They say that people who don't have the personalities to become accountants become economists. And economists who have a masochistic streak become labor economists.
OK, so I made that last part up. But if you've spent the last three years studying employment data in Southern California, you're probably ready for a nice, long vacation. The region has been dealing with labor catastrophe since the beginning of the financial crisis. May was the first month that saw the Los Angeles County unemployment rate drop below 12 percent -- barely! It's a sign of how sluggish the recovery is that we're tempted to get excited about 11.9 percent.
It's about the growth, stupid!
You could call this good-bad news. Good because at this point any decline in unemployment is welcome. Bad because the decline is so meager that it proves growth isn't strong enough to bring the unemployment rate down to 5-6 percent, which would represent a return to what economists usually mean when they refer to "full" employment.
What's also worrisome is that many of the jobs that were added came in leisure and hospitality and construction. Tourism is a real pillar of the regional economy, and growth there shows that people are confident enough about their personal balance sheets to pay a visit to sunny L.A.
But these aren't the kind of high-wage, stable jobs that would signal a sustainable recovery. As for the construction uptick... well, it amounted to 1,200 more jobs than were created in April. The trend-line is positive, but at this rate it will take more than a decade to re-employ every construction worker who lost a job when the real-estate bubble popped. Chances are those laid-off carpenters aren't going to stick around.
The dog days have arrived
Are you depressed yet? It gets worse. Economists are now optimistic that the regional economy may see robust growth...by 2013. Two years away. And by "optimistic," what they mean is that growth will run at around 5 percent, what one would expect coming out a severe recession and enough to bring the unemployment rate down to pre-recession levels.
You don't have to be a labor economist lying on a bed of nails to figure out what the likely scenario is here: Persistently high employment for the next 12-18 months, with perhaps some light at the end of the tunnel in early 2013. This gloomy outlook was confirmed by the latest UCLA Anderson forecast.
Is there a way out of this quagmire? Here's one -- massive regional infrastructure improvements, which would re-employ thousands of construction workers and establish the region as a leader in modern transportation.
But that scenario depends on action both in Congress and at the White House, in the form of an infrastructure "bank" that could speed up development. And that's unlikely to be funded until 2014 at the earliest, if at all.
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