The state job numbers announced last Friday showed a net
payroll job gain of 12,500 jobs. This is not a lot compared to total California payroll jobs of
nearly 14 million. However, this job gain constituted nearly 20% of the 63,000
net payroll jobs added throughout the entire United States.
We are likely on the road back to payroll job growth in
California, though it will be a long and winding road, given the extent of
payroll job losses since 2006 of over 1.4 million payroll jobs, and the
obstacles ahead. Beginning on the plus side, several sectors that have been
struggling showed growth, particularly construction and manufacturing.
showed a monthly net job gain of
nearly 18,000 jobs, from 550,300 jobs to 568,100 jobs. We’ll see if this is
more than a one or two month phenomenon. However, it is a departure from the almost
constant job losses in construction since December 2006, when the state had
over 937,000 construction payroll jobs.
Manufacturing showed a
monthly job gain of 1000 jobs (and a 4700 job gain over the year). Again this
is very modest in terms of the 1,246,400 total manufacturing jobs in California
in January. It shows, though, that manufacturing is far from extinct in
California, and is holding its own.
Over this past weekend, a number of economists have spoken
of the snowball effect, that once hiring starts it will develop its own
momentum, and the job gains will jump significantly. Perhaps. Certainly,
employer confidence is the key element in the job growth level. However, there
are a number of obstacles that can slow payroll job growth in 2011 and 2012.
The most obvious is oil prices. The
events in the Middle East during the past month underscore the soundness of the
state’s investment in alternative energy, including for the jobs generated. However, oil price
increases, depending on their extent, can depress the consumer spending at the
center of the California economy.
Beyond the oil prices are California’s state and local
government budget shortfalls. The Los Angeles Chamber of Commerce and Bay Area
Council last week lent support to Governor Brown’s budget approach and call for
a June vote on taxes. For their employers, job growth is a balancing
act between reigning in government costs and an economy of cuts and scarcity.
However, business group support has not yet translated into even legislative
approval of the vote, at this writing.
Further, there is the wild card of technology job
loss/gain. As I have noted from time to
time in previous postings, the past fifty years in California have been a
history of technology eliminating jobs, but also creating an equal or larger
number of jobs. This may well happen in
the next few years. All we know now is that in retail, financial services,
health care, and other sectors, technology has restructured service delivery,
and eliminated jobs, that will not return even after the Great Recession.
So let’s leave the final
word to Paul and yes, John, Ringo and George. Here, from YouTube, is a memorable recording of "The Long and
Winding Road", with orchestration by Phil Spector.