NPR

California's Unemployment Stuck High As National Average Dips

California's economy is a study in contrasts. The state's unemployment rate — 9.8 percent — is tied with Rhode Island for the highest in the country. Parts of the state are still suffering mightily from the housing collapse. But there are also large pockets of job growth and revival.

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Transcript

AUDIE CORNISH, HOST:

To get a closer view of unemployment and the economy, we're going to focus now on two states. We'll get to Ohio in a minute, but let's start in California. Its unemployment rate has been stuck well above the national average, at 9.8 percent. The state's information economy is still surging, in Silicon Valley and along the coast.

But if you work your way inland, into the shadow of the devastating housing bust, unemployment hits the double digits. And that's where we sent NPR's Sonari Glinton.

SONARI GLINTON, BYLINE: To help paint the employment picture of California - and the U.S., for that matter - I've come to downtown Riverside, which is about 55 miles east of Los Angeles. And to help me do that, I'm going to meet up with Ron Loveridge, who used to be the mayor here for about 20 years. And here you are. That's so funny.

(LAUGHTER)

GLINTON: How are you doing?

RONALD LOVERIDGE: Right on time. You found your way here. Got a place to park and all that good stuff, huh?

GLINTON: Yes, I did. So you want to...

LOVERIDGE: Get coffee?

GLINTON: Yeah, let's get coffee first. So while the former mayor, who now teaches at the University of California, Riverside, and I get coffee, let's talk California. Before I headed to Riverside, I stopped at the LA County Economic Development Corporation, where Kim Ritter is an economist.

KIMBERLY RITTER-MARTINEZ: Well, we've always had - I mean, historically - a somewhat higher unemployment rate than the nation as a whole. And it has to do...

GLINTON: Why is that?

RITTER-MARTINEZ: Well, we are a very big state and very diverse.

GLINTON: It's really diverse. While most people think of Hollywood as movies, there's tons and tons of other industries: fashion, aerospace, there's even an auto industry.

So, for instance, Fisker Automotive, which makes plug-in hybrid cars, today laid off most of its employees. And Honda just decided to move its U.S. headquarters from Southern California to Ohio. So California is far more vulnerable to shifts in any individual industry, but it's especially vulnerable to construction.

RITTER-MARTINEZ: We lost hundreds of thousands of construction jobs during the recession. There's architects, landscape designers. There's furniture makers. So when the housing industry crashed, there were jobs lost just - not just in construction, but across a lot of different industries.

GLINTON: And that all brings us back to Riverside, where Ron Loveridge took me on a drive of his city, which he calls the epicenter of the housing bust. But it wasn't just housing construction.

LOVERIDGE: Coming up, as what you say, throughout Southern California, Southern California is over-retailed.

GLINTON: You said Southern California is over-retailed, do you think?

LOVERIDGE: Yes. Way too much. I mean, anybody looks at way too much retail space. Even if you couldn't go online, there's too much retail space by, I think, everybody's judgment.

GLINTON: And you could see that in this month's jobs report, where retail took a big hit, dropping by nearly 25,000 jobs. Strangely enough, it's construction hiring that's holding up the employment number, as we can see, as we get out, at a construction site.

LOVERIDGE: Detroit built cars. Inland area Riverside, Western Riverside County build homes.

GLINTON: Loveridge says recovering from all those lost housing jobs is what's keeping places like Riverside with double-digit unemployment.

LOVERIDGE: Essentially flatlined for several years, and you're beginning to see, in that way, sort of a change in that trajectory. But we've certainly not returned anywhere near to the kind of construction levels that were here in the mid-2000s.

GLINTON: Loveridge says the scale of development is much smaller. He says he sees things improving, but there's still a puzzle to be solved.

LOVERIDGE: How do we create urban communities where people not only live, but also work and play and others visit?

GLINTON: He says if places like Riverside can solve their problems, that'll go a long way to fixing the jobs problem here in California. Sonari Glinton, NPR News, Culver City. Transcript provided by NPR, Copyright NPR.

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