California is hardest hit by the crisis than the rest of the United States
Do not rely on the largest state of the union (13% of the GDP of the United States) to play the role of locomotive and consolidate U.S. growth. "If it accepts, California follows the U.S. economy with a lag of about six months. If the current trends in the late spring and early summer so we begin to see improvements in the California economy. In contrast, California is a leader in the scenario of a relapse into recession, "explains David Shulman, a leader of the university research center Anderson Forecast at UCLA.
"Great Recession" of 2009, as it is called here, has caused more damage than previous recessions in California.Especially, it has exposed the extent of structural problems that were masked by the Internet bubble, then the housing bubble.
An unemployment rate above 13%
"This recession will probably leave lasting scars in California", says Scott Anderson, senior economist at Wells Fargo, the second largest bank in California. "The state has lost more than one million jobs in this recession so far, representing 14% of job losses in the country. The value of homes plunged an average of 56% from its peak in 2006. The unemployment rate will probably climb to above 13%, which represents nearly 3% higher than the national average unemployment. Today, nearly 700 000 Californians find themselves unemployed for over six months.Rising unemployment aggravates the credit problems of California households and makes it more difficult political choices needed to address fiscal imbalances. None of these cyclical and structural problems are insurmountable, but it will take time to resolve, "says this expert.
At the exit of a cinema last week, the deputy mayor of Stockton and some municipal employees were to sign a list to organize a referendum to block the appropriation by the State of California income tax d 'Ordinary fund city services. Indeed, thanks in part to a forfeiture of $ 2 billion in local revenue that the State of California, managed in the capital of Sacramento, was able last year to plug a hole in its 60 billion budget.This transfer of wealth is now forcing dozens of cities to prepare cuts wages of municipal employees, or even elimination of teaching positions. Already, as an economy measure, since July 2009, employees of the State California, with the exception of emergency personnel are advised to stay home three days a month without pay.
Last summer, California had been, for lack of dollars, pay some of its suppliers with "IOUs." "It is quite possible that the same situation occurs in a few months," confesses a blase tone the senior manager of a local bank. This is the third time since the Great Depression of the 1930s as the "Golden State" also falls down.