California Hemorrhages Jobs
March 12th, 2009I have a sort of “Leader Board of Doom” that I watch closely. This is the order:
Britain
U.S. Treasuries
Japan
China
California
Mexico
Many people don’t realize that California has the potential bring the whole show down. And no, the U.S. can’t just jettison it to sea, like some malodorous trash barge. All there is to do now is track the festering rot and attempt to duck and cover when the thing blows.
Via: Reuters:
California lost the most jobs of all the states, 79,300, in January, while Michigan registered the highest unemployment rate at 11.6 percent, the Labor Department said on Wednesday.
South Carolina followed Michigan with an unemployment rate of 10.4 percent. Rhode Island, which had its highest unemployment rate on record, was third at 10.3 percent.
Besides losing more jobs than any other state, California had an unemployment rate of 10.1 percent, compared to the national rate of 7.6 percent that month.
Since January 2008, the Pacific coast state shed nearly a half million jobs — the largest decrease in the country — as a devastated real estate market and government standstill pushed more and more people out of work.
With 49 states reporting monthly unemployment rate increases and 42 states saying they had lost jobs in January, there were few bright spots in the report.
I feel you there. All the economies are linked via banks and the bond market. Look at this zillow estimate of a park of $1mill trailers: http://tinyurl.com/cjqp2u They certainly aren’t selling for that price, but the zillow algorithm is reflecting CA’s real problem: no middle class, and juxtaposition rich and poor i.e. nearby million dollar houses are pulling up the prices for hotel and restaurant workers living in close quarters. This system works only in the short term as long as the workers are employed and face no retirement or health costs. Job losses really disrupt this. The solution to the tent cities is not to build state housing for the poor, as there are plenty of empty houses. The problem is no wealth retained by the lower middle class. This NYTimes map also shows factors driving change in California. People migrate there with hopes for a better life http://tinyurl.com/cyskxl
Kev-
Don’t you think several countries in Europe should be ranked ahead of China and Japan on your Deathwatch leaderboard? Ireland, Germany, Greece and several Baltic states are already dealing with riots. Or, do you consider them dead already?
Ireland, Spain, Greece, Italy and Germany, as well as the former Soviet states, are all facing very dangerous situations, no doubt about it. But by “Leader Board” status, those issues seem to be the closest to causing cascading problems. It’s just my opinion, obviously, and the straw that breaks the camel’s back could be anything. Or maybe the camel’s back doesn’t break, and the creature just limps on… and on… With calls for a New World Order every five minutes.
“Or maybe the camel’s back doesn’t break, and the creature just limps on… and on… With calls for a New World Order every five minutes.”
I have to be honest here, as shitty as a “collapse” scenario could be (esspescially in the good ole USA), I find this this possible outcome mucch more depressing.
– Mike Lorenz