But there’s a big shortcoming to this narrative. It’s called Los Angeles. America’s second-largest city is struggling. Unemployment is estimated to be 8.7 percent, which is worse than any state. As bad as it is, that figure is misleading because it counts as employed tens of thousands of people with part-time jobs, and it doesn’t include those who have stopped looking for work. Based on U.S. Bureau of Labor statistics for California, it’s likely that fully one in five L.A. residents who want full-time work can’t find such jobs.

From 1990 to 2013, even as L.A.’s population went from 3.49 million to 3.85 million, there was a 3 percent decline in total payroll jobs, according to a recent UCLA Anderson report.

The bad news is that both the city’s short-term and long-term prospects are grim as its core 20th-century industries struggle or vanish. Aviation and manufacturing, both of which used to be huge within city limits, are all but gone. And the film/TV industry has never done more of its shooting outside of L.A., leading to panicked state  lawmakers passing an emergency increase in Hollywood subsidies in recent weeks after being begged to do so by city lawmakers.

The biggest ‘failed city’ of them all

This is not a narrative one hears that often. When California journos write about failed cities, they focus on the ones that have declared or are darn near bankruptcy.

Meanwhile, the city whose population is far greater than the combined population of those failed cities steadily goes down the drain. In January, a blue-ribbon panel of prominent Angelenos acknowledged this in a hugely downbeat report called “A Time for Truth.” Here’s the L.A. Times’ account:

Los Angeles is a city facing economic decline, weighed down by poverty, strangled by traffic and suffering from a crisis of leadership, according to a report released Wednesday by a 13-member panel of influential civic leaders.

The Los Angeles 2020 Commission offered a harsh assessment of government decision-making, warning that the nation’s second-largest city is heading to a future where it can no longer afford to provide public services. Among a litany of problems highlighted in the report are underfunded retirement programs for City Hall employees, slower police and fire response times, and government spending that is growing faster than revenue. …

The report … was commissioned last year by City Council President Herb Wesson. It arrives as the city is struggling to regain its financial footing after a turbulent five-year period of recurring budget crises, the elimination of 5,300 jobs and battles to secure union concessions on pensions and retirement benefits. …

Among the challenges highlighted by the panel: a poverty rate higher than many other American cities; city revenue that has remained flat since 2009; a shrinking middle class; and “wishful” responses to a “continued economic decline.”

Everywhere you look, grim tidings

Bruce Bialosky, a Los Angeles writer and occasional GOP politician, despaired at the breadth of his city’s decline:

8% of Los Angelenos earn poverty pay. If you include those out of work, they state 40% of residents live in misery.

Los Angeles is the only one of seven major metropolitan areas in the country to have a net decline in employment over the last decade.

Major industries are leaving; none are moving here. Twelve companies on the Fortune 500 used to call Los Angeles home, and now just four do.

The school system graduates just 60% of its students from high school and only 32% are qualified for either the UC or Cal State University systems.

The pension system has set aside only 10% of the future needs of city workers.

Stunning stuff. The next time you hear someone tout the California rebound narrative, please guffaw and ask how come it doesn’t extend to California’s biggest city.

As the star of “NCIS: Los Angeles” would say, don’t call it a comeback.

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