Charles Crumpley is the Editor of the Los Angeles Business Journal. Read more at Fox & Hounds Daily
We just celebrated Labor Day, which means you’ve gotten a dose of boring “state of the labor market” articles and opinions. Alas, this is another one.
The situation on the job front is not good. You probably know that unemployment nationwide was 9.6 percent in August. It was much worse in California at 12.3 percent and in Los Angeles County at 12.4 percent in July. A year earlier, L.A.’s unemployment was 11.9 percent. In other words, it was bad last year and worse this year.
But you may not know that the unemployment rate only tells some of the story. Another part is how many jobs are being created. Or lost.
In the last year, according to the Bureau of Labor Statistics, the L.A.-area area lost 14,700 jobs. California lost 83,666. In percentage terms, those represented losses of 0.3 percent and 0.5 percent, respectively.
Those aren’t huge losses percentagewise, but consider this: The big problem in many states is that jobs are not being created fast enough to absorb the increase in workers. In California, the problem is worse. We’re actively destroying payroll jobs.
And if you look out over the last two years, it’s downright ugly. (You might want to cover your eyes for this part.) Since midyear 2008, California lost 925,000 jobs. That’s 5.5 percent of all payroll jobs. Gone.
Now, to be sure, a good part of this carnage has been caused by the economy; it’s not great anywhere in the world. But a large part is also due to government policies. You can have policies that help give birth to private-sector jobs, or you can have ones that kill them. Los Angeles and California, regrettably, are solidly in the latter category.
There are states and cities that have taken the other tack. Look at Texas. Like California, it is a big state with a significant immigrant population. But unlike California, it decided some years ago to be truly business friendly. The result? In the last year, that state has gained close to 128,000 jobs.
Its unemployment rate in July was 8.2 percent. That’s not great, but it is better than the national average and one-third less than California’s.
The point is you can’t do anything to repeal the economic cycle but you can do something to make policies that encourage job creators. Unfortunately, California’s policymakers seem intent on killing jobs and punishing businesses.
A couple of weeks ago, Jack Stewart, the president of the California Manufacturers & Technology Association, wrote an open letter to the state Legislature that pointed out in the last year 31 states had a net increase in jobs while 19 states lost jobs. Texas was the biggest winner. California was the biggest loser.
“Utah, with a population 1/14 the size of California, created 13,800 new jobs by targeting California’s high technology employers,” Stewart wrote.
“We’ve asked you repeatedly throughout the year to reduce the regulatory and tax burden on California employers. I guess you weren’t listening. …
“We’ve asked you to balance California’s budget without job killing business tax increases, but you propose billions in new taxes targeted at employers. You don’t seem to get the concept.
“You’ve granted open season for Texas, Utah and other states to poach our most valuable resources, our jobs and our industries.”
Hope you enjoyed a happy Labor Day.