California Economy

1 Pages 308 Words

California's Unemployment Crisis

According to statistics compiled by the U.S. government and mined by
BridgePath (http://www.bridgepath.com), California has a far higher
unemployment rate than most of the country (see chart). While areas like
the Silicon Valley continue to flourish, much of the nation's most populous
state still remains in recession. In fact, only four other states have a
higher unemployment rate for 1997 than California (two of them being Hawaii
and Alaska -- states with traditionally high unemployment).

California's 6.3% overall 1997 unemployment rate is almost a point and a
half greater than the national rate of 4.9%. That rate ranks California
fifth worse in the country -- though it is an improvement over 1996 (where
the state was plagued with 7.2% unemployment).

The BridgePath analysis suggests that two Californias may exist. Regions
like Modesto (13.4%), Fresno (12.5%), Bakersfield (11.4%), and Stockton
(10.8%) are experiencing double-digit unemployment like many European
countries. Even Los Angeles has 7.0% unemployment. These alarming numbers
are offset by regions like the San Francisco Bay Area, the San Diego Area,
and Orange County -- which all have unemployment far below the national
average. San Jose, for example, has a 1997 unemployment rate of only 3.1%
(the lowest in the country).

This dichotomy has come about chiefly due to California's changing economy.
Though much of the state's economic progress relies on agriculture,
technology is quickly becoming the largest employer. Regions like San
Diego, Orange County, and the Bay Area all rely heavily on technology while
cities like Bakersfield have been slow to adopt. It is not surprising that
all these new growth areas have grown up around world class universities
that help spur innovation.

But California's situation is not unique. All around the nation, two
economies are springing up -- the educated and the non-educated ...