California Economy Wrapup: Unemployment rate continues downward trend
(Photo Credit: Ken Walton/Flickr)
California was the subject of a couple of high-profile, positive stories about its economy this week, and also received an important piece of budget news that, while not as high-profile, means a lot to closing the workforce skills gap the state is facing.
Unemployment Picture: First, the state's unemployment rate continued its downward trend during the month of May, hitting the lowest level in nine years, since May 2007.
The statewide average decreased to 5.2 percent and nonfarm jobs increased by 15,200, according to today's news from the California Employment Development Department. Since May 2015, nonfarm employment has gone up by more than 440,000 jobs.
The biggest gains for the month were in the professional and business services and educational and health sectors, both of which added 12,800 jobs. The manufacturing industry posted the largest loss with a 5,000-job reduction.
More Work(force) Left: The San Jose metro area keeps experiencing smaller and smaller levels of unemployment with the region falling to 3.4 percent. In an appropriate snapshot of Silicon Valley's struggle with success, a Vox story noted the bizarre notion that the region can't afford to add any more jobs due to the housing shortage.
At the same time, the split in California's economy is still reflected in these jobs numbers. Earlier this month, Federal data showed California's El Centro metro region had the highest unemployment rate in the country. And five of the seven areas across the country with unemployment above 10 percent were in California.
However, the California economy got a nice ego boost this week, when it was ranked the sixth largest economy in the world based on GDP, jumping ahead of France. Part of this was due to adjustments of the euro versus the dollar, but it's not a bad way to close out the fiscal year.
This week, two co-chairs of the California Economic Summit added their voice--via the Sacramento Bee--to the conversation about the state's business climate and the fundamental issues Californians need to face to keep the job growth going, namely the quality of its workforce.
"California’s advantages – in addition to our size, our proximity to world markets and, yes, our weather – include an education system that delivers one of the best workforces in the world. The University of California, the California State University and our 113 community colleges are all part of the summit and are developing policies to train the 1 million more skilled workers our economy needs."
The Summit's goal of bridging the estimated gap of one million workers with skill credentials or degrees also got a nice boost when the California Legislature passed a state budget that included $200 million for a program to upgrade career technical education at the state's community colleges. Employers and economic development reacted positively to the news about the Strong Workforce Program, which was the result of two-dozen recommendations submitted by the Community Colleges' 2015 Strong Workforce Task Force.
"What's important now is that the colleges make sure their curriculum reflects the latest in techniques so that students are adequately prepared for the job market," said Tom Mundy, owner of Superior Thread Rolling, manufacturer in the San Fernando Valley.
Helping implementing the Task Force’s recommendations in order to train more students in the skills needed by industries and preparing more Californians for middle-class jobs are key pieces of the Summit's 2016 Roadmap to Shared Prosperity and goal to produce one million more middle-skill workers over the next ten years.