UCLA Anderson Forecast: Outcome Of November Election Could Threaten Jobs In California
LOS ANGELES (CBSLA.com) — Employment in California continues to grow at a steady pace, but the November election could threaten the state's success, according to a UCLA Anderson Forecast released Wednesday.
Jerry Nickelsburg, UCLA Anderson senior economist, wrote in his report that the number of payroll jobs in the state is at 16.4 million – 6 percent above its previous high. He also noted that the number of people employed including farm labor and the self-employed is now at 18.1 million and 6.2 percent above its previous peak.
However, the future appears cloudy.
"There is a great deal of uncertainty right now both on the domestic and on the international front," Nickelsburg wrote. "The first is coming up on the ballot in September. It is an extension of the Prop 30 temporary surtax on the highest-income earners in the state that would essentially make it permanent. Sure it is supposed to extend the tax only 12 years, but after 20 years of the tax with the Legislature really be able to life without it?"
Nickelsburg noted, however, that the income stream of top earners is "highly variable" and dependent on the economy, and making the state's budget reliant upon it is a treacherous move.
Another threat to the state's employment situation is the upcoming presidential election, particularly depending on the winner's actions on international trade.
"One of the candidates is calling for an all-out trade war while the other is indicating a distaste for TPP and perhaps a willingness to open other trade agreements to modification," he wrote. "California is dependent on international trade. Fully 40 percent of all containers brought into the U.S. come through its seaports and that does not count the line of trucks crossing to and from Mexico at Otay Mesa."
Nickelsburg predicted total employment growth of 2 percent in California this year, then 1.6 percent next year and 0.8 percent the following year, with payrolls growing at about the same rate.
On the national front, Anderson Forecast Director Ed Leamer predicted a lower growth rate than expected in gross domestic product, but said the economy is still on track to create 2.7 million jobs this year and 2.1 million next year.
"We are starting to see more evidence of inflation ahead, and are forecasting interest rate increases to keep real rates of interest pretty constant," according to Leamer.
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