Author: Michael Bernick

EDD released its “benchmarking” of 2009 payroll employment recently, and the results were dramatic. The monthly payroll surveys had indicated that payroll jobs declined during 2009 by 579,836 jobs. However, a fuller review of payroll data by EDD indicated the true job loss was 818,400 jobs—an additional 338,000 jobs lost. .

Taking this recent information, the chart below shows the payroll job numbers in California by sector in December 2006 and in December 2009—a period in which the state payroll jobs decreased by 1,400,000 jobs.

In the Spring of 1975 as a graduate student at Oxford University, I took the train to London one Saturday to attend a session of national Labor Party officials. Michael Foot, was the national Employment Secretary at the time in the Labor government of Harold Wilson, and one of the main speakers.

I thought of this Saturday long ago as I read that Michael Foot died Wednesday at the age of 96. I don’t recall anything of that session other than Foot’s oratory. He was a brilliant orator, as even his many opponents in the Labor Party, such as Dennis Healy, acknowledged. At one point in he declaimed of an initiative he regarded as misdirected, “Do men gather grapes of thorns or figs of thistles”. Indeed.

Foot had a lengthy career in government and politics, starting in 1934 when he joined the Labor Party. He served in Parliament from 1945 to 1955, and later from 1960 through 1992. He actually led the Labor Party from 1980 through 1983, when he lost in a landslide to Margaret Thatcher and was replaced by Neil Kinnock.

One of the most significant but least-recognized parts of California employment is the workforce in California’s skilled nursing facilities. There are around 1300 licensed skilled nursing facilities in the state, employing more than 130,000 workers at the end of 2009. This skilled nursing facility workforce is one of the few sectors in California that has been growing in recent years and is projected for continued employment growth.

Nobody knows more about this workforce and how it has developed since the 1970s than Ken Merchant. For several years, Ken was the director of education and training for the California Association of Health Facilities (CAHF) , the main association representing long term care employers. Since 2005, Ken has been working with local Workforce Investment Boards, employers and unions to train new Certified Nurse Assistants (CNAs) and assist incumbent CNAs to higher-paying positions in the industry. Recently, I was able to sit down in Sacramento with Ken and get his thoughts on the present skilled nursing facility workforce, the growth in number of employees and wages, and the opportunities for career mobility within the industry.

I miss Bob Marr, and I think about him during the current discussions of state public sector employees.

Bob worked at the state Employment Development Department (EDD) from 1964 until a few months before his death in May 2005. Bob was a state employee for over 40 years.

I met Bob in 1982 when I was heading a community job training agency, the San Francisco Renaissance Center. Bob worked with then-Director Kaye Kiddoo on job training initiatives. Bob and I corresponded on job training issues over the next 16 years, until I became EDD Director in early 1999.

Bob was the opposite of a nine-to-five man. You could find him in the Department at all hours. For many years he worked on a manual typewriter, and only in the late 1990s converted to a computer. Bob knew every job training and job creation program since 1964, and the lessons they could yield for practitioners and policy makers.

One little-recognized impact of this Great Recession is the hastening of California’s next retraining economy.

For years, even before the Recession, there was enormous movement, resembling Brownian motion, of California workers among jobs. In the 1990s and early 2000s when the economy was running well, and unemployment below 6%, the number of job turnovers, of hirings and separations, totaled over 40% of total employment per year in California, as elsewhere in the United States.

What has changed in the Recession is the shift from movement due to voluntary job changes (“quits” in Bureau of Labor Statistics terms) to movement due to job layoffs/discharges. Nationwide, the quit level, the measure of workers’ willingness to change jobs, was 1.8 million in September 2009, 43% lower than its peak in December 2006. At the same time, the discharge level for September 2009 was 2.1 million, 35% higher than its trough in January 2006.

In the depths of any major recession, it appears to job seekers and others concerned about unemployment, that the economic malaise will never lift, that hiring will never pick up, that job openings will never materialize. But hiring does pick up, as it did in our previous major California recessions in the early 1980s and early 1990s, and as it will in this Great Recession, beginning in 2010.

Chelm was the mythical village of East European Jews, the subject of Jewish folklore and humor. Irving Howe drew on one of the Chelm tales for the epigraph to his collection of essays published in 1966, Steady Work .

Once in Chelm, the mythical village of the East European Jews, a man was appointed to sit at the village gate and wait for the coming of the Messiah. He complained to the village elders that his pay was too low. ‘You are right’, they said to him, ‘The pay is low. But consider: the work is steady.’

Today, with nearly 2.3 million Californians unemployed, any work is attractive—steady or not. However, even today, the California labor market remains highly volatile, with workers moving in and out of jobs with surprising frequency. In previous posts I have discussed the amazing job creation and destruction numbers for California—even in a month that the unemployment rate moves only slightly, over 200,000 jobs are being created and another 200,000 jobs are being destroyed. Almost equally amazing are the numbers regarding the movement among workers in existing jobs.

Lost in the avalanche of bad news this Fall about the state budget is the recent fund estimate for California’s Unemployment Insurance (UI) Fund. In its October report, EDD projected the fund to have a deficit of $7.4 billion by the end of 2009, growing to $18.4 billion by the end of 2010, and an amazing $27 billion deficit by the end of 2011.

What does this mean? Should employers, employees or current UI recipients be worried? What options does the state have?

The condition of the fund is shown in the chart compiled by EDD below, and contained in EDD’s October UI Fund Balance report. The full report can be accessed at EDD’s website, www.edd.ca.gov.

“A firebell in the night”: that’s how Ken Auletta described the growing class of persons on welfare in America’s inner cities in his 1982 book, The Underclass.

Auletta’s view, held by many policymakers in California at the time, was that a new class of poor people was emerging, different from the poor of the past. This new group, which Auletta termed the underclass, was becoming more and more entrenched in antisocial behaviors—crime, teen pregnancy, drug addition, and most of all welfare dependency. Auletta saw the underclass as “the most momentous story in America”, and quoted Thomas Jefferson’s description of the Missouri Compromise (“like a firebell in the night”).

In a post two months ago on the San Francisco Renaissance Center, I discussed the job training and antipoverty world of the 1980s in California, and briefly mentioned the ways that conditions have improved since 1979. Among these is the work-orientation of the welfare system and drop in the state’s welfare rolls. It is worth saying a word more on this change, and what its meaning for state government.