Santa Cruz County unemployment 13.8 percent in December; economist Jeffrey Michael predicts sluggish recovery

By JONDI GUMZ Posted: 01/22/2011 01:30:17 AM PST SANTA CRUZ —

Unemployment in Santa Cruz County spiked to 13.8 percent in December from 12.5 percent in November and 13.3 percent a year ago, according to figures posted by the state Employment Development Department on Friday. The county reported 92,300 jobs, down 2,700 from November and 4,100 from a year ago. Looking into the future, economist Jeffrey Michael of the University of the Pacific Business Forecasting Center issued a prediction that the labor market in Santa Cruz County will “creep toward recovery in 2011.” He expects overall job growth to return in the fourth quarter of this year. He forecasts jobs will be added in private education and health services, leisure and hospitality and information in the second quarter and in manufacturing in the fourth quarter.


Jobs Change 20-year Change
Industry 12/10 from Nov. Average from 12/09
Mining, logging, construction
2,700 Down 100 Down 100 Down 500

But that gain has been outstripped by hundreds of jobs lost in retail and wholesale trade, construction, hospitality and government. Case in point: retail jobs. With opening of Marshalls and hiring for Burlington Coat Factory, Toys R Us and other stores at the Capitola Mall for the holidays, jobs in general merchandise stores rose 100, compared to a year ago. But jobs at other retail locations dropped 500, for an overall loss of 400. The state will post the local unemployment data for January on March 25 after completing its annual revision process. Mike Hartrich of the Santa Cruz Construction Guild said there’s been a shakeout for those working in construction. Electricians, plumbers and roofers are busy while general contractors and carpenters struggle. “There is work happening but the volume is a lot less,” said Hartrich, who is waiting to hear on a job where his bid was in the middle. “They may go with the low bid.”

Bill Tysseling of the Santa Cruz Chamber of Commerce said he has seen a prediction for no net job growth statewide until 2012. “The anecdotal stuff I see cuts both ways,” he said, adding that cutting redevelopment agencies, as Gov. Jerry Brown proposes, “would have a very significant negative effect,” especially over the next 48 to 72 months. Though the federal government is giving workers more money by temporarily dropping the Social Security tax, that won’t boost jobs or produce a sustainable, consumption-driven recovery, in Michael’s opinion. He said tech, agriculture and tourism will lead the recovery, with a depressed construction industry, foreclosures and shrinking government expenditures all obstacles to escaping the economic doldrums.

Reviewing the county’s jobless figures, state labor analyst Jorge Villalobos pointed to one bright spot. Most of the industries were in line with the 20- year historic average or doing a bit better, he said, comparing the loss of 400 nonfarm jobs between November and December to the average loss of 900. Leisure and government both lost jobs in December but less than the historic average; agriculture lost 2,300 jobs, closer to the historic average. “The total farm number inflates the unemployment rate,” Villalobos said, noting unemployment jumped in Monterey County, which also has a large farm sector. Compared to a year ago, Santa Cruz County saw a modest increase in jobs in private education and health services. Ted Burke, co-owner of Shadowbrook restaurant in Capitola, is more optimistic about job growth. “The slumbering hospitality industry is slowly but finally awakening to better days,” he said. “Locals are spending again and we are finding that out-of-county visitors are inching closer back to the 30 percent portion of our business that they used to be.” If this trend continues, Burke said workers will get more hours and more people will be hired for the busier tourism months of May through October.

Workforce Santa Cruz County is sponsoring free job-seeker workshops through June in Spanish and English at the Watsonville Career Center, 18 W. Beach St. and the Shoreline Career Center, 350 Encinal St., Santa Cruz. A session on “Searching for a Job” was recently added by request. It will be 9:30-11:30 a.m. Jan. 28 at the Shoreline Career Center. No pre-registration is required. For a complete schedule, go to


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