Local Unemployment Rate Stays Flat In 2010

Could we see a decrease in the local jobless rate in 2011? We discuss how the region's double-digit unemployment rate affected San Diego's economy in 2010. And, we talk about next year's economic predictions.

Guests

John Warren, editor and publisher of San Diego Voice & Viewpoint.

Bob Kittle, director of News Planning and Content for KUSI.

Tony Perry, San Diego Bureau Chief for the Los Angeles Times.

Read Transcript

GLORIA PENNER: I'm Gloria Penner, and I'm joined by the editors at the Roundtable These Days in San Diego. All of us at the round table and our entire staff wish you a great 2011, but before the new year really get it is started, we're gonna give some opinions on the last 12 months in San Diego, what we feel, good, bad, or ambivalent about, with the focus on the economy, politics and the military. The editors taking on this assignment today are John warn, editor and publisher of San Diego voice and viewpoint. John, it's good to see you, happy new year.

WARREN: Happy new year, Gloria.

GLORIA PENNER: Thank you. And then we have Bob Kittle, director of news planning and content for KUSI. I hope you have a wonderful 2011, bob.

KITTLE: The same to you, Gloria. Thank you.

GLORIA PENNER: And Tony Perry, San Diego bureau chief of the LA Times. No show would be complete as we start the new year without you, Tony.

PERRY: Oh, such nice talk.

GLORIA PENNER: It's true.

PERRY: Good to be here.

GLORIA PENNER: There will be no callers on this show. But our website is always open for your comments. It's KPBS.org/editors. Well, let's start with an area few people are ambivalent about, that's the economy. The great recession began almost four years ago, and the hope was that by new the recovery would be well under way, but John, San Diego's unemployment rate increased to 10.4 percent in November up from 10.3 in October. How is San Diego fairing compared to the rest of the state and the nation.

WARREN: Well, if you look at the rest of the state and look as close as Riverside, San Bernardino, Temecula, Murrieta, you're looking at 13, 14 percent unemployment rate. You're looking at a state wide average of about 12 percent. But unemployment is up because even with all of the efforts toward the economy, the jobs are not materializing to go with reducing that. And we have a great deal of discussion about unemployment and jobs. We've seen some jobs in the retail area. But those things could be related more to the holiday period. There's discussion that the lack of construction permits and start ups is really suppressing it, because there's some 30000 jobs in the construction area. And then we have this long scenario of people who have been un. Employed for up to 99 weeks or 2 years, and no longer have benefits. And so it's not a rosy picture at this point going into the new year.

GLORIA PENNER: There is that one theory, Tony, that the reason that the unemployment rate is up is because more people are returning to the labor force to look for jobs. And so they're being counted now.

PERRY: I've heard that theory. I have no idea whether it's correct or not. But I know that when I'm doing my shopping, this week, the lines seemed shorter than last year. I got in and out of the post office quicker than last year. So I still am concerned that we're not gonna have, even though there are indications we will, we are not gonna have a rosy Christmas in terms of sales and the boost that that brings. I mean, we're still in a long tunnel. And the fear, of course, is that we could have what the Japanese had, the famous lost decade. Of we all hop not. But if anybody's got a formula, let them call forth immediately.

GLORIA PENNER: All right, let's talk about what you just said. You said that the lines are shorter and that the post office wasn't as busy as last year. So are you concluding that attitudes this year are western last year?

PERRY: I think people are gloomier that year. And it's not just this unseasonable weather. I think people are more despondent, more feeling that it's just not gonna end real soon. We've certainly seen that in the president's approval ratings among his own party have plummeted. People just don't feel that it's going to end any time soon. And unlike, say, 93 here locally where we had general dynamics leave town and left a big hole, you can't really look at one big company that caused our problems, as John was pointing out, it's across the board. And until construction really heats up, and that's gonna be a while, I think we're gonna be in a slump. Maybe not as bad as Riverside, certainly not as bad as imperial, but a slump none the less.

GLORIA PENNER: Bob Kittle?

KITTLE: Well, I think if you just look at the numbers. We lost tens of millions of jobs in this recession, and they haven't come back. Relatively few have. And most of those were temporary jobs, like census workers, created with federal money. The truth is that the federal stimulus packages that started under George bush and were greatly expanded under Barack Obama, have not succeeded in creating jobs, they have perhaps succeeded in stabilizing the credit system and the banks. But they have not creating jobs. And that's the real dilemma. The economy now has been growing for several quarter, but it's a jobless recovery.

GLORIA PENNER: John?

WARREN: I'm really concerned when we look at the economy in terms of what's happening because we know that businesses are sitting on some $2 trillion in cash. So people do have the capacity. But I think the mentality has changed in the business world in the past two-years, people have learned to do more with less. And so this is no desire, now, to return to the old ways of just having people hired. And benefit it is, all of the things that go into the labor package. What I'm concerned about most locally is that outside of discussing the numbers, we see no local plans, no local discussion among political leaders about the joblessness or how we might help the people at the local level. Everything is coming in from the feds.

PERRY: But John, we are part of the main here. Can we have a separate San Diego County economy? Is there anything that Jerry Sanders or Ron Roberts or whoever can really do?

WARREN: Well, I think just talking about it can be helpful. That's what's been done in the past. Those in positions of leadership discuss and encourage businesses to meet with business, and seep as the president is doing initial nationally.

GLORIA PENNER: Okay, let me give you an example. The port district just opened another cruise ship terminal, even though the cruise ship industry has slow according to their own spokes person. Is that a smart idea or is it premature?

WARREN: Well, we've gotta look at how long it took them to plan the terminal, to start building it, and the discussion before the terminal was built, when they started this cruise ship industry was up, and we were looking to many more ships coming into San Diego. So they couldn't anticipate the change, but with all capital projects, the project is takes longer than many times than the trend that led to the development. So what Rita Vandergrass pointed out was the multiple uses that could be made of that fact in terms of inviting the community so it wouldn't just sit there as an empty cruise ship terminal when ships weren't here.

GLORIA PENNER: What do you think, Bob Kittle? You've been covering politics for many, many years. What power do the political leaders in San Diego have to bring in more jobs to our region.

KITTLE: Well, I think their power is relatively limited. But one thing that local government leaders can do, elected officials is to create a healthy business climate to the extent possible, and such thins as raising the sales tax, raising taxes generally make San Diego a less attractive place to do business. Will also such things as expanding the convention center can improve the local economy because it creates jobs in hotels and restaurants and that sort of thing. So there are some things that local government can do to keep San Diego as the economy healthy.

GLORIA PENNER: Let's talk about those jobs and hotels and restaurants, Tony. Will low paying jobs further depress the housing market, for example?

PERRY: That's always been the argument. That we have a lot of jobs and we've banked on an industry that doesn't offer what we would call living plus wages. On bob's point, dog gone it, I just don't know if our taxation situation and the Union Tribune did what everybody does about every 24 months, they ran a story that pointed out that taxes are lower here across the board, almost, on every category, taxes are either lower or nonexistent here, if that doesn't provide a good, encouraging place to start or expand your business, I don't know what more we can do. I mean, I know that CCDC, and SCDC, the redevelopment agents, they go around sieving subsidies and things like, that, and in the old days, Torrey Pines Mesa, but I just don't know what we can untax ourselves into prosperity. Maybe the exact opposite has to happen. Maybe we need to shore up our city and to a lesser extent our county governments. I'm with John. I'm flummoxed by the fact that large industry is sitting on a lot of capital. One devil theory is that they're all GOP, and they hope to make this a one term president. I don't know if I buy that, but it's an interesting talking point. And as Paul Krugman pointed out in his column the other day, there is a good theory that he believes that deregulation got us into this issue, and now the Republican party is moving back to, hey, we need less regulation. Which is exactly what got us, in Krugman's point, that got us into this. So we're in the ditch, and we're not sure how the hell to get out at this point, either in San Diego County or in this country.

GLORIA PENNER: All right, well, let me bring in something that has happened fairly recently. John Warren, Congress just passed an un. Employment benefits extension. Will that pull more people out of the labor force who will take a vacation while they're collecting the benefits?

WARREN: I don't think so. I think that's really unfair that we even have people saying that because of how we determine who's unemployed, whether people are available or willing or able to working we have at least a million people out of the four million that are unperformed and are receiving extended benefits, at least a million have been unemployed for 99 plus weeks and can get no benefits. Upon those people are taking whatever jobs they can find. And so yoke the American people are sitting back, looking for an unemployment check. I think people want to work. I think what's more appalling is what it took to get that bill passed to make the moneys available, to reduce the Social Security, to increase the checks in terms of what the president was trying to do. . And that we would have lost helping four million people just because of the politics of the Republican party saying that we can't get this tax extension, we just don't care, we are gonna do it. I think that's what we should be looking at.

GLORIA PENNER: Tony?

PERRY: I'm with John all the way on this. I think this idea that unemployment insurance creates a lassitude or people sit around or lay around scratching their bellies not looking for work is bologna.

GLORIA PENNER: Even if you're told anecdotes about people?

PERRY: The anecdotes, those are about as credible as the welfare mother with the Cadillac and the fur coat. That's kind of where we're at here of we're working off stereotypes and class bigotry. No, in the over all, does it put a lot of money into the economy? I don't know, but it helps people make their mortgages. And I'm with John on this. I think there was an immorality to any concept of shutting off that. Everybody I know who's out of working wants to get back to work. That's one of the defining features of this country. We work longer, harder, and think life is supposed to be about work more than any other country in the world. The idea that we've got a whole class of people just laying around, scratching their bellies I think is bunk.

GLORIA PENNER: All right. But Bob Kittle, the extension will not help people who have run out of their 99 weeks of un. Employment benefits. So are those the ones that are really going to have to be scratching to get jobs now.

WARREN: Why yes, and not scratching their bellies.

GLORIA PENNER: No. He raised that, not me.

KITTLE: Yes, I understand. That was Tony's colorful analogy. But no, they fall out of the picture really in terms of the statistics, even. Because they're no longer required to look for work. I think if you've been out of work for 99 weeks, you might well become one of those people who've stopped looking. You know? So that's the real chronic, long-termed unemployed. And that's a significant number of people in the United States today.

GLORIA PENNER: Well, answer this for me, if you will: Why has it been declared then that the recession is over.

KITTLE: Well, it's an economist's definition of recession, which is two or more quarters of a shrinking economy. And when we got through that, and the economy began growing again, the official end to the recession was declared. And the economy has been growing at around two percent or so each quarter, sometimes a little more. The problem is that because of the shock that businesses have been through, and I don't buy the notion that they're sitting on their capital to make Barack Obama a one term president, but corporations, small and large, have become much more conservative about spending their capital. Of they feel uncertain about what the future holds, they know the high costs of labor, they're worried about Obama care imposing new costs on businesses and they are being cautious. And they're sitting on capital instead of buying new plants and equipment and hiring new workers.

GLORIA PENNER: That really brings me to the point that has been made many times by other people, and that is, unless people have adequate jobs, they are not gonna buy houses. And unless houses are being purchased, they're not going to be constructed. And if they're not being constructed, then our economy is going to suffer even more because the construction industry is going down the tubes. John, are San Diego incomes enough to keep the middle class vigorous, or are they declining into poverty.

WARREN: The San Diego income has never been enough to keep the middle class vigorous. People pay what we call a sunshine tax for being here in terms of how little they get. But let's look at another factor that's added to it. The number of foreclosures is expected to go up, not because of the banks this time, but people are still losing jobs and can't afford to make payments. And so that's very real. Let's not forget that the Kerner Commission in the late 60s, early 70s, said that in America where one's value is determined by what one does, to do nothing is to be nothing. So people are still judged by their jobs, and people who are unemployed want to work. But the economy has changed, and that's a big factor. I'm not saying we should try to create a job for everyone of but there should be some discussion about what we do we do now that the old economic models no longer pertain to the situation that we're in?

GLORIA PENNER: Let's look at the kinds of jobs, just briefly, that have become available. Surprisingly enough, it looks to me from what I read that education jobs have become available, and yet I thought that the schools were in terrible terrible trouble.

WARREN: The schools are in terrible trouble, but education jobs have become available because they drove out people who had benefits and long-term unemployment. The older teachers cost more than new hires. You can get two new hires for the price of a 20-year veteran. Then we have all of the cuts in terms of lay offs, so people have left an industry creating vacancies. That's an attrition factor. But it doesn't mean there's a resounding interest or philosophical support for education. It just means that there's a need that's been created by past conducted.

PERRY: What John pointed out a minute ago, and I will see him and raise him five. There has been sea change on what employers think of their non-labor union, non-contractual protected employees. And there's just a change in how the older employee is viewed, he's viewed as less productive and more expensive. Let's get rid of him. Let's get a cheaper employee, if any employee at all. And that's not a change that I think government can job own away. And one of the frustrations I think we have San Diego, or we have it in the whole state, is when government deals with the labor union contractually protected employees. You can't treat them the same way. And we keep spinning our wheels hoping this is a way that we can take away the protections they have, and treat them like private industry employees. And no one has found a way to break those contracts yet.

GLORIA PENNER: Before we leave this topic and go onto politics in 2010, I just want to raise this one thing. I read this in the San Diego business journal. It's San Diego's wealthiest, and apparently according to the business journal, they have been hit hard as well. Only about half of the 25 on the list three years ago are still there. And David Copley is gone, the list has shrunk to 20. And the cut off is $60 million. It used to be a hundred million. If you got on a list, you had to make a hundred million dollars or more. Now it's down it 60 million. So these are the wealthiest of the wealthy in San Diego. How significant is this, Bob Kittle?

KITTLE: Well, when we are talking about workers being out of a job for 99 weeks and losing their unemployment insurance, it's not significant at all. And a lot of our wealthy, to be candid, are widows. And time marches on, and they go away. But the list will replenish itself at some point.

GLORIA PENNER: Of these 20, only one is a woman.

KITTLE: Yes, but you notice that there are several that lost off the list. Yes. Different factor there. We have the retired rich or the widowed rich. We don't tend to have, Erwin Jacobs notwithstanding, the productive rich that are making their fortunes. So we're sort of always on the cusp of losing those numbers.

GLORIA PENNER: Well, that gentlemen, we are going to take ape short break, and then we're gonna come back, and we're gonna talk about the year in politics. This is the Editors' Roundtable. I'm Gloria Penner.