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California’s unemployment rate hits high of 12.6%

April 16, 2010 |  8:22 am
California’s unemployment rate reached a new high in March, hitting 12.6%, bolstering fears that unemployment will remain a persistent problem through at least the end of the year. The unemployment rate in February was 12.5%.

California was tied with Rhode Island for the third-highest unemployment rate in the nation, after Michigan and Nevada, according to data released Friday morning by the Bureau of Labor Statistics. The national unemployment rate in March was 9.7%.

Though the Golden State added jobs, more than 2.3 million Californians are still unemployed. The struggle for some is about to get tougher. Tens of thousands have been out of work so long, they will see their unemployment checks cut off within the next few weeks.

Despite Obama’s approval on Thursday of an $18-billion measure that extends jobless benefits for many Americans through June 2, the Employment Development Department estimates that about 100,000 Californians will have exhausted their benefits completely by this weekend. They are not helped by the measure passed Thursday.

“Jobs have not been quickly multiplying, so there’s a lot of people who are still in need of assistance,” said Loree Levy, a spokeswoman with the Employment Development Department.

Typically, unemployment benefits in California last 26 weeks. But in the last two years, four sets of federal extensions have added 53 weeks. Another program, called FED-ED in California, added 20 weeks on top of that, bringing the total potential benefits to 99 weeks.

That’s the longest duration of jobless benefits made available in recent memory, Levy said. But the U.S. economy has experienced an almost unbroken string of employment losses since December 2007. Employers remain cautious about hiring.

On average, there are 5.5 job applicants for every opening, according to Maurice Emsellem, policy co-director at the National Employment Law Project. For those about to lose benefits, the clock is ticking. “They’re on the leading edge of the demand, and for the first time, there’s no more further weeks being discussed,” Levy said.

Some unemployed workers will be helped by the measure passed Thursday. They had already qualified for previous extensions of benefits, but were not able to receive them because Congress had not yet authorized the funding. Emsellem estimates that the measure will help 424,000 people who otherwise would have run out of benefits by the end of the week.

Proponents have characterized the measure as a lifeline for jobless Americans in a weak labor market. But critics concerned about ballooning deficits contend the federal government should not bankroll further benefits until it reduces spending elsewhere.

“The best unemployment benefit is a job,” said Sen. Tom Coburn (R-Okla.). “This is a debate between members of Congress who are addicted to borrowing and spending and those who have realized the time to make hard choices is now.” Michael Patterson, a 45-year old aspiring actor, says he’d much rather have a job than collect benefits every month.

“It makes you feel like you’re committing a crime,” he said, standing in the office of a WorkSource Center in Los Angeles’ Chinatown, where he was looking for a job.

Patterson is on his third extension of benefits. When he first lost his job with a temp agency, he gave up his apartment and moved in with his family in Palmdale. But he said they too are struggling financially, so he moved out a few months ago. Now he pays $210 a month to sleep on the floor of a friend’s apartment, and he sometimes goes to the L.A. Mission to eat.

Many in California have been out of work for so long because they come from industries that were decimated by the recession, including construction and business and professional services, said Esmael Adibi, an economist at Chapman University.

“For those people, the outlook is grim,” Adibi said. About 38% of the unemployed in California — about 803,000 people — have been out of work for 27 weeks or more. That’s twice as many people as a year ago.

Many companies are squeezing more work out of existing employees and delaying hiring anyone new, said Philip J. Romero, dean of the College of Business and Economics at Cal State L.A. Productivity grew 6.9% in the fourth quarter of 2009, the steepest growth rate since 2003.

Juan de la Rocha lost his warehouse job more than a year ago. He lost his apartment and moved into a motel with his girlfriend and their 11-year-old daughter, paying rent by the week. He recently received notice that his unemployment benefits are set to expire.

So he moved his family in with his sister, who still has a job. De la Rocha remains in the motel because his sister’s place is too cramped. He figures he’ll live on the street when his checks stop coming.

“It’s no life for them to be out there with me,” he said.

-- Alana Semuels