Grave concern for California’s future


Cathy Lee Taylor

The Bureau of Labor Statistics current population survey states that the unemployment rate for California fell in October 2012 to 10.1% – a number which peaked in February 2001 at 12.4%. This same report shows the number of unemployed Californians at 1,848,027 – a number derived from a federal survey of 5,500 households according to the Employment Development Department (EDD).
At an event held Friday, Dec. 7 in the Ronald Reagan Board of Trustees Room, many concerned Californians came together to discuss the effects of Election 2012 on small business including what the future holds for student jobs.
Frank Ury, Mayor of Mission Viejo, thinks students should focus on the “professions in demand.” Ury also encouraged students to “seek out internships” in their chosen field as this is a “proven way to get jobs.”
The Labor Market Information Division of the EDD delivered a news release on Nov. 16, 2012 that outlined the four industries that account for 95 percent of year-over net job gains.
Between September 2012 and October 2012, Government had the most month-over job gains with 60 percent of those gains in total nonfarm employment.
Both educational and health services added 9,600 jobs divided between educational services and health care and social assistance.
Trade, transportation, and utilities posted job increases over the month. Gains were seen in retail and wholesale trade as well as transportation, warehousing and utilizes.
Industries that lost jobs during the month were manufacturing and motion picture and sound recording.
Despite incremental gains, audience members at the Election 2012 meeting reported that small business is afraid to grow because they can’t afford new hires.
Rick Reiff, PBS Executive Producer and Executive Editor for the Orange County Business Journal said, “What we need [in California] is someone to invent a great idea and hire a lot of people.”
Bryan Starrs, VP of Government Affairs, told the audience that companies like Allergan have opened plants in both Texas and New Jersey because of California taxes and that other companies are being forced to do the same thing.
Apple recently announced that it was bringing manufacturing jobs back to the United States and one of the panel members mentioned that their plant was being built in Texas and not in the same state where their corporate offices reside – California.
According an OC Register report on Dec. 8, “California is showing tentative signs of a rebound.” The article goes on to state that there is evidence of job growth and a resurgent housing marketing.
On Aug. 23, CNN reported that Mitt Romney compared California’s economic situation to that of Greece: “”…at some point America is going to become like Greece or like Spain or Italy, or like California.” Romney later claimed he was “joking.”
Michael Villines, Former California State Assemblyman and Keynote Speaker at Election 2012, acknowledges that California has challenges, but is more optimistic. “I’m convinced there are a lot of things that happened in this election that can be good [for us].”
Villines believes that as a result of this past election, we will start to see ‘coalitions’ of people who are looking at key initiatives. Villines stated that people aren’t afraid to pay taxes, but that “they want some kind of consistency [when it comes to taxes].”
Villines thinks we will see more organizations such as BizGo which is funded by the Ministry of Economic Development and Trade and helps develop entrepreneurial awareness. Villines also believes that small business can now “really affect policy,” and that state-elected officials have to reach out and connect with their constituents to make things happen. Villines is also adamant that we must fund education so that our students stay here in California.
Rocky Cifone, Dean Business Science & Economic & Workforce Development at Saddleback agrees. His mission at Saddleback College is to “infuse entrepreneurship across the spectrum.” In other words, “Even if you are in nursing, you can take classes in entrepreneurialism.”
Villines closed his keynote with, “It’s not as doom and gloom as people think, it will get better.”
Mayor Ury says that he is “not quite as optimistic that legislature will work as non-bipartisan.” Ury believes that we need more “local control” and that if “legislature can’t solve it, then the cities will have to.” Ury also cited a startling statistic that, “One out of 100 [people in CA] files a tax return,” Ury said.
Rick Reiff commented on the changes for small companies since this election. “If you are a sole proprietorship, you probably won’t feel it,” Reiff said. “If you have 10-20 employees, you now pay the highest income tax in the country.”
Reiff said, “I speak to a lot of wealthy people, and for the first time, they are seriously thinking of moving out of state.” Clearly that has a revenue impact on OC business revenue. “It’s not a pretty picture,” Reiff said.
California State Assemblywoman Diane Harkey is concerned for California but wants to stay upbeat, “Revenue can equal job increases, but that is a hard concept to get across in government.”  She continued, “Somehow revenue always equals taxes and we need to break that mold.”
Harkey also believes that current term limits of six years is “killing legislature.” Harkey would like to see terms increased to 12 years because, “The first two years you are just trying to find the bathrooms, the second two years you get something done, and the last two years are spent looking for a job.”
When the panel discussed the OC business environment, Harkey said, “We are entrepreneurial in Orange County; there’s a freedom aspect to the majority of us.” Harkey also said, “OC also has reasonable taxes, good schools and we are not union-dominated.” Harkey believes that we [OC business] are successful because of this individualist mindset.
Reuben Franco, CEO of the OC Hispanic Chamber of Commerce, wants to see markets opened in Mexico which can become a gateway to the rest of Latin America.
On Dec. 7, MarketWatch, a publication of the Wall Street Journal, reported that U.S. unemployment rates “fell across all groups.” The unemployment rate for men “fell by 1 percentage point,” and for women it dropped by 0.7. While positive, the pace of recovery remains inadequate, according to this report.
One thing the panel agreed upon was that many are concerned for the future of California and that something needs to be done.


BLS economy at a glance


California unemployment numbers

The Panelists at Election 2012 on Dec. 7 in the Ronald Reagan Room (Cathy Lee Taylor)