California: State of Emergency Over Unemployment

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California: State of Emergency Over Unemployment

With job losses mounting and social pressures growing, California Gov. Arnold Schwarzenegger declared a state of emergency on April 17.

“I find that conditions of extreme peril to the safety of persons and property exist in California caused by the current and continuing economic downturn and resulting unemployment in California,” Governor Schwarzenegger said in his “Unemployment Proclamation.” He added that the magnitude of the economic downturn and resulting unemployment were out of the control of the services, personnel, equipment and facilities of any single city and/or county and required the combined forces of an entire region or regions to combat.

The latest unemployment figures show that conditions in California are much worse than in the rest of the country. As of March, the official unemployment rate stood at 11.2 percent—the highest for the state since statistics have been collected—and far above the official national average of 8.5 percent. Tens of thousands of workers lost their jobs in March, which caused the unemployment rate to surge.

But the actual unemployment rate paints an even darker picture. If you include those people who have given up looking for work and those who work only part-time because they cannot find full-time work, the California unemployment rate doubles to about 20 percent.

Economists expect unemployment rates to continue to rise at least through the end of summer, when President Barack Obama’s stimulus packages filter down to the local economies. But economists worry that once this one-time spending is gone, job losses may rise again.

California’s bleak economic condition is an omen for the rest of the country.

California has been plagued by a host of curses over the past few years: a housing bubble, massive budget issues, widespread and uncontrolled illegal immigration, major droughts, and wildfires. In February, Governor Schwarzenegger was forced to issue a state of emergency over drought conditions.

Since the state is responsible for approximately 13 percent of the nation’s gross domestic product, as long as California continues to deteriorate, it will exert a disproportionate drag on the rest of the country. And the drag looks like it will only get heavier.