Politics & Policy

Surf’s Up

California joins the post-recession job recovery.

The economy, spured by tax cuts, is creating jobs faster than a Dick Dale glissando. The post-recession job recovery has hit the shores of 9 states on the Atlantic seaboard. The undertow in 3 Great Lakes states has reversed. And California is among 29 states (as of the April employment report) with higher job levels than when the 2001 recession ended.

The Golden State’s labor market — 14.4 million workers and the largest in the U.S. — peaked with the national economy three years ago. It also reached its cyclical trough in July 2003, one month ahead of the U.S. labor market. Since July 2003, California entrepreneurs have created 134,200 new jobs in private-industry sectors ranging from construction to professional and business services. Total government employment declined in the period.

Most post-recession job gains have occurred in southern (Orange County, Riverside-San Bernardino, San Diego) and central California (Bakersfield, Fresno). Since the tech wipeout, San Jose remains one of the state’s hardest-hit job zones. Employment there peaked in December 2000.

That aside, a tidal wave of new jobs has engulfed the western U.S., led by low-tax Nevada, which has the highest percentage job-growth rate in the nation. Other states recording employment growth are Alaska, Arizona, Hawaii, Idaho, Montana, New Mexico, Oregon, Utah, Washington, and Wyoming.

Along the Atlantic seaboard, the post-recession jobs pipeline has expanded in every region. Florida leads the Atlantic zone in job creation — entrepreneurs there have added 232,000 private sector jobs — with South Carolina and Virginia (South); Delaware, Maryland, and New Jersey (Mid-Atlantic); and Rhode Island, New Hampshire, and Maine (New England) also showing gains. One notable exception is Massachusetts, where private employment has declined by 101,000.

Reversals in the Great Lakes labor market are another bullish development. Entrepreneurs in Indiana, Minnesota, and Wisconsin are fighting back from job losses that date to the late 1990s (see “Clinton Job Losses“).  Total post-recession job levels in the three “Third Coast” states are higher, and include gains in Bloomington, Elkhart-Goshen, and Terre Haute (Indiana); Rochester (Minnesota); and Eau Claire, Green Bay, Kenosha, La Crosse, and Sheboygan (Wisconsin).

Modest gains have also occurred in Cincinnati, Ohio, the state’s second-largest labor market, and the Hamilton-Middletown area. Metro Detroit, a six-county region, includes Oakland County, the economic engine that powered Michigan’s economy in the 1982-1990 and 1991-2001 expansions. Metro Detroit added more jobs this past April (27,500) than in any month since spring 1999. The job growth was broad-based across private-industry sectors.

Some bears are retreating to their lair in response to the March and April employment reports from the U.S. Bureau of Labor Statistics. Average job growth for both months was 312,500. This number is greater than the average monthly gains of 198,000 for the March 1991 to March 2001 U.S. expansion.

Other bears continue to attack the Bush tax cuts, trying to change the topic now that the economy is creating jobs. One bearish employment claim that’s sticking around is that the current job recovery is not broad-based across the country. Yet every region of the United States has at least one state showing post-recession job growth.

Add to this the fact that California has joined the post-recession job recovery, and the bears are all wet.

The USA is hanging 10.

Greg Kaza is executive director of the Arkansas Policy Foundation, a non-profit economic research organization in Little Rock.


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