If California is such a pit, why the solid job growth?

californiaflag.jpgEvery year a magazine called Chief Executive ranks the best and worst states to do business based on a survey of CEOs - and every year California winds up at the bottom of the pack. It's a silly exercise on any number of fronts, not the least of which being that the state, despite its high taxes and regulatory hassles, happens to be the 12th largest economy in the world, with a GDP that's higher than any state (and most nations). If this is such a horrible place, why is everybody still here? And why are more businesses adding jobs? Dare I say it's because California is a good place to do business - more than good enough to deal with the negatives. The state's jobless rate was at 8.5 percent in June, a slight drop from a month earlier - and a sharp 2.1 percent decline over the past year. A total of 30,200 jobs were added in the past year, way more than any state, and 253,900 jobs were created, topped only by Texas. For some time, job growth has outpaced the nation as a whole - not spectacular growth, mind you, but a lot better than the alternative. The picture in L.A. County wasn't nearly as strong, with the June jobless rate rising to 9.7 percent from 9.6 percent in May. The separate payroll survey showed a gain of only 200 jobs. UCLA economist William Yu wonders what's going on.

The Los Angeles employment report is puzzling. We see that L.A. payroll jobs declined in May and June, but meanwhile, L.A. household jobs have increased explosively. One reason is that L.A. has had high growth of self-employed jobs over the past few months. Although the payroll job growth in L.A. is stagnating, California's job growth is leading the nation because of its resilient high-tech sectors in coastal California.

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Mark Lacter
Mark Lacter created the LA Biz Observed blog in 2006. He posted until the day before his death on Nov. 13, 2013.
Mark Lacter, business writer and editor was 59
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