Little Comfort in New UCLA Economic Forecast

Double digit unemployment will be with us for awhile, if a new economic forecast from UCLA is close to the mark.

The predictions, from the respected Anderson School of Management, suggest that California's 12% unemployment rate, which is second largest in the nation, will last through the  year and beyond. In fact, the forecast doesn't predict a return to single digit joblessness until 2014.

"The normal recovery has significant job growth in manufacturing and construction," said UCLA's Ed Leamer, one of the report's authors. "Both of those sectors are troubled and will remain troubled."

The Anderson forecast shows a widening gap between two parts of the state. There's a slightly optimistic suggestion that steady recovery will eventually come along the coast, which is home to high tech, entertainment and trade.

But the forecast for inland counties is bleak, due to the region's reliance on housing and construction.

"All of those construction workers who were building houses in the inland part of the state don't have any outlet for their skills," said Jerry Nickelsburg, another author of the report. "There's no demand for new construction."

Nickelsburg sees a growing gulf between the coastal economy and the inland counties.

Ramon Corona, a Riverside resident says things now are just bad. 

“I had friends working here in Riverside at the Marriott. And they had been working there over 20 years, and they just got laid off," she said.

According to Cindy Roth from the Riverside Chambers of Commerce has seen the impact on the chamber’s membership.

"Our membership in the chamber over the last two years, we went from 15-hundred members and we're right now at 14-hundred members," Roth said. But there are still signs of progress. “We also see businesses coming in behind that, trying to make a start."

“Phood on Main” is one business trying to carve out a niche in the same spot where four others had failed. They opened up right as the economy began to tumble.

Owner Marla Cohen says they had to scramble from a high end caterer, to a lower cost lunch restaurant.

So far they've managed to keep serving customers, and paying their workers . But Cohen says they do struggle.

“We are on the edge now to survive. We're one of the few small companies that provide healthcare. Now we may have to rethink that. It's stay open, or give healthcare,” Cohen said.

For some, any fix comes too late. The double digit jobless numbers may begin affecting the population numbers, as some people are forced to give up, and look for opportunities somewhere else.

Still, the UCLA economists are not predicting another recession. But, they caution that instability in Europe could change that.

"If credit tightens in Europe, they will pull money out of the United States, bring it back to Europe, and thereby tighten credit in the United States," said report contributor David Shulman. "We're not forecasting that, but that certainly is a risk."

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