California reported its job numbers on Friday, and once again it was not good news. Although total California employment in January “rose” to 15.905 million people, this is only because December was revised down from 15.945 million to 15.878 million people. And November was revised downwards also. Thus, a full three years after the peak of employment in California and the ensuing jobs crash, total employment in the state has made no recovery at all. Worse, these levels are lower by more than 250,000 from 10 years ago. | see: California Employment in Millions (seasonally adjusted) 2000-2011.
The mythology of an economic recovery in the United States faces no lack of challenge, from the facts. However, that the country’s largest state (and economy) remains in a fiscal emergency, indebted to Washington for billions in unemployment costs, with no jobs growth, should be a cautionary tale to those who insist a national recovery is underway, or is sustainable. Moreover, that food stamp growth rates in big the big counties of Los Angeles, Riverside, and San Bernardino continue to advance is a sign that a new problem is now appearing on the horizon: loss of purchasing power in the face of rising food and energy costs. To boot: these intractable, not-improving conditions were already in play in the second half of 2010—before the spike in oil to even higher levels.
California remains one of several US States that is extremely sensitive to oil prices. While it’s true that the power sector has made great gains in efficiency over 25 years, the state’s over-exposure to roads and highways and under-exposure to public transit means that costs skyrocket for both State and City governments and middle to lower income groups when oil rises. Commutes in California for workers, and total road maintenance costs, are among the most onerous in the nation. Moreover, California’s gasoline prices are always among the highest due to its Pacific orientation (not linked to Gulf Coast oil imports and refining), and these become embedded quickly into consumer prices. Economists often acknowledge that recessions trigger more easily when vulnerable systems are shocked. Can there be any doubt what the 2011 oil spike will do to California?
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