The purpose of an economy is not to serve statistical analysis, but rather, to serve people. Thus, we have to continually ask ourselves: what’s actually happening to Americans now that we’re three years beyond the official onset of the recession? Is the quality of life for Americans improving or not? The value of homes, the security of employment, and the cost of food and energy–these are the benchmarks we should use when judging the present state of the economy. To do otherwise would suggest that our only concern would be for the United States as a kind of corporate industrial-park, where mail is collected, SEC filings are generated, and cash builds up on balance sheets.
If we take a look at California employment, for example, we see that there is in fact no economic recovery taking place in the nation’s largest state. None of the jobs lost in the financial crisis and recession have been replaced. Worse, that California’s employed population is now running at levels last seen ten years ago, means that the unemployment rate itself is very high, and is not coming down. Well, California like the rest of the United States has a bigger population now than ten years ago. | see: California Employment in Millions 2000-2010. (updated today, 17 December 2010)
In November, 15.97 million people were employed in the Golden State. This number is now flat-lining, at a dead-calm over the past few months. And yes, the look of dismay you see on the face of incoming Governor Jerry Brown is the realization that California is trying to service obligations and a population in fiscal year 2011, with a workforce last seen in the year 2000. That is grim.
Here at www.gregor.us and also in recent issues of StockTwits Macro Weekly, I’ve discussed both the recovery in global resource demand and also the very notable recovery taking place in US based export industries from capital goods to agriculture and coal. There is no question that the weak dollar, combined with Non-OECD industrial growth is giving a huge boost to the US railroad industry and all the goods that are pumped through it from our ports. However, this uptick in economic flow is not enough to move the trailing dead-weight of US unemployment–which is now becoming structural. Finally, for anyone who would like to challenge the notion and assert that “California is not the US economy” I would say this: Sorry, but California is indeed the US economy. The US will be going nowhere without the full participation–if not the leadership–of California.
Data: Labor Force and Unemployment Data page via State of California.
Photo: Billboard art of Kerry Tribe, as part of the How Many Billboards art project, Los Angeles.