CA comeback suffers setback

California Comeback - chamberJuly 4, 2013

By Wayne Lusvardi

California experienced a sharp setback in the third week of June — despite all the media talk about an economic comeback.  According to the U.S. Department of Labor, California had an increase of 15,341 claims for unemployment insurance claims in the week ending June 22, mainly due to service worker layoffs.

California’s sudden increase in unemployment insurance claims runs against the national trend of claims declining. The U.S. Department of Labor reported that seasonally adjusted unemployment insurance claims declined nationwide by 9,000 for the week of June 22.  The unadjusted data indicates claims fell by only 1,589 however.

California unemployment insurance claims represent 56 percent of the layoffs of the worst five states for the third week of June 2013; 39 states saw an improvement in claims and 14 states experienced a rise in claims.  The largest increases in initial claims for the week ending June 15 were in California (+15,341), Pennsylvania (+4,882), Florida (+4,850), Michigan (+1,114), and Maryland (+1,065).  The largest decreases were in Illinois (-3,401), New York (-2,090), Georgia (-1,893), Missouri (-1,591), and Tennessee (-1,542).

The long term U.S. trend has been a flattening of the downturn in unemployment insurance claims. The sharp upward spike in unemployment claims in California in mid June does not reflect a strengthening economy or a trickle-down effect.

Service sector hit hardest

California’s sudden rise in unemployment claims was all attributed to service worker layoffs.  Other state unemployment insurance claims were attributed to a variety of industries.

Neither the U.S. Bureau of Labor Statistics nor the California Employment Development Department provides a clear definition of what the service worker sector of the economy is.  However, service workers are generally considered to be: Attendants (hospital and other institutions, professional and personal service, including nurses aides and orderlies), barbers, char workers and cleaners, cooks (except household), counter and fountain workers, elevator operators, firefighters and fire protection workers, guards, doorkeepers, stewards, janitors, police officers and detectives, porters, servers, amusement and recreation facilities attendants, guides, ushers, public transportation attendants, and kindred workers.

Loss of low end jobs, surplus of state revenues

The loss of low-end service worker jobs comes at a time when state budget coffers are basking in a budget surplus.  Depending on who is counting, California is projected to have a $1.2 to $4.4 billion budget surplus this year. Apparently what media considers a “comeback” is when the state is flush with cash from tax increases — even as unemployment may be rising.

Also, California’s Unemployment Insurance Fund has been running a $10.3 billion deficit based on borrowed funds from the U.S. government. California does not expect to be able to pay this back until 2020. Unemployment insurance is a tax on employers and is not funded out of the state general fund.

Things are getting better in California for government. But there hasn’t been as much improvement for those semi-skilled people at the bottom of the occupational ladder.

Except for growth in government and, of course, in high-tech Silicon Valley companies, California’s “comeback” has been greatly exaggerated.

Unemployment Claims by State — Third Week June 2013

State Change in Unemployment Weekly Claims State Supplied Comment
STATES WITH INCREASE IN UNEMPLOYMENT CLAIMS
California + 15,341 Layoffs in services industry
Pennsylvania + 4,882 Layoffs in transportation, hotel & food service, finance & insurance
Florida + 4,850 Layoffs in agriculture, construction, manufacturing, wholesale trade, retail trade, service industries
Michigan + 1,114 No comment
Maryland + 1,065 No comment
STATES WITH DECREASE IN UNEMPLOYMENT CLAIMS
Illinois – 3,401 Fewer layoffs in construction, manufacturing, administrative & support industries
New York – 2,090 Fewer layoffs in construction, hotel & food service, finance and insurance
Georgia – 1,893 Fewer layoffs in manufacturing, administrative support, health care, social assistance, & hotel and food service
Missouri – 1,591 Fewer layoffs in transportation & warehousing, construction, hotel & food service, health care and social assistance
Source: U.S. Dept. of Labor, Unemployment Insurance Weekly Claims Report, June 27, 2013

 

23 comments

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  1. stolson
    stolson 4 July, 2013, 08:58

    RE–Except for growth in government and, of course, in high-tech Silicon Valley companies, California’s “comeback” has been greatly exaggerated.
    How come there is growth in big non productive govt???
    Where is the outrage?

    Reply this comment
  2. Rex the Wonderdog!
    Rex the Wonderdog! 4 July, 2013, 09:04

    Jerry said the depression is over, you mean he lied to us??? No way.

    Reply this comment
  3. Hondo
    Hondo 4 July, 2013, 09:06

    I sure hope my liberal friends here prove me wrong. My brother could use a job after 3 years unemployed.
    Facts: Kalifornia has more economic assets than any other place on earth. So why does Kali have the highest rates of poverty, and welfare? Why do they have the largest income gaps between the richest and poorest after decades of liberal lawmaking? Why does Kali have one of the highest unemployment rates in the country rather than one of the lowest?
    Once again, I hope my liberal friends prove me wrong. My brother could use a job.
    Hondo….

    Reply this comment
  4. a frequent reader
    a frequent reader 4 July, 2013, 09:51

    Its the best place in the US for a free lunch, but seemingly near the worst for a job. A model governance for society so sayeth the voters.

    Happy 4th everyone! <- not meant to be facetious

    Reply this comment
  5. BobA
    BobA 4 July, 2013, 10:39

    Hondo:

    Your liberal friends are like a bunch of Baghdad Bobs. California’s unemployment rate could go to 30% and they would tell you that jobs are plentiful and the state is in full recovery mode. State personal income tax could go to 20% and they would swear up and down that Kali has one of the lowest personal income taxes in the nation.

    Simply put, when it comes to liberal policies your liberal friends hear no evil, speak no evil and see no evil.

    Reply this comment
  6. Steve Frank
    Steve Frank 4 July, 2013, 12:33

    I believe that in the last two months the State lost 12,00 and 15,000 jobs (numbers rounded off). This is now a trend.

    Reply this comment
  7. Sean Morham SIlver
    Sean Morham SIlver 4 July, 2013, 18:38

    Sounds like recovery is accerating…doomers can t accept it, who cares that when the global financial collapse happens in autumn s 2013.. Seiu is good.

    Reply this comment
  8. Queeg
    Queeg 4 July, 2013, 20:48

    Service jobs never show productivity increases unless they invent a faster panini machine…..

    Reply this comment
  9. pete ortiz
    pete ortiz 4 July, 2013, 23:04

    cant wait to get out of this frigging state!used to be the golden state, now it just a haven for all the illegals from all over the world! now with amnisty just around the corner????

    Reply this comment
  10. BobA
    BobA 5 July, 2013, 07:40

    Steve Frank:

    It doesn’t matter. The fraudulent unemployment formula is not designed to reflect those numbers. This allows the politicians and government statisticians to fudge the numbers and put a pretty face on an ugly truth.

    Besides, they can safely assume that by the time the full extent of the real truth is known, they’ll be retired or out of office and thus escaping any culpability and accountability.

    Reply this comment
  11. eyeamok
    eyeamok 5 July, 2013, 11:22

    I wouldn’t worry too much about the California Economy, Things will start looking up real soon. Last week I was in SoCal and couldn’t help but notice that there are 2 Giant companies moving in and taking over more Commercial Real Estate than I have ever see, They are on almost every Block, Entire Industrial Complexes, Tall buildings, strip malls,…. They literally are expanding everywhere, their names are For Lease and Space Available.

    Reply this comment
  12. SeeSaw
    SeeSaw 5 July, 2013, 11:49

    Rex, wake up and smell the coffee! Don’t you know you only have one go-around? Better start living your life, instead of worrying about how others are living their’s!

    JB happens to be doing the best he can; a true CA citizen–not a carpetbagger searching for power.

    Reply this comment
  13. Queeg
    Queeg 5 July, 2013, 20:03

    Yeah…SeeSaw!

    Reply this comment
  14. BobA
    BobA 5 July, 2013, 22:54

    eyeamok:

    I’m originally from that crap hole called LA and you’re absolutely tight. I had the good sense to move out 20 years ago and there isn’t enough money on this planet to get me to move back there.

    For Lease and Space Available is becoming the largest land occupiers in LA. The only growing businesses in the city are 99 cent stores, fast food restaurants and Mexicans “entrepreneurs” standing at intersections selling fruits & vegetables, rugs and cheap velvet paintings.

    Reply this comment
  15. Rex the Wonderdog!
    Rex the Wonderdog! 6 July, 2013, 12:18

    Seesaw, stop making me cry 😉

    Reply this comment
  16. Queeg
    Queeg 6 July, 2013, 16:59

    Bobo….your comments are….well….PC-less!

    Reply this comment
  17. BobA
    BobA 6 July, 2013, 17:24

    Queeg:

    The PC term for the democrat party symbol is donkey. I don’t do PC so I call it by it’s colloquial name: “jackass”.

    Brevity is the soul of wit. Tell me, which term is more precise in it’s meaning:

    Visually challenged or ugly?
    Gravitationally challenged or fat?
    Mentally challenged or dumb?

    Reply this comment
  18. S Moderate Douglas
    S Moderate Douglas 7 July, 2013, 13:48

    Steve Frank:

    ” I believe that in the last two months the State lost 12,00 and 15,000 jobs (numbers rounded off). This is now a trend.”
    …………………..

    I believe California ADDED 9,800 jobs in April, 2013 and added another 10,800 jobs in May, 2013, according to the Current Employee Statistics.

    How is it possible that the number of jobs increased while the number of unemployment claims increased?

    The size of the labor force has also been increasing.

    According to the BLS, the size of the civilian labor force in California increased by 165,400 from May 2012 to May 2013.

    The number of employed Californians has increased by 530,000 in the same period.

    The number of “unemployed” DECREASED by 364,000 in the same period.

    http://data.bls.gov/timeseries/LASST06000006?data_tool=XGtable
    ……………………

    “number of layoffs” or “number of unemployment claims” is only half the story.

    Nationally, last week there were 346,000 unemployment claims nationwide, but there were 195,000 NEW jobs in June alone.
    ……………………..
    Alec Levenson:

    the number of people applying for unemployment benefits fluctuates from month to month, and week to week. The high number of unemployment claims earlier this month will not necessarily impact the state’s monthly unemployment rate

    But so far, he said the economy is moving in a positive direction.

    The glass is at least half full.

    Reply this comment
  19. S Moderation Douglas
    S Moderation Douglas 7 July, 2013, 18:03

    “California’s “comeback” has been greatly exaggerated. How come there is growth in big non productive govt???

    From May 2012 to May 2013, total California  overall employment increased by 234,000 jobs. 

    From May 2012 to May 2013, California GOVERNMENT jobs DECREASED by 13,000. 

    Growth in government?

    Reply this comment
  20. Queeg
    Queeg 7 July, 2013, 22:15

    Bobo….babble…

    Reply this comment
  21. stolson
    stolson 8 July, 2013, 08:32

    taken from Townhall by DanielJ Mitchell——

    …interest groups have effective control of state and local political systems and they use their power to engage in massive rip-offs of taxpayers. One of the main problems is that there’s a bloated government workforce that gets wildly overcompensated. Here are some staggering examples.

    A state nurse getting $331,000 of annual compensation.

    A county administrator getting $423,000 pensions.

    A state psychiatrist getting $822,000 of annual compensation.

    Cops that get $188,000 of annual compensation.

    A city manager getting $800,000 of annual compensation.

    But overpaid bureaucrats are not the only problem. California politicians are experts at wasting money in other ways, such as the supposedly high-speed rail boondoggle that was supposed to cost $33 billion and now has a price tag of $100 billion.

    You may be thinking that I’ve merely provided a handful of anecdotes, so let’s recycle some numbers that I first shared back in 2010.

    California state spending has outgrown the state’s tax base by 1.3 percentage points annually for 25 years. Simple arithmetic dictates that in lieu of constant tax increases, this perpetuates a deficit. From 1985 to 2009 state GDP in California grew by 5.5 percent per year, on average (not adjusted for inflation). Annual growth in state spending was 6.8 percent, on average.
    CA DOES HAVE MONEY WOES.

    Reply this comment
  22. BobA
    BobA 8 July, 2013, 08:52

    Queeg:

    Yeah, uh-huh. When have you ever said ANYTHING that wasn’t psycho-babble? You answer will prove my point.

    Reply this comment
  23. Ulysses Uhaul
    Ulysses Uhaul 8 July, 2013, 21:56

    Bobo…..only CWD attracts negative posters like you…..so unfortunate….liberals are So happy and live the good life working union and in government…….why not roll over and be nice…you may qualify for more than your expediter job at Macaroni Grill!

    Reply this comment

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