Largest U.S. Economy, Devastating Losses

The state with the single largest economy is approaching unemployment rates not seen since the Great Depression.

Unemployment in California hit 11.2 percent in March. The record for this state is 14.7 percent unemployment set in October 1941.

The state with the country's largest economy has lost nearly three-quarters of a million jobs in less than two years. As an emergency measure, Gov. Arnold Schwarzenegger has ordered 26 employment offices to stay open on Saturday. The state with the country's largest economy has lost nearly three-quarters of a million jobs in less than two years.

Now, two million people need work, people like Bernie Hernandez, a commercial window glazier who saw work slowing until it stopped.

"As far as the commercial building business, yeah, right around January, that was it. Just started scrambling for anything," Hernandez said.

The biggest losses have been in construction, finance and retail. California lost an additional 62,000 jobs in March.

"So far we're in a deepening downward spiral," said Stephen Levy of the Center for Continuing Study of the California Economy in Palo Alto, Calif. Levy said job losses lead to even more job losses as the unemployed cut spending and pay fewer taxes to state and local governments.

In Pasadena, Salvador Reyes had steady work for 22 years laying hardwood floors, but he was scanning the computer for work in the Pasadena employment office Saturday. "The hours dropped less and less until finally it got to the point where there's no work," Reyes said.

Now California is among eight states that have an unemployment rate of 10 percent or higher. Michigan, the automakers' state, is at the top with nearly 13 percent of its workers out of a job.

Part of California's problem is that with population growth and immigration it added 300,000 people to the labor force who became instantly unemployed.

Levy said that when the economy recovers California is in a good position to lead with its technology industry and development. But he said he sees several more months of decline until the president's economic stimulus kicks in, if it does.

"We have to build consumer income and consumer confidence," Levy said. "That's going to take a few months before people go out and spend."

And that, he said, would be midsummer at the earliest.

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