California Unemployment Rate SOURCE: California Employment Development Department
California Unemployment as of April 2010, is a whopping 12.6%! That is a huge number. If you think about it, one in every ten people who are California Residents are out of a job. From the looks of the graph to the left, it doesn’t look like this trend is going down anytime soon either. What are some of the causes for this? Well, one major cause that I see everyday when I walk down the street or visit shopping malls would be how stores are constantly closing. I’ve noticed a great deal of stores being closed in malls like Irvine Spectrum and an even higher amount of closings at The Block in Orange. When stores close, people loose their jobs. But store closings are often related to business and retailers unable to pay for their leases or monthly rent. When stores don’t make enough money for their business to be profitable they are either forced to relocate to less expensive locations, or close all together. Now, some business are designed on bad business models and are doomed to failure, but others are good businesses that are hit by the hard economic times. It doesn’t take too much analysis to realize that if people are loosing their jobs, then they will be less likely to purchase things that aren’t completely necessary or on the top of their “wants” list. This drop in spending in turn causes stores to get less foot traffic and some eventually close, which in turn means employees of those stores loose their jobs. When you take into account that our National Debt is growing every day, and that our money is loosing purchasing power due to inflation, the situation for California’s economy seems pretty grim.
So where is California’s Unemployment situation heading? My guess is that we are moving toward an obviously stratified society. What I mean by this is that California will have different levels of wealth and jobs that will become so clearly differentiable by earning potential, that it will almost seem like California will have some sort of Caste system. Has anybody else besides me noticed how many people with Masters Degrees work retail or at coffee shops like Starbucks? Something is happening to our economy. And it is going to get even worse. People will have to struggle to even get entry level jobs because of competition. And it seems that computer and robotic automation of jobs is just sucking up even more employment. Only the jobs that are too complex for computers and robots to do are available for people.
I predict that soon, not having a job will become very normal. People will just move in with family members or quadruple up in rooms and live as long as they can via income from the state. We are already seeing people of all ages go back to school. I took a math class a few months ago at OCC and the class was PACKED with people. Some people think that the economy is going to bounce back and that housing prices will give things a boost. I really doubt it. I think our economy is basically staring itself in the face and realizing that it has serious restructuring to do.
I wouldn’t be surprised if we start seeing a new kind of poverty. Not poverty where you see tons of people on the street, but a poverty where people exist on very little money per day and yet they still have cell phones. I imagine a kind of wierd lower class where people don’t appear to be poor by their clothing or acessories, they in fact have lots of stuff, but they just don’t make very much money.