The monthly state job numbers released last Friday showed
a dramatic increase in payroll jobs in California. Payroll employment jumped by
96,500 jobs. This increase amounted to more than half of all jobs created
nationwide.
How real is this increase? What caused it? What have been
the causes of previous recoveries in California employment following major
recessions?
As San Francisco Chronicle business columnist Kathleen
Pender points
out, EDD does revise its payroll gains as it obtains additional payroll
information over the next month. For January, EDD initially estimated a gain of
12,500 jobs, but revised it down to 700 jobs. It may be that the 96,500 job
figure for February will be revised downward as fuller payroll information is
obtained.
Yet, there is evidence from several quarters that a
California employment recovery is underway. The job gains are not limited to
one or two sectors. Job gains are across all sectors, with only government
showing a net job loss (1200 jobs). Construction, which had been in free-fall
for the period 2008-2010, showed a job gain of 15,500 jobs over the month, and manufacturing continued its uptick, up
another 3600 jobs to a total of 1,250,800
jobs. Most telling, California’s staffing companies, who are closest to the
labor market, report increased job orders and hiring, in financial services,
information technology, and business services.
So what caused this recovery? No obvious candidates stand out. There was no
new government direct hiring program or major employment initiative. The state
budget deal has yet to be reached. No major employer announced it would be
hiring thousands or even hundreds of new employees.
Instead, the increased hiring has been due to individual
decisions by California’s more than one million private sector businesses with
employees. The great majority of these new hires have been in increments of
less than ten, usually in increments of one or two.
Indeed as we look at previous
major employment recoveries in California in 1983-84, 1994-95, and 2004-05, we find a similar dynamic in hiring. No public
sector hiring program, no major
employers, no single government project: Rather the recoveries were due to
decisions by tens of thousands of individual employers.
The business section of this
past Sunday’s San Francisco Chronicle also
contained a fascinating look at the revived
technology sector in San Francisco by staff writer, Casey Newton. After
reaching a high of 34,116 technology jobs in 2000, the sector dropped to 18,210
jobs in 2004, and has since climbed to 32,180 jobs. These jobs are not only in
the well-known tech firms, such as Twitter and Zynga, but also in the hundreds
of other tech start-ups in lofts in SoMa and Potrero Hill-most of which will
not survive, but which are now a part of turning around California’s economy.
***
Mr. Bruno Peguese, our disco expert, notes that as we speak
of turning around the battleship of the California economy, we might call on
Ms. Vicki Sue Robinson. Does anyone still remember Vicki Sue Robinson and her
hit, "Turn The Beat Around"
(click to see YouTube). Paging "Disco Stan" Moy.