The Class of 2007 has a lot to look forward to ““
economists expect jobs will actually be available when they
graduate.
The same cannot be said for last year’s graduates, and may
threaten this year’s graduates in their attempts to secure
employment after graduation. Sixty-three thousand Californian jobs
have vanished since August 2002. And though there are signs the
economy is improving, innovations in productivity are helping
companies cut costs by cutting employees.
In addition to there being fewer full-time employment
opportunities, high unemployment rates threaten the accessibility
of part-time employment.
“When you have a recession … you get people who are
unemployed coming down to compete for some of the jobs young adults
used to have,” said Stephen Levy, director of the Center for
Continuing Study of the California Economy.
For UCLA students trying to offset the soaring fees of education
““ University of California fees increased 30 percent this
summer ““ obtaining a part-time job could be that much more
difficult.
National unemployment has remained high since Sept. 11, 2001.
Despite reports that an economic recovery began in November 2001,
the national unemployment rate has unremittingly floated above 6
percent. Since January, 437,000 American jobs have disappeared.
With 1,157,000 unemployed, California is faring like the rest of
the country. Last month, the Employment Development Department
reported a slight drop in unemployment rates since July, from 6.7
to 6.6 percent. California’s stagnancy has widely been
attributed to the deflation of the high-tech industry. All of the
Bay area has faced high unemployment rates, with technology
saturated Santa Clara County retaining a noticeably high
unemployment rate of 7.9 percent in August.
High unemployment rates have constricted the flow of government
money, which during the high-tech boom flooded in via income taxes.
Last year, the state budget faced a $38 billion deficit; next
year’s deficit is already predicted to be about $8
billion.
One of the areas that has been hard hit by budget cuts was
public health services. County hospitals are grossly underfunded
and understaffed in the mission to serve the uninsured. But the
state’s remedy to this money shortage has become an enormous
tax on local businesses.
Adjustments to workers’ compensation have been crippling
businesses. Annual costs for the system, which has gotten heat all
summer, have more than tripled over the past eight years,
increasing from $9 billion to $29 billion.
Earlier this month, the state Legislature approved an overhaul
of the workers’ compensation program designed to slow the
growing cost to employers, as well as legislation that will require
most small businesses to provide health insurance for all
employees. Though supporters of the legislation argued that it
would save taxpayers $650 million-$1 billion annually, it is an
added cost for small businesses trying to survive in a money-short
atmosphere.
“They absolutely cannot afford all the mandates and
increased costs of doing business in California,” said Betty
Jo Toccoli, president of the California Small Business
Association.
The costs are also taking a toll on big-name businesses. Many
have moved major labor divisions to other states with lower
insurance premiums, or to Asia where they do not have to worry
about workers’ compensation at all. Costco Wholesale Corp.,
the nation’s largest wholesale retailer, is considering
moving much of its operations to another state. Though only
one-third of Costco employees are in California, they absorb 70
percent of the corporation’s workers’ compensation
cost, Costco Chief Executive Jim Sinegal told Reuters.
Willie Washington, a lobbyist for the California Manufacturers
and Technology Association, said that the workers’
compensation reform is incomplete, but that it should help bridle
runaway costs.
“I’m afraid our members will not be happy,”
Washington said. “They were looking for relief; this is cost
avoidance.”
The expectation among many economists is that as the state
continues to shed jobs, recent college graduates will find the job
market as unfriendly as businesses find California. During times of
a dry job market, recent college graduates often struggle the most
in finding employment because they lack the experience of many
others who are unemployed, and companies are unwilling to invest in
training new employees.
But some economists interpret state legislation and business
friendliness as variables for long-term economic success, not a
short-term recovery. At a time when the national economy is
shedding jobs just as fast as California ““ 93,000 jobs in
August ““ Levy said the California economy is dependent on a
turnaround in the national economy.
“California doesn’t stand out on unemployment or job
losses, but the nation stands out,” Levy said.
Many economists said that, just like any recovery, this will
take time. Tom Lieser, director of the Anderson Forecast at UCLA,
predicted the job market would significantly improve over the next
year. “But it is pretty hard to tell just what will happen,
it is surprisingly sluggish.”
Levy expects the economy to pick up in coming months, but said
there is no assurance it will improve the job market because
“we are faced with this jobless recovery.”