California UI: From Bad to Worse

Scary times are getting even scarier. The California unemployment rate hit 11.5% in May, getting very close to double that of May 2008. Even worse, some California counties are hitting close to 20% and the national UI rate is hitting close to 10%. According to the EDD:

SACRAMENTO – California’s unemployment rate was 11.5 percent in May, and nonfarm payroll jobs declined by 68,900 during the month, according to data released today by the California Employment Development Department (EDD) from two separate surveys.

The U.S. unemployment rate also increased in May, rising to 9.4 percent.

In April, the state’s unemployment rate was a revised 11.1 percent, and in May 2008, the unemployment rate was 6.8 percent. The unemployment rate is derived from a federal survey of 5,500 California households.

Nonfarm jobs in California totaled 14,343,400 in May, a decrease of 68,900 over the month, according to a survey of businesses that is larger and less variable statistically. The survey of 42,000 California businesses measures jobs in the economy. The year-over-year change (May 2008 to May 2009) shows a decrease of 739,500 jobs (down 4.9 percent).

Unfortunately, California is not the only one feeling the pain.

Although the Labor Department reported that 48 states and the District of Columbia saw their unemployment rates rise in May, California’s rate was substantially higher than the national rate of 9.4 percent for the month. Only four states had higher rates: Michigan, Oregon, Rhode Island and South Carolina. The West had the highest regional jobless rate in the nation, at 10.1 percent, and it was the highest rate since September 1983, when the nation was emerging from a deep recession.

And, while the UI numbers keep going up, it seems like the number of California claims are going down.

In related data, the EDD reported that there were 839,960 people receiving regular unemployment insurance benefits during the May survey week. This compares with 853,607 last month and 467,563 last year. At the same time, new claims for unemployment insurance were 67,579 in May 2009, compared with 72,718 in April and 47,003 in May of last year.

I’m really not sure how that happened, but it could be that some people have gotten so frustrated that they don’t want to bother. There are a number of very scary stories being told on my post about California going broke. It’s unbelievable what people are having to go through just to get a little money from the state. Yet, [d]ue to decreased demand for Unemployment Insurance (UI) benefit assistance on Saturdays, EDD’s UI telephone lines are now open from 10 a.m. to 1 p.m. on Saturdays.” Whatever. I just hope that they took into account how upset people are before they started decreasing hours of assistance.

According to our illustrious Governor, however, things aren’t as bad as they seem:

Gov. Arnold Schwarzenegger said in a statement that with the massive international economic downturn, it’s natural the state would see historic job losses.

“A full recovery will not happen overnight — it will take time, which only further underscores the need to continue the economic stimulus measures I fought for in the February budget,” said Schwarzenegger. “There is no greater priority right now than to stimulate the economy, create jobs and get California back on the road to prosperity.”

Schwarzenegger, a Republican, has proposed laying off another 5,000 state employees, along with billions of dollars in cuts to education and social welfare programs, to address a $24.3 billion deficit for the fiscal year that starts July 1.

So when that happens, UI should go up another point in June.