Outlook positive for state’s slowly recovering economy
By Brad Greenberg
Oct. 16, 2003 9:00 p.m.
A stunted national economy and improvements in labor
productivity have kept California and national unemployment high,
economic experts said.
But many insist advancements in productivity will not have a
long-term effect on the number of available jobs, and that future
college graduates will find a friendly job market in
California.
California employers shed another 16,600 payroll jobs in
September ““ the largest single-month slide this year ““
bringing the total of jobs lost since January to 51,300, according
to an Employment Development Department report released last
month.
Decreases in payroll jobs were not consistent with the
state’s unemployment rate, which dipped to 6.4 percent, the
lowest level since January 2002.
Some economists attributed the contradiction between the
unemployment rate and payroll job numbers to many Californians
having gotten tired of searching for a job and no longer
considering themselves in the job market.
Despite a trend of disappearing jobs in California, the state
economy seems ready to turn the corner. It will likely do so before
many UCLA students graduate in June, said Tom Lieser, senior
economist with the UCLA Anderson Forecast.
“The outlook is for the economy to slowly get
better,” said Stephen Levy, director of the Center for
Continuing Study of the California Economy.
Last month, Levy said California’s economy was bad but
better than the national economy, and that once the national engine
picks up, California will likely follow.
Though economists say a national recovery officially began in
November 2001 ““ almost two years ago ““ the economy has
been slow to resurge.
Last month’s Anderson Forecast predicted the economy would
grow approximately 2.5 percent between October and the end of the
year. Average quarterly growth is 3 percent.
But although the economy has begun to show gains in recent
months, it has done so without adding jobs.
Levy attributed the “jobless recovery” to a
reluctance among employers to maintain large staffs. Hoping to
improve productivity and cut payroll costs, many industries are
restructuring their operations and cutting jobs in the process.
“Those jobs that are lost are lost permanently,”
said Jack Kyser, chief economist for the Los Angeles County
Economic Development Corporation.
Because of rising costs in health care and workers’
compensation, Kyser said it is cheaper for companies to invest in
new technology, demand more from their employees, or hire temporary
workers who are exempt from company health coverage.
Workers’ compensation costs have tripled statewide since
1995.
Despite general downsizing, the EDD is predicting significant
growth in various industries, specifically information technology
““ which was crippled by the technology bust of 2001 ““
and personal and home care assistants.
Kyser is optimistic that Californians will aid an economic
recovery by starting their own businesses.
“There is always the entrepreneurial spirit in
California,” he said. “That is the beauty of
California.”
