And The Hits Just Keep Coming
It's going to be a rainy week for California, but it's water that's coming, not jobs. The November jobless report just came out and California continues to be higher than the national average:
Unemployment in the state stalled at 12.4 percent in November for the third straight month, the Employment Development Department said Friday.
A major culprit: weak holiday hiring by retailers despite strong sales reports.
It's even worse than that at the state's capitol, Sacramento, and for the same reason:
The Sacramento area's unemployment rate jumped six-tenths of a point in November, to 12.6 percent, with the region losing 2,800 jobs. A single devastating layoff at a North Highlands loan center was a key reason. But Sacramento, like the rest of the state, was also hurt by lackluster hiring by retailers.
While sales figures were higher than anticipated, retailers, worried that it was just a "blip", extended the working hours of current employees rather than hire seasonal help to save money. That might make sense in the short term as retailers take a wait-and-see stance, but in the long run, it's the wrong choice. There will be fewer people able to buy and less money in circulation to enable major purchases. The retailers' short-sightedness is just adding to the problem.
And that problem is being aggravated at the state level. Fewer purchases means less sales tax being paid. Fewer employees means less income tax being paid. The state budget, still in crisis, will have less money to work with.
This vicious circle isn't going to be broken until employers of all kinds, including the retailers, stop sitting on their mounds of cash and start hiring. They are running out of excuses.
Unemployment in the state stalled at 12.4 percent in November for the third straight month, the Employment Development Department said Friday.
A major culprit: weak holiday hiring by retailers despite strong sales reports.
It's even worse than that at the state's capitol, Sacramento, and for the same reason:
The Sacramento area's unemployment rate jumped six-tenths of a point in November, to 12.6 percent, with the region losing 2,800 jobs. A single devastating layoff at a North Highlands loan center was a key reason. But Sacramento, like the rest of the state, was also hurt by lackluster hiring by retailers.
While sales figures were higher than anticipated, retailers, worried that it was just a "blip", extended the working hours of current employees rather than hire seasonal help to save money. That might make sense in the short term as retailers take a wait-and-see stance, but in the long run, it's the wrong choice. There will be fewer people able to buy and less money in circulation to enable major purchases. The retailers' short-sightedness is just adding to the problem.
And that problem is being aggravated at the state level. Fewer purchases means less sales tax being paid. Fewer employees means less income tax being paid. The state budget, still in crisis, will have less money to work with.
This vicious circle isn't going to be broken until employers of all kinds, including the retailers, stop sitting on their mounds of cash and start hiring. They are running out of excuses.
Labels: California, Economy
posted by Diane at 4:45 AM
1 Comments:
Yes, demand will not go up until people have jobs and have money to spend. States will have continuing revenue problems until there are people are spending and paying sales taxes and until people have jobs and the states get income taxes. Baring an increase in jobs, people need UI benefits and states need to redo their laws to allow for longer benefits periods and to make them retroactive to allow people still unemployed to get back on the UI rolls and get money.
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