California struggles with layoffs and joblessness

Washington Free Beacon:
Tens of thousands of workers in California have been impacted by permanent or temporary layoffs in the past six months alone, and despite the governor’s economic development efforts more than 1 million Californians remain unemployed.

A report released Wednesday by the rating agency Standard and Poor’s indicated the state’s finances were balanced, but questioned how sustainable the state’s recovery will be.

“California’s finances are roaring back,” the report stated. “History would suggest, however, that any fiscal renaissance will be temporary—the result of several favorable developments occurring simultaneously.”

The report indicates the state’s fiscal recovery was due to lowering its spending, not in earning higher revenues.

“A cruder characterization would be that the state is only better off now because it obtained voter consent to raise taxes in the midst of a long-lived bull market for equities. Once the tax increases expire, or if market sentiment turns bearish, the skeptic might assert that the state—along with its credit rating—is condemned to go off a fiscal cliff.”

The Golden State’s employment picture has improved and its unemployment rate is headed in the right direction. But at 7 percent, it is still higher than the national average, according to the U.S. Bureau of Labor Statistics.

The state’s U6, or total unemployment rate, is 15.8, the second highest in the country behind Nevada. U6 is an alternative measure of unemployment, which includes those who have given up looking for work and those who have taken part-time jobs even though they desire full-time employment.

According to the California Employment Development Department, 1.5 million jobs have been createdin the state since its recovery from the Great Recession began in February 2010. While an impressive number, 1.33 million Californians are still unemployed.
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One of the reasons the unemployment rate has dipped some is that thousands of people have left California for places like Texas and other states with lower taxes and fewer regulatory hurdles.  The Texas unemployment rate is below 5 percent.

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