With the 2010s at their end, our “Redemption Decade” series explores how California’s economy rebounded from the destruction of the Great Recession. This is Part 1.
If you don’t have a job, the rest of the economic picture is meaningless. And as harshly as the downturn hit California employers, the rebound from that collapse is equally remarkable. Here’s how my trusty spreadsheet sets the scene:
Then: California in December 2009 had lost a stunning 860,842 jobs in a year, a 5.6% drop. Nationally, the loss was 5.9 million, a 4.3% drop.
Now: California as of October 2019 has added 282,575 jobs in a year, a 1.6% increase. Nationally, the gain was 2.4 million, a 1.6% increase.
The decade: California bosses in 10 years added 2.8 million jobs, a 20% growth spurt. That was eight times the 345,000 added in the 2000s, a hiring spree equal to 15% of all U.S. hires. In the rest of the nation, 16 million jobs were added, or 14% growth.
The redemption
Many of the challenges facing California today, from the high cost of housing to traffic congestion, can be seen as outgrowths of the enormous job recovery.
The California economy a decade ago was in total disarray after huge misguided bets on real estate. Far-too-easy lending standards for house hunters, as well as professional investors, left the state ripe for a steep fall when property values imploded.
Bankruptcies and foreclosures were numerous. Layoffs were common. In 2011, for example, one in eight California workers was unemployed.
Recessionary pains created opportunities. Numerous industries worldwide sought cost savings as their revenues sagged during and after the recession. Many turned to technological advancements to help manage their businesses. That put California at the epicenter of a modern gold rush: the information age.
California’s information businesses — from giants Google and Facebook down to tiny startups dabbling in artificial intelligence — added 112,600 largely well-paid workers this decade, a 26% jump. Note that this niche’s tally includes 19,300 job losses (44%) in publishing businesses, including news organizations such as this one.
The 2010s’ broad recovery began well before real estate rebounded, though the construction industry has added 261,300 workers since 2009 — a 42% rebound.
Meanwhile, post-recession life also took a few twists. Many consumers found experiences more satisfying than material things, boosting tourism, entertainment and dining out. Thus, you can see why California’s leisure and hospitality industries added 517,500 workers, a 34% gain, in the decade.
Many traditional merchants flopped as spending habits changed and online shopping took hold. For example, California department stores this decade shed 34,600 workers, roughly one-fourth of their workforce. Conversely, e-commerce helped warehousing and trucking add 204,700 new jobs, a 49% uptick.
California’s recovery came despite two long-time job generators that sputtered. Factories eked out small gains, up 50,000 jobs, or 4%, in 10 years. State agencies and local municipalities hired lightly thanks to financial hangovers from the recession and pressure to prune expenses to pay for employee pension benefits. Governments added 137,550 workers (6% growth) since 2009.
The hiring push eventually forced many bosses to pay up for talent, at least looking at one national scale. California’s average weekly wage in 2019’s first quarter was $1,401 — No. 5 nationally. And since 2009, those wages are up 31% — making it the fifth-best raises among the states. Nationally, wages grew 26% in the period.
But the longest statewide hiring spree on record that bought unemployment to a historic low was by no means perfect.
Yes, the wave of new six-figure tech jobs has been a bright spot. But a big chunk of this decade’s hiring has been in far more modestly paying, mundane services industries.
Those fat salaries have helped push up housing costs beyond a typical Californians’ means, especially in the Bay Area. And all these additional jobs, not to mention growing reliance on trucking and long commutes, have jammed our freeways.
But I guarantee you, nobody worried of such challenges back in 2009 when California’s long-run future seemed doomed.
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November 25, 2019 at 11:00PM
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Redemption Decade: California’s 2.8 million new jobs outpace the nation - OCRegister
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