for free. This state gave me great opportunities and a great future so, maybe that's why I believe in it so much.

[UB50]

Another component of the California problem (I heard this on the radio or TV a few months back):

California has a lot of wealthy investors. Investments like hedge funds and the stock markets were big losers for the last year so these investors will not be paying capital gains taxes and have had to cut back on their lavish lifestyles (which might include surfboards ). The crappy year for the wealthy is another reason California is facing a huge deficit -- most taxes are collected from the rich.

On top of the bad year in the stock markets and the failure of all those mortgage "derivative products," you can now add in all the Ponzi schemes (like Bernie Madoff) that are just coming to light.

There has been a huge amount of wealth lost in California in the last year. Everyone has been losing money. Not just the spenders but the savers too.

Of course, I see Californians as being eternally optimistic and creative, and I believe this state will be able to dig itself out of this hole just like it's dug itself out of every other hole (the end of the Gold Rush, the aerospace exodus, the dotcom implosion, etc.). Fortunately, we have a tremendous diversity in both people and land and we'll find things that will put us back on top. Keep the faith.

[justhere]

::standing applause::

[jillmason7]

Originally Posted by UB50

Another component of the California problem (I heard this on the radio or TV a few months back):

California has a lot of wealthy investors. Investments like hedge funds and the stock markets were big losers for the last year so these investors will not be paying capital gains taxes and have had to cut back on their lavish lifestyles (which might include surfboards ). The crappy year for the wealthy is another reason California is facing a huge deficit -- most taxes are collected from the rich.

On top of the bad year in the stock markets and the failure of all those mortgage "derivative products," you can now add in all the Ponzi schemes (like Bernie Madoff) that are just coming to light.

There has been a huge amount of wealth lost in California in the last year. Everyone has been losing money. Not just the spenders but the savers too.

Of course, I see Californians as being eternally optimistic and creative, and I believe this state will be able to dig itself out of this hole just like it's dug itself out of every other hole (the end of the Gold Rush, the aerospace exodus, the dotcom implosion, etc.). Fortunately, we have a tremendous diversity in both people and land and we'll find things that will put us back on top. Keep the faith.

I think you hit the nail on the head, even now when the economy might start to show signs of rebounding.

-jill

[CAVA1990]

Anyone who wants a job can probably find one in Northern Virginia. Unemployment there is now only 4.7%.

Virginia Business - News: Virginia hits lowest unemployment rate in 2009

[Winkelman]

Pretty Simple...

• High state income tax rates
• High workers comp insurance rates
• High rates for business insurance do to litigious nature of Californians
• Higher wages than most other states

Add it all together and California businesses have a higher cost of doing business than most other states. When things get tough they have to let people more quickly. Add to that a totally inept state legislature and you have your current mess.

States like Texas that are riding out the economic downturn better don't have these burdens to the degree California does.