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Davis, California

Wednesday, July 24, 2024

Local jobless rate jumps to 12 percent

Yolo County’s unemployment rate reached 12 percent in February, the second consecutive month in double digits, according to figures released by the Employment Development Department.

The number surpasses both the California rate of 10.5 percent and the national average of 8.1 percent. In other words, nearly one in eight members of the adult workforce in the county is looking for work.

This echoes a statewide and national trend of rising joblessness dating back to last year. In February 2008, only 7.4 percent of Yolo County residents were unemployed. Since that time California as a whole has lost nearly 824,000 jobs, 116,000 in February alone, according to the EDD.

This sharp decline was a response to a cycle of familiar events, according to Stephen Levy, senior economist at the Center for Continuing Study of the California Economy (CCSCE), in Palo Alto.

“The first cause was the housing bubble burst, which caused a precipitous drop in construction of homes, and everything related to that industry,Levy said.

The collapse, Levy added, placed the worldwide financial systems at risk, eventually morphing into a lengthy recession characterized by a large drop in consumer spending.

“This spending drop has taken over as the real cause of unemployment,Levy said.As consumer spending fell off the cliff, stores had to reduce their excess manufacturing and retail capacity, including the workforce.

The California construction industry has dropped the farthest, falling by 18.5 percent and over 150,000 jobs since last February, according to the EDD.

As the number of jobless workers has spiked, so has the number of unemployment insurance claims filed. The EDD has been inundated with new claims over the last few months. 769,000 Californians received unemployment insurance benefits last month, up from just 480,000 a year ago. As a result, for those seeking to check the status of a claim or a check, it has become particularly difficult to continue to contact the EDD by telephone.

In response to this increase in demand for unemployment assistance the EDD extended their call center phone line hours to Saturdays from 10 a.m. to 2 p.m. EDD Director Patrick Henning, in a Mar. 20 news release, said that they are committed to augmenting their time and resources to help the growing number of jobless Californians.

“By extending the hours of our call centers, we will be able to serve more unemployed workers more efficiently,Henning said.

The EDD also said they have begun hiring at least 400 additional staff to assist with the boost in demand, and have committed workers to overtime hours.

A bigger source of relief is sure to come from a bill passed Mar. 26 by the California Legislature. The bill, AB 23 X3, grants an additional 20 weeks of benefits to unemployed Californians, extending the maximum time from 59 to 79 weeks. It would represent the first $3 billion drawn by the state from federal stimulus funds made available through the Obama Administration’s American Recovery and Reinvestment Act.

Governor Schwarzenegger signed the bill into law the following day, after strong support from both houses. Yolo County Assemblymember Mariko Yamada said this bill was something that needed to be drafted.

“This is what Californians expect of their elected leadership, to find common ground and bipartisan solutions to the problems we face,Yamada said.This 20-week extension is real relief for desperate workers, and we are pleased to have been a part of it.

The EDD says it expects the federal extension benefits to be available by mid-April. It encourages the unemployed to access that and other key information on their website, at edd.ca.gov/unemployment.

Levy, however, like many economists, sees unemployment continuing to grow over the short-term. For the longer term it remains unclear how strong or quick an impact federal stimulus funds will have in California.

“These federal policies are the great hope for Californians, to boost spending in the economy, and give relief to consumers,Levy said.


TOM MORRIS can be reached at city@theaggie.org. 


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