Will hiring ever return in California?
That’s a question policymakers, job seekers and friends and relatives of job seekers are asking in the wake of the recent state unemployment numbers released a few weeks ago. Despite some attempts to put a positive spin on the numbers (the unemployment rate went down from 12.6% to 12.4%, the payroll jobs increased by 28,300) the numbers showed an economy that remains sluggish in terms of hiring.
The payroll job gain was the result entirely of additions in federal government employment, which were the temporary census jobs. Private sector jobs showed a net decline, as did jobs in state and local government.
Years after economic downturns, historians place the job declines and subsequent job growth in a narrative that neatly explains the reasons for and timing of the recovery. But during the time of the downturn, the depression or recession, job growth seems like it will never come.
Beginning in August 1981, the state unemployment rate climbed steadily from 7.4% to 11% by November 1982. This was the highest unemployment rate in several decades in California. At the time I was the director of a community job training group, the San Francisco Renaissance Center. Automation and technology were eliminating jobs, and manufacturing jobs in California were disappearing rapidly We saw job seekers every day, and wondered if the California economy of the future had a place for them.
In the early 1990s, the state unemployment rate again soared, driven by the aerospace and defense cuts. State unemployment grew from 7.1% in January 1991 to 9.9% by October 1992. By this time, I had left Renaissance, but was still involved in community job training as a volunteer.
Again, I recall a good deal of concern that California was encountering a new form of structural unemployment, and that the emerging economy had no place for many workers. There was a good deal of speculation at this time that we had to rethink our idea of work, including a book, The End of Work by Jeremy Rifkin, that attracted a lot of attention for its thesis that the concept of a job was becoming outdated.
Today, the conventional wisdom among economists is that the job hiring will be slow throughout the end of 2010, and likely the first quarter of 2011. Given no major economic changes, this is as good a projection as any. Each of the job numbers in California for the first 5 months of this year show private sector employers reluctant to take on additional workers.
But as anyone can testify who lived through the previous two major recessions in California, in the midst of the downturn, job prospects always look hopeless. It appears during the downturn that hiring will never return; until it does return.
Michael Bernick is the former director of the state Employment Development Department and a fellow at the Milken Institute. This piece first appeared on FoxandHoundsdaily.com.