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Sept. 11 May Cost State 263,700 Jobs

Economy: Milken Institute says most of the cuts will be from travel-related firms. Makers of TV ads and aircraft are also likely to suffer.

November 07, 2001|STUART SILVERSTEIN | TIMES STAFF WRITER

California is likely to lose 263,700 jobs by mid-2002 because of the economic fallout of the Sept.11 terror attacks, a think tank forecast Tuesday.

The Santa Monica-based Milken Institute said the job losses could rise to 400,000 positions if consumer and business spending remains depressed for an extended period.

Most of the job losses under either scenario would come in travel-related industries, according to the institute's report. Other fields likely to suffer job losses related to the terror attacks include aircraft manufacturing and radio and TV commercial production, the Milken economists said.

The forecast is an outgrowth of research the institute completed last week for the Economic Impact Task Force of the city of Los Angeles. The task force reported then that Los Angeles County is likely to lose 76,000 jobs and could lose as many as 110,000, in the aftermath of Sept. 11.

Separately, Milken researchers on Tuesday also provided some upbeat news about the state's future. In its annual assessment of the states most likely to benefit from new technologies, the institute found that California ranks second only to Massachusetts.

The institute, in its "New Economy Index," ranked Massachusetts No. 1 because of the state's research facilities, highly educated population and venture capital investments.

California scored high in such categories as patents issued, exports, business starts and venture capital investment.

Massachusetts and California also finished first and second among the 50 states last year.

"Some people have given up on the new economy because of so many dot-com failures and the implosion of tech stock valuations," said Ross DeVol, director of regional and demographic studies for the Milken Institute. "That's a big mistake. The Internet and technology will continue to improve productivity, and those regions that can take advantage of high-tech will be rewarded."

One of the biggest gainers in the New Economy Index was Texas, which moved up to 12th place in 2001 from 16th the year before, largely because of fresh development in research and development facilities in the state.

The biggest decline was posted by New Mexico, which dropped from 10th to 21st place as a result of an inferior track record in commercializing research conducted in the state.

Tuesday's reports were released in connection with the Milken Institute's annual California State of the State Conference.

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