UCLA Forecasts More Pain for California

The Anderson Forecast, a pricey report available to members only – and the press – forecast a slow recovery for California that won’t begin for another year or more. It predicts as many as 60,000 government-wide job losses, and an unemployment rate as high as 12.1 percent before the turnaround begins.

The government job losses will come through attrition as well as layoffs, and includes education as well as state and local government. But 60,000 government jobs amount to 13.9 percent of the estimated 430,000 in California – a big hit.

Sacramento Bee coverage mentions the job losses. The Los Angeles Times highlights unemployment and the building slowdown.

While the national economy is showing signs of life – a slower rate of job losses and a slight uptick in consumer spending – California’s unemployment rate of 11 percent remains 2 percent higher than the U.S. rate of 9+ percent.

The Sacramento Bee quotes UCLA  senior economist Jerry Nickelsburg: “The non-governmental part of California is kind of working its way through [the recession]. The governmental part is still a mess.”

Since the “governmental part” ripples through so many parts of the state’s economy, the “mess” will cause a drag on California’s recovery.

We had a higher high during the boom, so I guess it makes sense that we’re having a lower low.

On the other hand, we wouldn’t have to make such draconian cuts if we were raising revenue – yes, tax increases – were on the table. Prop. 13 is an overripe target. More on that later.

Meanwhile, fasten your seat belts.

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