County jobless rate at 12-year high...

admin | 2008-07-19 11:15

One out of 16 people in the county's work force was unemployed last month, with a seasonally unadjusted unemployment rate of 5.9 percent, up from 5.5 percent in May. Since there were relatively few layoffs during the month, economists say the unemployment spike may come from new people trying to enter the work force but unable to find jobs.

The state Employment Development Department said San Diego County's unemployment rose above the seasonally adjusted national average of 5.5 percent. But the county's rate remains below the statewide average, which rose from 6.8 percent in May to 6.9 percent in June.

California is now tied with Mississippi for the third-highest jobless rate in the nation, following Michigan with 8.5 percent and Rhode Island with 7.5 percent.

"Today's jobs report tells us that the California economy is in a recession," said Stephen Levy, who heads the Center for the Continuing Study of the California Economy in Palo Alto. "Job levels have declined in five of the past six months, and the unemployment rate in June is 1 percent higher than six months ago."

Levy said most of the rise in unemployment reflects new entrants into the job market being unable to find work.

In San Diego County, the last time the unemployment rate was at 5.9 percent was in July 1996, when the region was still recovering from the brutal recession of the early 1990s. The highest local unemployment since then was 5.7 percent in June 2003.

San Diego County had 4,900 fewer jobs last month than it did the previous June - a 0.4 percent decline in the work force. The county added 4,100 jobs in June from the previous month, but more than 70 percent of the hiring was for seasonal work at hotels, restaurants and tourist centers. Most of those jobs will evaporate when the tourism season ends in September.

The county also added 1,000 construction jobs as the state government accelerated long-planned highway renovation projects.

Despite the month-to-month improvement in hiring, the county has had year-to-year job losses in three of the past four months.

Since June 2007, San Diego County has lost 8,500 construction jobs and 5,500 jobs in the financial sector, mostly related to real estate and mortgages. The largest rise in employment came with the addition of 3,700 tourism-related jobs.

"(The) San Diego region's unemployment rose higher than the national levels despite a significant growth in low-wage tourism industry," said Murtaza Baxamusa, research director at San Diego's Center on Policy Initiatives. "This is a double whammy for our region. Not only are we lagging behind the rest of the country in the number of jobs, we are adding jobs that make it difficult for workers to make ends meet."

Levy said the statewide economy is doing even worse than the employment numbers suggest.

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