CA taxes, mandates boost unemployment

CA taxes, mandates boost unemployment


California Unemployment Development Department“California raised a bunch of taxes this year. Its economy hasn’t collapsed.” So read the snarky headline accompanying a post last month by Jim Tankersley on the Washington Post’s Wonkblog.

“Eight months after raising sales and income taxes, California is still adding jobs on par with the rest of the nation,” wrote Tankersley. “The doomsday predictions haven’t come true. California is still recovering.”

Well, I’m waiting for the WaPo blogger to post a followup addressing the latest jobs report by the California Employment Development Department. It reveals that the state’s unemployment rate rose for the second straight month in August, after 23 straight months of decline.

And while California actually was outpacing the U.S. rate of job creation earlier this year, with payroll growth of roughly 2 percent, as the Los Angeles Times noted last week, the Golden State’s year-over-year rate of job creation was 1.5 percent in August, which actually was lower than the nation’s rate of job creation.

The 29,100 nonfarm payroll jobs created in August brings total job creation to 826,500 since February 2010, when the state’s economic recovery began, according to EDD’s jobs report. Yet, while that job creation is welcome, California still has not recovered all 1.4 million jobs it lost during the Great Recession.

Indeed, three-and-a-half years into California’s recovery, some 1.6 million people are unemployed, EDD reported. Another 1.3 million California workers can only find part-time jobs, according to an “economy brief” issued this month by the nonprofit California Budget Report.


Some 240,000 California workers are in danger of losing hours (and the wages that go along with), according to a study by the UC Berkeley Center for Labor Research and Education, because of the new Obamacare mandate that employers with payrolls of 50 or more workers must provide health insurance to those working 30 hours a week or more.

All of this adds up to a state jobless rate of 8.9 percent in August, which is nowhere near the state’s 5.8 percent jobless rate when the recession officially began back in December 2007.

Tankersley, the WaPo blogger, somehow thinks that the more than $30 billion in new taxes (over the next five years) that took effect here in the Golden State at the start of 2013 has had no damping effect on job creation. But the anemic jobs growth of the past two months, and resultant uptick in the state’s jobless rates, suggests otherwise.

And, regrettably, the California jobs outlook doesn’t look especially promising for the near future.

That’s because, in addition to the bunch of new taxes California has imposed, and in addition to the costly new health insurance mandate Obamacare has imposed, the Legislature sent a measure this month to the governor’s desk that will raise the state’s minimum wage by a job-killing 25 percent over the next three years.

That may not add up to a doomsday scenario to “wonks” like Tankerley. But it certainly is for the nearly 3 million Californians that are either unemployed or underemployed.

Tags assigned to this article:
unemploymentJim TankersleyWonkblogJoseph Perkins

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