California jobs picture brightens, but Sacramento region still suffers
Published: Saturday, May. 21, 2011 - 12:00 am | Page 1A
A world away from the Central Valley, the business-networking website LinkedIn held a wildly successful stock offering this week, bringing billions of dollars to the Mountain View company.
Sacramento, though, was the same old story. The construction industry was stuck in the mud and government workers continued to look over their shoulders.
New jobless figures released Friday showed improvement in both the state and regional economies. But a closer look at the numbers shows that the recovery remains a tale of two Californias.
Inland areas like Sacramento, which took the worst of the housing crash, continue to struggle. At the same time, the coast is riding a boom in technology and other key industries – not to mention a healthy stock market.
The overall effect is a fairly steady improvement in the economy. California's unemployment rate fell to 11.9 percent in April, down a tenth of a percentage point. That was the first drop below 12 percent in nearly two years, the Employment Development Department reported.
Employers added a relatively modest 8,900 jobs in April, with cutbacks in government offsetting some of the private-sector growth. Even so, payrolls have grown by 144,000 jobs in the past year, a 1 percent increase.
"I wouldn't say we have a lot of momentum, but we're consistently getting job gains," said Howard Roth, chief economist at the state Department of Finance.
Sacramento's numbers were somewhat more promising than usual. Unemployment fell by seven-tenths of a point, to 12 percent. The region added 3,200 jobs.
But economists said the improvement in Sacramento was mainly seasonal, and the region's recovery still trails much of the rest of the state.
"San Jose, Orange County, San Francisco – all doing great. San Diego, L.A. – doing very well. But the Inland Empire, the East Bay and the Central Valley are hurting," said Chris Thornberg of Beacon Economics consulting in Los Angeles.
Much of California's job growth has come in technology, international trade and other high-wage occupations. Sacramento, by contrast, has shed 13,600 jobs in the past year – a loss of 1.7 percent.
Economist Jeff Michael said it's easy to see why Sacramento is a straggler.
"Our economic base is not in these areas that are recovering – technology, professional services, entertainment, the movie industry," said Michael, head of the Business Forecasting Center at the University of the Pacific.
That leaves relatively little opportunity for Sacramentans like Leroy Jojola, 52, who's been working intermittently since losing his last full-time job at a bakery four years ago.
Jojola came to a state-run job center on Broadway this week to look through the employment listings.
"I come here every day, they know me here by heart," he said. "There are no jobs out there."
He said he'll take "anything available – warehouse driver, machine operator."
The region has some bright spots. Telefunken Semiconductors is planning to expand Roseville's computer chip plant, formerly owned by NEC. Two Japanese manufacturers are opening plants in Yolo County.
The health care industry, which has been the most resilient of all the past few years, added 1,300 jobs in April.
But other bread-and-butter industries are still troubled. Construction was flat during April, normally a month when nearly 1,000 jobs are added. The industry has shrunk by an additional 3,000 jobs since last year.
"Only government lost more jobs over the last year," said Justin Wehner, an EDD labor market consultant.
About 6,000 of Sacramento's government workers have lost their jobs in the past year. Most of the layoffs have come in schools and local government. The state payroll has been flat, but the budget deficit continues to fuel speculation about deep job cuts in Sacramento's single largest employer.
One piece of news that might spare the capital some pain: State tax revenue is running $6.6 billion ahead of projections, Brown said in his revised budget proposal this week.
Even this hopeful number, though, points up the disparity in how California is recovering. The governor's forecasters said the jump in tax collection is largely due to fatter stock portfolios among the wealthy – not a broad, lift-all-boats surge in the overall economy.
Sacramento's wealthy residents, though not as numerous as in places like Silicon Valley, are doing better too. Rick Niello, whose family operates 10 mostly upscale car dealerships in the area, said affluent customers are starting to spend more.
And even while the real estate market remains depressed, agent Kendra Bishop said bidding wars for million-dollar homes are starting to break out in places like Granite Bay.
"The upper end is really picking up," said Bishop, an agent with Coldwell Banker Residential Real Estate in Roseville. "We're seeing a lot of cash in the marketplace."
New jobless figures released Friday showed improvement in both the state and regional economies. But a closer look at the numbers shows that the recovery remains a tale of two Californias.
Inland areas like Sacramento, which took the worst of the housing crash, continue to struggle. At the same time, the coast is riding a boom in technology and other key industries – not to mention a healthy stock market.
The overall effect is a fairly steady improvement in the economy. California's unemployment rate fell to 11.9 percent in April, down a tenth of a percentage point. That was the first drop below 12 percent in nearly two years, the Employment Development Department reported.
Employers added a relatively modest 8,900 jobs in April, with cutbacks in government offsetting some of the private-sector growth. Even so, payrolls have grown by 144,000 jobs in the past year, a 1 percent increase.
"I wouldn't say we have a lot of momentum, but we're consistently getting job gains," said Howard Roth, chief economist at the state Department of Finance.
Sacramento's numbers were somewhat more promising than usual. Unemployment fell by seven-tenths of a point, to 12 percent. The region added 3,200 jobs.
But economists said the improvement in Sacramento was mainly seasonal, and the region's recovery still trails much of the rest of the state.
"San Jose, Orange County, San Francisco – all doing great. San Diego, L.A. – doing very well. But the Inland Empire, the East Bay and the Central Valley are hurting," said Chris Thornberg of Beacon Economics consulting in Los Angeles.
Much of California's job growth has come in technology, international trade and other high-wage occupations. Sacramento, by contrast, has shed 13,600 jobs in the past year – a loss of 1.7 percent.
Economist Jeff Michael said it's easy to see why Sacramento is a straggler.
"Our economic base is not in these areas that are recovering – technology, professional services, entertainment, the movie industry," said Michael, head of the Business Forecasting Center at the University of the Pacific.
That leaves relatively little opportunity for Sacramentans like Leroy Jojola, 52, who's been working intermittently since losing his last full-time job at a bakery four years ago.
Jojola came to a state-run job center on Broadway this week to look through the employment listings.
"I come here every day, they know me here by heart," he said. "There are no jobs out there."
He said he'll take "anything available – warehouse driver, machine operator."
The region has some bright spots. Telefunken Semiconductors is planning to expand Roseville's computer chip plant, formerly owned by NEC. Two Japanese manufacturers are opening plants in Yolo County.
The health care industry, which has been the most resilient of all the past few years, added 1,300 jobs in April.
But other bread-and-butter industries are still troubled. Construction was flat during April, normally a month when nearly 1,000 jobs are added. The industry has shrunk by an additional 3,000 jobs since last year.
"Only government lost more jobs over the last year," said Justin Wehner, an EDD labor market consultant.
About 6,000 of Sacramento's government workers have lost their jobs in the past year. Most of the layoffs have come in schools and local government. The state payroll has been flat, but the budget deficit continues to fuel speculation about deep job cuts in Sacramento's single largest employer.
One piece of news that might spare the capital some pain: State tax revenue is running $6.6 billion ahead of projections, Brown said in his revised budget proposal this week.
Even this hopeful number, though, points up the disparity in how California is recovering. The governor's forecasters said the jump in tax collection is largely due to fatter stock portfolios among the wealthy – not a broad, lift-all-boats surge in the overall economy.
Sacramento's wealthy residents, though not as numerous as in places like Silicon Valley, are doing better too. Rick Niello, whose family operates 10 mostly upscale car dealerships in the area, said affluent customers are starting to spend more.
And even while the real estate market remains depressed, agent Kendra Bishop said bidding wars for million-dollar homes are starting to break out in places like Granite Bay.
"The upper end is really picking up," said Bishop, an agent with Coldwell Banker Residential Real Estate in Roseville. "We're seeing a lot of cash in the marketplace."
No comments:
Post a Comment