This Labor Day finds one out of eight Californians out of work and politicians everywhere promising plans for creating more jobs.

Gov. Jerry Brown offered his proposals last month, as did Lt. Gov. Gavin Newsom. President Barack Obama plans to announce his new jobs initiatives this week, while the GOP presidential contenders tout their own.

For California, which owns the nation's second-highest unemployment rate at 12 percent, whether these promises can deliver new jobs is a pressing concern.

Economists, however, warn job-seekers not to get their hopes up. Many of the politicians' proposals are good ideas over the long term but unlikely to spur immediate hiring, they say.

To do that, most agree, the government needs to spend more. But state and local governments can't afford that right now. And there's stiff opposition to more federal spending as the national debt heads into the stratosphere.

Last week's shuttering of Fremont solar-panel maker Solyndra -- despite a $535 million federal loan guarantee under Obama's $787 billion stimulus bill -- has left 1,100 jobless and bolstered criticism of government spending as a cure for unemployment.

Limited options

Beacon Economics partner Christopher Thornberg says the title of his favorite comedy show -- "Curb Your Enthusiasm" -- pretty much sums up his reaction to the various jobs proposals for California.

"Not that anybody's dumb or not well-intentioned," Thornberg said. "The limited policies they have access to just aren't going to create that many jobs. To put people to work, direct government spending is the quickest way, and nobody has the budget for that."


Efforts at the federal level that improve hiring nationwide can certainly benefit California, simply because of its size and share of the national economy, said Loren Kaye, president of the California Foundation for Commerce and Education, a think tank affiliated with the California Chamber of Commerce.

"We're 12 percent of the national economy," Kaye said. "If something's going to work, it'll help California if it also helps Texas and New Jersey."

But states also compete with each other to attract companies and jobs. A case in point: Mississippi's governor just announced a $75 million incentive for Sunnyvale cleantech firm Calisolar to build a silicon manufacturing plant in the Magnolia State that would employ nearly 1,000 people.

Steven Cochrane, an economist at Moody's Analytics, notes that proposals to grow the national economy by streamlining federal regulations and taxes, as many Republicans presidential contenders suggest, do little to help California compete with other states for jobs.

With other states boasting better employment rates and California increasingly seen as a costly and difficult place to do business, Sacramento is under pressure to change the Golden State's game.

Lackluster proposals

But Brown's recent proposal underwhelmed economists. Calling for increased tax credits for small businesses that hire workers and a sales tax break on manufacturing equipment, Brown said he would offset the $1 billion-plus in tax breaks by eliminating what he called an "outrageous and perverse'' tax incentive for multistate companies to move jobs out of California.

Stephen Levy, director of the Center for Continuing Study of the California Economy in Palo Alto, said Brown's proposed tax breaks will do little to promote hiring.

"This is a $2 trillion economy," Levy said. "Moving a billion around, which is about the size of the governor's proposal, needs to be put in that context."

Tax cuts, he added, are more likely to boost employment quickly when targeted at consumers rather than businesses -- which he argues have had plenty of tax breaks but aren't hiring because no one's buying.
Business and taxpayer groups, meanwhile, pan Brown's plan to ax the out-of-state tax loophole.

"It's a tax shift -- it raises taxes on a small group of taxpayers to provide relief for others," Kaye said.
Levy doesn't think much more of Newsom's plan for improving California's economy -- largely by making it more user-friendly to businesses. "Businesses aren't about to change their investment strategies on a dime because the state becomes more friendly," Levy said.

Texas Gov. Rick Perry, now leading the Republican presidential field, is trumpeting the Lone Star State's record on employment -- 40 percent of all new jobs in America since 2009.

But several economists dismiss Perry's Texas "miracle" as more of a mirage, arguing that his strategies -- tax cuts, limited regulation, lawsuit curbs, education spending -- would do little to quickly boost employment in California or nationally.

Texas' success at attracting jobs from other states "is a zero-sum game -- somebody wins, somebody loses," Levy said. "It doesn't add to the productive capacity of the nation."

Helping California

Cochrane noted that Texas was growing long before Perry, a trend driven by two things California doesn't have: a global oil services industry and cheap housing.

So if other state's formulas won't be much help to California, what's the state to do?

Many economists say a key to quickly curing California's malaise is to target one of its chief causes: the housing market crash.

But economists acknowledge turning around the severely depressed housing market could take years.
Until then, many economists say that only renewed federal spending and other policies that put money in consumers' pockets can make a dent in the jobless rate.

But if that's such a good idea, why is unemployment still 9.1 percent nationally, despite the hundreds of billions in tax cuts and federal handouts Congress passed two years ago?

"The hole was deeper than we thought," replied Levy, who along with many other economists suggests another round of targeted tax cuts.

"Who knows? It might work this time."