Author: Michael Bernick

The state Employment Development Department’s Labor Market Information Division (LMID) has a wealth of data on employment in California (www.labormarketinfo.edd.ca.gov) . LMID is a starting point for most employment issues, including the current construction employment meltdown, and the impacts of transportation, infrastructure and other public works projects.

The numbers on construction employment are striking. In December 2006 California had 937,000 construction jobs. Over the past 30 months that number has steadily declined, so that the state was down to 642.000 construction jobs in June 2009.

The more revealing LMID numbers are in the sub-sectors. LMID divides construction employment into three main subsectors: (i) “Construction of Buildings” (residential and commercial buildings) (ii)“Specialty Trade Contractors” (building equipment contractors, building foundation, finishing and exterior contractors) and (iii) “Heavy and Civil Engineering Construction” (the public works jobs). Although it is often thought that most construction jobs are in public works, this is the smallest of the three sub-sectors by wide margin.

One of the least recognized employment dynamics in California is the enormous job creation and destruction that occurs reach month, in good times and bad. The monthly unemployment rate states the net number of job gains or losses, which usually number in the tens of thousands. But beneath the surface, each month hundreds of thousands of jobs are being added or subtracted.

For example. for the three months of January-March 2008, the state lost 86,698 jobs according to the net monthly employment numbers. In fact, during this three-month period, 883,486 jobs were added and 970,184 were destroyed, for a net of -86.698.

What has been happening to job creation/destruction during the current recession?

The job creation/destruction numbers are generated by the United States Bureau of Labor Statistics, and the most recent numbers are for the third quarter of 2008, the months of July, August and September. This was a period when job layoffs were starting to pick up force, but before the enormous job shedding of the period October 2008-February 2009.

The latest state unemployment numbers were released last Friday, July 17. The unemployment rate stayed at 11.6%, consistent with the revised 11.6% rate for May. However, as usual, the key indicators of California’s employment situation were elsewhere: in the nonfarm payroll numbers, the sector breakdowns, and the breakdowns by counties. These all showed a state economy that is dead-in-the-water relative to hiring.

Here are the 5 key points:

1. Hiring in California has not turned around, and net job losses continue to mount: Between November 2008 and February 2009, the state saw widespread job shedding. In February 2009, alone, the state lost 119,000 jobs. In March, the net job loss was 62,100, suggesting that we may have begun to turn the corner. The last three months, though, job losses have increased, rather than decreased, and June showed a net loss of 66,500 jobs.