California's deeply troubled labor market took another hit in August as employers laid off more workers than expected, renewing fears that the state's economic recovery has stalled.
Employers cut 33,500 jobs, marking the third straight month of losses and pushing the state's unemployment rate to 12.4%, up from 12.3% in July, according to data released Friday by the Employment Development Department. California has lost 113,100 jobs since August 2009.
FOR THE RECORD:
Jobs report: An article in the Sept. 18 Section A on the latest California jobless report identified Sung Won Sohn as a professor at UC Channel Islands. The university is Cal State Channel Islands.
Last month's losses were widespread, hitting almost all sectors, including construction, manufacturing, financial services, leisure and hospitality, trade, transportation and utilities. Government was the biggest loser, shedding 9,200 jobs, most of them temporary census positions.
"The thing that is disconcerting is that we have lost jobs in virtually every industry," said Sung Won Sohn, an economist and UC Channel Islands professor. "At this stage of an economic recovery, we should be doing much better."
California has one of the highest unemployment rates in the country, well above the national rate of 9.6%.
The deteriorating job market is bad news for the Golden State's 2.3 million unemployed workers. Almost 1 million of them have been jobless for more than six months. And nearly 200,000 have exhausted their unemployment benefits, which last up to 99 weeks.
Some of the unemployed — discouraged or depressed — have quit looking for work. About 926,000 such Californians who are no longer counted as unemployed said they want a job, according to the most recent state government figures. Some are going back to school or retraining for other careers. Others are retiring early or applying for disability insurance.
California's labor force participation rate, which measures the percentage of the population working or actively seeking a job, fell to 64.2% in July from 66% in July 2008. Economists said that's a worrisome decline that could hurt the state's productivity down the road.
"When the economy turns south, people exit the labor market," said Mary Daly, a vice president at the Federal Reserve Bank of San Francisco who has studied the trend. "They search and search and don't find anything, so they just stop looking for work."
Applications to the Social Security disability insurance program are projected to reach 3.3 million in the 2010 fiscal year, a 27% jump from 2008, according to Mark Hinkle, a spokesman for the agency. In California, applications increased to 287,000 in the 2009 fiscal year, up 12% from the year before.
"As the economy has gotten worse, the applications have gone up at a pretty steady correlation," said Social Security Commissioner Michael Astrue.
Mark Allen Jr., 29, lost his job at a mortuary in downtown Los Angeles in April and has been unable find new employment. His car was repossessed two weeks ago and he's barely making his rent. Allen said he had been battling medical problems for a few years. After consulting a lawyer, he's now in the process of applying for disability benefits.
"It's absolutely a last resort," he said. "I really don't know where to turn before I am totally out on the street."
Other unemployed workers are going back to school. Community colleges throughout the state are experiencing "unprecedented demand," said Paige Marlatt Dorr, a spokeswoman for California Community Colleges, the largest higher education system in the nation.
But because of funding cuts, campuses had to turn away 140,000 students in the 2009-10 school year, she said.
Rosemead resident Queenie Luc, 52, is studying commercial and medical billing at Los Angeles City College. She lost her job in 2008 when the garment factory that she managed closed.
"I just want to finish so I can find a job," Luc said.
But so far, California employers have shown little confidence in the strength of the economic recovery.
"Businesses are still really cautious and are taking a wait-and-see attitude," said Jerry Nickelsburg, senior economist at the UCLA Anderson Forecast.
Los Angeles County lost 12,800 jobs in August as the unemployment rate rose to 12.6% from a revised 12.4% in July. Manufacturing, information and government experienced significant job losses. But construction and professional and business services gained jobs.
Orange County's unemployment rate fell to 9.6% in August, from a revised 9.9% in July. The county lost 2,300 jobs, with the biggest losses in government, educational and health services and trade.
In the Riverside- San Bernardino metro area, the unemployment rate fell to 14.8% from a revised 15.1% in July. Job losses were modest, with payrolls down by only 100 positions. Still, that area has lost 22,700 jobs over the last year.
San Diego County lost 2,200 jobs in August, and its unemployment rate dropped to 10.6% from a revised 10.9% in July. Ventura County added 500 jobs as its unemployment rate fell slightly to 11.2% from 11.3% the month before.
Cristina Molinari, 60, has been out of work since July 2008 and ran out of benefits in April. The Woodland Hills resident worries that because of her age no one will hire her. A onetime computer programmer, she says she has been told that her skills are outdated, or, alternatively, that she's overqualified.
She recently called the Social Security Administration to inquire about receiving benefits early. They said she was too young for Social Security but recommended she apply for disability insurance.
"It's ironic that I'm too young for that. Because as far as the job market, I'm too old to be hired," she said. "It's pretty tough."