The Housing Chronicles Blog: Unemployment spikes in California, Oregon and Nevada

Friday, March 20, 2009

Unemployment spikes in California, Oregon and Nevada

Job losses continued to mount in not just California in February (to 10.5% unemployment), but also rose in Nevada and Oregon to 20-year highs. First, from a Bloomberg News story:

California’s jobless rate surged in February to the highest level since 1983 while unemployment in Oregon and Nevada climbed above 10 percent for the first time in more than two decades.

Unemployment in California rose to 10.5 percent from 10.1 percent in January, its Employment Development Department reported today in Sacramento. Neighboring Oregon’s jobless rate rose a full percentage point to 10.8 percent, and Nevada’s increased to 10.1 percent.

“The West Coast is more heavily dependent on real estate and the decline there has been more pronounced” than in the rest of the U.S., said Sung Won-Sohn, an economics professor at California State University-Channel Islands in Camarillo, California. “We are not seeing any signs of stabilization in the job market.”

Unemployment across the nation may top 9 percent by the end of the year, according to economists surveyed by Bloomberg, and it could go higher. The national jobless rate rose to 8.1 last month, the highest in more than a quarter century, and the economy has lost 4.4 million jobs since the recession began in December 2007...

Meanwhile, on Monday California legislators in the Assembly couldn't muster the votes required to approve a provision that would have extended unemployment benefits by another 20 weeks. For many people, the benefits they now receive as a result of the last federal stimulus package will expire in mid-April, but if they take federal funds this time they'd have to adjust the law so part-time and seasonal employees would also be eligible, which would drive up unemployment taxes for employers.

Instead of doing nothing, why don't they just make the change in the unemployment law temporary like other states have done? Too obvious of a solution? From the L.A. Times:

After an hours-long partisan debate, Republicans in the state Assembly on Monday defeated a bill that would have authorized spending more than $2.5 billion in federal stimulus money to provide 20 weeks of extra unemployment benefits.

The bill would have provided extended benefits this year to an estimated 260,000 jobless Californians, including 74,000 whose unemployment checks are due to run out April 12. They are now eligible for up to 59 weeks of benefits...

Many Republicans said they voted no because they wanted more time to analyze the measure to make sure that it would not cost California taxpayers any money.

Democrats countered that the proposal by Assemblyman Joe Coto (D-San Jose) had to be rushed through the Assembly and the state Senate and to Gov. Arnold Schwarzenegger in time to meet next month's deadline, when about a fourth of the state's chronically unemployed are scheduled to lose benefits...

The California Chamber of Commerce and other business organizations have questioned whether increased eligibility might raise costs for employers by eventually forcing a hike in payroll taxes.

Assembly Democrats said they would bring the unemployment bill back up for another vote soon.

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