Unemployment Rises to Frightening Levels

March 21, 2009 12:00:00 AM PDT
Two million people are out of work now in California and the news seems to keep getting worse. The state's unemployment rate rose for the 11th straight month in February, hitting 10.5%. That's the highest since April 1983. The numbers are even more bleak here in the Valley:

Fresno County - 16.4%.
Kings County - 16.3%.
Madera County - 13.8%.
Mariposa County - 12.8%.
Merced County - 19.9%
Tulare County - 17.0%.

The numbers are worse than they've been since the last American recession, but back in 1993, they were even worse in the Valley. Fresno County had 19.1% unemployment in Feb. 1993. And this time around, many analysts think the government may have already done something to put the brakes on it.

From the construction site to the unemployment line, Sumio Nakagawa is one of the latest victims of the recession. He's one of 72,000 unemployed workers in Fresno County. "Things just slowed down and I got laid off," he said.

Along with agriculture, construction is one of the hardest hit industries, with 2,600 job losses in one year. It's so bad, Nakagawa is considering a move out of town, or even out of state, to find a job. "I'm going to try around the Bay area because of the Bay Bridge, so hopefully I can get out on that," he said. "If not, I'll be going to Alaska."

He may be onto something. While Fresno County's unemployment numbers are above 16 percent, San Francisco's are just above 8%, and Alaska's are even lower. And Nakagawa's industry is a big part of the reason. Labor analysts say there's been snowball effect on the economy, with the housing industry's struggles passed on to other industries until everyone was in the hole. "People don't realize with the housing collapse, it affects retailers, truck drivers, restaurants," said labor analyst Steve Gutierrez, of the state Economic Development Department. "It has a trickle down effect."

Legislators think they've provided a fix in the recent budget. They're giving $10,000 in tax credits to people who buy new homes, hoping to get people like Nakagawa back to work in construction. The credits are three weeks old, but Republican Assembly leader Mike Villines says there are signs it's already working. "[The Builder's Industry Association] said they moved 14 houses in a weekend or a five-day period. "They haven't done that in two years. So people are buying because of that credit," said Villines.

Villines says he thinks the Valley's unemployment struggles should start turning around within three months. But he says to keep an eye on the housing industry to make sure it takes off as expected.

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