Local Unemployment Continues To Rise
Friday, July 23, 2010
Last month's unemployment figures came out this week and the job picture in San Diego County is not encouraging. We discuss the impact joblessness has had on our community and how the current situation is different from other times of high unemployment.
GLORIA PENNER (Host): Last month’s unemployment figures came out this week and the job picture in San Diego County is not encouraging. The unemployment rate has increased from – to ten and a half percent with an additional 1500 jobs lost in the county between May and June. So, John, that’s an increase of less than one-half of one percent. How significant is that?
JOHN WARREN (Editor/Publisher, San Diego Voice & Viewpoint): Well, it’s very significant when you start looking that the numbers really represent people. One of the things not mentioned there is that, for instance, in the construction industry, 8500 people lost jobs during this time period. Non-farm, 1200 people. The numbers keep going down and yet in the midst of this we have Comic-Con, the races, and we’re kind of taking off getting some benefit, a booster shot, if you will, in the leisure industry that’s bringing at least 2000 more jobs online. But government jobs were lost both here, and what is most significant is that California leads the nation now in terms of that same time period with 27,000 people unemployed or losing jobs between May and June. And that’s quite significant in terms of us being, you know, at the top of the pack.
PENNER: Well, before I turn to the rest of the editors, you know, this really is sad news and a lot of people are affected by it either personally or friends of theirs or members of the family or their kids who finally graduated and trying to get out and get a job and can’t. I’d like to hear from you and what your experience has been with the job hunting, so call us at 1-888-895-5727, 895-KPBS. Ricky, I think you were signaling me.
RICKY YOUNG (Government Editor, San Diego Union-Tribune): Gloria, I feel like we were just having this conversation where John was a little down and I was a little up, so I’m going to mention the good things.
YOUNG: We had some increase in manufacturing jobs, which is something, you know, steadier and more to be hoped for than some of the others. And when you look at that number in terms of California leading the nation in terms of job losses, you know, that’s – part of that is just a factor of population. You know, the number three state was Tennessee where, you know, a loss of 22,000 jobs has a much, much higher impact. You know, so there’s that. And then, you know, not to forget, they did finally pass an extension of unemployment out of Washington this week and, you know, that should bring some relief.
PENNER: Well, some relief until November, Andrew, isn’t that true? And if we don’t see job growth—I’m going to temper Ricky a little bit—if we don’t see job growth after November, what are the chances that we’re going to see another extension of unemployment benefits again?
ANDREW DONOHUE (Editor, voiceofsandiego.org): Well, I believe I read just the other day that if you – that Congress has actually never not extended those unemployment benefits during a recession if unemployment is above 7.4% so I would say that there’s a pretty good chance that they’ll keep doing that.
PENNER: Oh, well – Well, good. Then you’re – If not as optimistic as Ricky, at least on that regard you are.
DONOHUE: Yes, I am. And now the other thing is I guess there’s a difference if, you know, if Republicans do take Congress, then we’re going to have a whole different dynamic.
PENNER: That’s true. Let me ask you about this, John. In terms of real numbers, the state Employment Development Department estimates that almost 165,000 San Diego County residents are now unemployed—165,000. So when you’re out and about in the community, how do you see this job loss reflected?
WARREN: It’s reflected in a number of ways. For instance, if you go into the banks, you don’t see lines that you used to see. If you’re in the, say, a community grocery store on the weekend, you don’t see the number of people shopping, you don’t see the number of people in local businesses. You will still see traffic in the mall in terms of – in the malls in terms of the weekend but even the traffic itself on the streets is not as heavy in many instances. And so people are holding back whether unemployed or actually with dollars, they’re not spending at the same level, they’re not moving around, and merchants are complaining. As you talk to them, they’re saying, you know, what happened? It’s so sudden and we didn’t have a chance to prepare for it. And so that’s where it really goes beyond the numbers when you get to that kind of personal contact.
PENNER: Well, there’s a good side to this and a bad side. The good side is that, you know, people are tending to save more because they are concerned about having enough money to last them, especially if they’re worried about their jobs or if they’re heading for retirement. They want to be sure they have something. But on the other hand, when you save, the money is not in the economy and you don’t see a stimulation to the marketplace out there.
WARREN: Well, there’s also a good piece to the unemployment bill that was passed and I guess the president’s going to sign it right away. It’s retroactive to June so that’s going to cover 2.5 million people here. That’s going to make a big difference. And one of the downsides is the compromises that were made in terms of losing the health insurance, the piece that many of the unemployed people had to continue with their employers. And also, I guess most disturbing to us locally is where the support came from. When we – It was strictly down party lines. The Democrats, you know, Barbara Boxer, they voted for this bill, and yet in Congress we had Eisner (sic), Duncan Hunter and Bilbray just voting against it and a big point made about the fact that Carly Fiorina said she wouldn’t have voted for it.
PENNER: Okay, our number again is 1-888-895-5727. We got those rather discouraging numbers coming out in the last unemployment report. I’d like to get your reaction to that and have you tell me whether you think this is just a blip, a negative blip, and then we’re going to see it all come back very soon or whether this is really the beginning of what, I think it was, Mr. Bernanke said, an usually difficult period. I’m not quite sure those were his words but paraphrased. Ricky, I remember during one of the more recent recessions that the small businesses started to be the engine that kind of drove the economy. A lot of people who had lost their jobs began businesses in their garages or at home. And I’m wondering whether we are seeing any of that now, whether something’s being done to help small business?
YOUNG: Oh, there’s – Yeah, there’s all sorts of efforts to prop up small businesses and other entrepreneurial ways that people might get through these difficult times. One – Another good thing about this unemployment bill that just passed, in addition to John mentioning that it’s retroactive to June, is it also fixes a problem where when somebody takes a part time or temporary gig or gets some income, as you say, with a small business or what have you, that doesn’t then lower – you know, they don’t give up the unemployment benefits they had for a job that was maybe higher paying. That was sort of a loophole discouraging people from taking what they could get and they’ve kind of closed that loophole with this latest round.
PENNER: That’s Ricky Young. He’s a watchdog editor for the San Diego Union-Tribune. Andrew?
DONOHUE: Yeah, we’re actually seeing more start-ups start up here in San Diego, which is a very big and important part of our local economy. A lot of people, like you said, who may have been laid off at another company who finally took this as the opportunity to actually start their own company because, frankly, they didn’t have any other options.
PENNER: Yeah, we were sort of thought of as the incubator city for a while there. And some of our community colleges were doing their best to foster these kinds of incubators and it turned out to be a positive thing. I’m just wondering if we’re seeing the same kind of positive thing this time around, John?
WARREN: Well, you know, a lot has to do with what you look at. I mean, this week the papers reported that bankruptcy filings for small businesses are up in San Diego County and not all of them are filing to dissolve their businesses, many are reorganizing in terms of making debt payment plans. But that’s very significant that at the same time the foreclosures are now going down in the region that those filings are up, and that impacts this very group that we’re talking about that have been, you know, a real driving engine in the past in terms of regenerating the economy.
PENNER: Okay, let’s turn to our listeners and see what they have to say. We’ll start with Andrew in North County. Andrew, you’re on with the editors. Welcome.
ANDREW (Caller, North County): Hi, good morning.
PENNER: Good morning.
ANDREW: Yeah, I’d just like to say I’m a construction contractor here in North County and things have just gotten worse. I’ve seen a lot of friends, general contractors, go out of business. The California State License Board is currently – you have to have a bond for you – for you to have your contractor’s license, a kind of prerequisite to having a contractor’s license and now they’re doing credit checks on everybody and which is – now you used to pay like $250 a year for a three-year security bond, now with the credit checks, they’re charging up to, you know, $1300 just to have your license active for one year. And, you know, right now with the economy everybody has, well, most people I know, their credit is not so good because the work’s not there.
PENNER: Whoa, that sounds like you’re getting it at both ends. Thank you so much, Andrew. What about that, John? I mean, are we seeing that we’re an unfriendly environment for businesses that are struggling at this moment?
WARREN: Well, it seems to be a pattern in the culture and it’s being discussed more widely that when money is tight and times are difficult, there are those that will seek to benefit from it. Remember, the state of California has a $19 billion deficit and it’s looking in every direction and, unfortunately, this is a perfect example of one part working against the other, instead of helping to make it available for people to get the work, making it more difficult.
PENNER: Well, Andrew, it’s interesting that the other Andrew should talk about the construction industry. Can we expect to see that turning around, let’s say, in the city of San Diego as the move to build large downtown public projects gains momentum?
DONOHUE: Well, that’s certainly one sector that will definitely be booming if city hall gets its way. Like we’ll talk about in a little bit, there’s plans afoot to build the new city hall, the library perhaps, convention center perhaps, Chargers stadium. So, yes, but in the residential market, not at all. I mean, we have so much inventory out there that’s really flooding the market and then you also have banks essentially holding onto properties that should be or otherwise would be going into foreclosure but they very much understand what that would be doing to the market right now so there is this sort of shadow inventory that we call it that’s just looming right there.
PENNER: Okay, but, Ricky, those jobs for the public projects, will those go to local workers or will companies recruit from outside San Diego? Can we expect San Diegans to benefit from public projects taking place in San Diego?
YOUNG: I do remember some discussion at the council of trying to ensure that the jobs would be local. I don’t know. Andrew might remember whether they went through with that but that’s my recollection. In terms of Andrew on the phone, he’s right. Construction jobs are down. In the latest report 3,000 out of the 13,000 jobs lost in San Diego County were in construction. The brighter spots were education and health services where jobs are up, and professional and business services where jobs were up.
PENNER: Okay, well, what we’re going to do is, we’re going to talk more about that and also talk about government jobs, which I think is important. We’ll take the phone calls from our listeners who want to get in on the discussion and have some really interesting things to say when we return. We’re going to take a short break now. This is the Editors Roundtable. Our number is 1-888-895-5727, 895-KPBS. You still have time to get in on this segment of the conversation. I’m Gloria Penner.
PENNER: I’m Gloria Penner. This is the Editors Roundtable and we’re talking about jobs in San Diego for the next couple of minutes. At the roundtable with me is Andrew Donohue from voiceofsandiego.org and we also have John Warren from San Diego Voice & Viewpoint and from the Union-Tribune, we have Ricky Young. And so what we’re talking about now is the fact that what kind of protection, and I think this is the issue that’s kind of disappointing, what kind of protection is San Diego’s job market getting from our affiliation with the military and the defense industry? John, this was our big protective layer in years past.
WARREN: Well, I haven’t – in the past we’ve thought of it as protection and we had great concerns when we had people, you know, deployed or moved from here to other areas but I guess in the past 10 years we’ve had such a change in terms of biotech and other entities coming in that we’re – we’re not military dependent as we once were. So I don’t see the military withdrawing any more people. If anything, there are more people scheduled to come into the San Diego area but that’s not going to help us with the problems right now because the military have their own housing and they have already been expanding and building to accommodate this new population.
PENNER: So those dollars aren’t driven into the local economy.
WARREN: They’re not driven into the local housing market, I don’t believe. Some – There is some spillover but not enough to deal with the inventory factor that Andrew mentioned.
PENNER: Okay, let’s hear now from Frank in El Cajon. Frank, you’re on with the editors.
FRANK (Caller, El Cajon): Good morning, Gloria.
PENNER: Good morning.
FRANK: I was just wondering why we we’re worried about the unemployed because we have Republican members of Congress telling them – telling us that they enjoy being unemployed, somehow they like to get laid off and get that wonderful unemployment compensation in lieu of their employment benefits.
PENNER: Uh, tongue in cheek, Frank?
FRANK: Yes, of course.
PENNER: Oh, okay, well, hey, I’m not going to stop the editors from commenting on it. Andrew?
DONOHUE: Well, it’s – what’s interesting is we talked a lot about this last week, is the County of San Diego here very locally passed up the opportunity to bring tens of millions of dollars into the local economy and to give temporary jobs to the local unemployed and they passed on that, so that was actually something that was championed by Republicans and Democrats in Congress, was basically a given that it was sort of a bipartisan solution to a lot of these problems and here locally we decided to pass up on that.
PENNER: Okay, so last point that I think we should make, Rickey, you might be thinking about this, looking at the sluggish job market one analyst said the large battleship we call the California economy is taking a long time to turn around. What do you see as the signs that this battleship is turning in the right direction or at all?
YOUNG: Well, I mean, clearly he’s right. We’re idling a little bit. We have state unemployment down, county unemployment up. And I think we’re just in a time where we’re lurching a little bit and I’m hopeful we end up going in the right direction.
PENNER: Okay, final comment, John.
WARREN: Well, I don’t see a change. I mean, all of the discussion going back to Bernanke, everyone is making the observation, is going to take a year or two. The jobs are not there. The jobs are not being created on the same scale that they have been in the past. I do anticipate we will have another stimulus or extension and I think it’s important to note, and finally, that we’ve spent over $136 billion, equivalent to the amount of funding one year of the Iraq-Afghanistan war on unemployment and we still don’t really see a change coming.
PENNER: Okay. Thank you. And with that, gentlemen, we are going to move off to a different, kind of related topic.
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