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Richard Rider

CA unemployment rate plummets, but no increase in jobs. Huh??

Good news!  California’s unemployment rate dropped significantly in September, from 6.1% to 5.9% — while the nation’s unemployment rate remained stable at 5.1%.  The bad news?  No increase in the number of CA jobs.

Okay, okay — I exaggerated a bit to make a point.  Actually the number of CA jobs DID increase in September — but by only 8,200 jobs.  That’s a lot of jobs — until you consider that we have a whopping 39,000,000 people in the Golden State. That’s FAR less job growth than the number needed to handle our modestly increasing state population.

August was a mediocre month for CA, yet it produced 42,000 jobs.  Oddly enough, in September with far fewer net new jobs, the state unemployment rate took a pleasant drop.

By now my readers should know how this drop comes to pass.  It’s not from significantly increasing employment — it’s from people dropping out of the workforce — fewer and fewer people looking for any kind of work.  Do the math, and the PERCENT unemployed drops.

Fewer people working means less goods and services being created domestically, and eventually higher taxes for those still gainfully employed.  Not good.

My county of San Diego is doing quite well relative to the state.  Our county of 3.2 million people is down to 4.6% unemployment, with a September increase in jobs totaling about 5,700.  Thus with 8.2% of the state’s population, San Diego County produced 69.5% of ALL the state’s net new jobs.  Great for San Diego — sucks for most of the rest of the state.

But even in San Diego, most of the improvement in the unemployment percentage is due to the folks dropping out of the workforce — giving up or retiring.  Still, we’ll be happy with such positive news.

One other point to keep in mind:  If you are employed for ONE HOUR a week, you are counted in the “employed” category.  And we have significantly more people working part-time than in the last decade.