Why Is California's Unemployment Rate So High? (Riverside: real estate, lease)

[cobmw]

California's unemployment rate now stands at 9.3%. That's worse than all but one or two states. My question is why? California supposedly has the seventh largest economy in the world. It has the high-tech industry, tourism and agriculture industries, pharmaceutical companies, finance companies, and the entertainment industry. Then why is the unemployment rate climbing so fast? How can jobs be disappearing so fast?

And how can it be turned around? Perhaps time to get serious about promoting business in California. Maybe some tax cuts?

[Charles]

My 20 second guess without researching this would be maybe since construction got hammered so hard and maybe finance and real estate people may be in CA in disproportionate numbers (and they are getting hammered) compared to the rest of the US, the overall CA unemployment is higher. Meaning, for all other industries: biotech, aerospace, food service, travel, health services...the unemployment rates may be the same as everywhere else - still not good but not as bad. It's like when one of the Dow 30 gets hammered it affects the overall average even if the other 29 stocks are fine.

[cobmw]

I don't find a breakdown by industry category. But the same source says Riverside and San Bernadino unemployment rates are now over 10%. I think the entire state will be over 10% early in 2009. Not a good time to be looking for work.

[NYSD1995]

Because homebuilding is a massive driver in Southern California.

[beenhereandthere]

A lot of the rate though, even though it's not good, might be lower if you did not include the seasonal workers from the agriculture fields, that got UI after the season was over.

[Mach50]

In the year ending in November, 71 percent of the nonfarm jobs lost in California were housing-related.

States with worst jobless rates share root causes - Yahoo! Finance (http://finance.yahoo.com/news/States-with-worst-jobless-apf-14019339.html - broken link)


When housing dumps, it takes a lot with it...construction, equipment leasers, engineers, finance, mortgage, real estate agents, bankers, business analysts, accountants, lawyers, tons of managers....etc.

The majority of mortgage jobs were based in California.

[cobmw]

Still a little hard to understand. California has a workforce of about 18 million people. Of that a little over one million are employed in construction and real estate combined. So how could the housing slowdown in itself cause unemployment to rise so fast? All industries must be cutting workers. As someone said the housing dump must be taking the other industries with it.

[Steve Bagu]

There are more people leaving Calif then arriving here.

Does anyone remember the movie "Soylent Green"?

It was about a city where the population was so thick that they walked shoulder to shoulder...slept on staircases and the like. People were scooped up and put into dump trucks...carried off and made into green pills as food for the remaining people.

Calif is not that bad but is slowly getting there. Any city or state has to regulate the influx of people as residents. This is not happening here. Regulating the number is difficult via the mass number of illegals who are coming across the border without any education other then manual labor skills. Too many people for limited number of jobs in their catagory of expertise.

Not being critical or offensive it is just so obvious seeing people standing at corners hoping for some kind of work. Just too many bodies for the available work. Jobs cannot be created for all the unskilled labor force (legal or illegal).

Cities generally have a plan to regulate the bldg of homes and/or businesses. Same goes for apt bldgs.
As the need for houses and other bldgs increases then permits are given. Problem today is the vast influx of people who are overburdening the welfare system and medical facilities...over crowding homes meant for 3-4 people. 10 or more people living in a two bedroom house.

Neighborhoods are being run down with the influx of so many people. Many are selling their homes due to deteriating areas and are leaving the state. My middle son was one of them. He sold his house and moved to Ariz where the taxes are cheaper and the population less demanding. Less people and less needs or demands. Less people also means less wear and tear on public roads...less taxes.

Jumping around a little. Have been in Calif 60 yrs and there has been a large change in So Calif during those yrs. The worst has been in the last 25 yrs since the influx of illegals.

Sorry..I'm not prejudiced as I had married a Mexican National so can understand some of their viewpoint.

Steve

[Huckleberry3911948]

when you owe a lota money tax cuts are not a good idea.
high unemployment bek people are not buying anything.
not warmin up those credit cards right now.

[cobmw]

"when you owe a lot of money tax cuts are not a good idea".

So where does that logic take you? If you owe a lot of money you should raise taxes? But that would kill the economy even more. Tax cuts stimulate the economy. They create jobs. Working people pay taxes.

The problem with owing a lot of money has nothing to do with taxes. California had record tax receipts for years. The politicans spent it all and even more. Want to not owe so much money? Don't let the politicians use your tax money to buy votes.