Unraveling the Unemployment Rate...

California
One of the excuses we hear for California’s budget problems is that they are caused by the national economic slowdown. It’s true that the national economy has a big impact on the state, but we’re seeing data that suggests that something went seriously wrong with California’s economy last year quite apart from our national difficulties.

Last year, California imposed a series of devastating new economic burdens, including the governor’s mandate to radically reduce carbon dioxide emissions (with profound impacts on sectors such as construction, manufacturing, agriculture and cargo transportation) and major increases in the minimum wage. Ironically, proponents claimed that these changes would greatly improve California’s job opportunities.

What we have seen over the past year is that California’s unemployment rate – that had been tracking very consistently with the national rate – broke radically upward from the national figures shortly after these laws took effect.

The Employment Development Department has just released California's December unemployment rate. While the national numbers ticked up by 3/10 of a point, California’s jumped another half point and is now running 1.1 points ahead of the national rate. A picture is worth a thousand words: