Deep cuts in state spending in the past two years will translate to the loss of more than 60,000 public-sector jobs by the middle of 2010, a UCLA economist estimated in a report released today.
Senior economist Jerry Nickelsburg said the jobs losses - which will occur through normal attrition as well as layoffs, and include positions in state and local government and education - will create a substantial drag as California's economy tries to climb out of the recession.
In the quarterly UCLA Anderson Forecast to be released today, Nickelsburg said the job losses would add four-tenths of a percentage point of unemployment and is a key reason that California unemployment will remain in double digits through 2011.
Statewide unemployment was 11 percent in April, with the May numbers due to be released Friday.
"The non-governmental part of California is kind of working its way through (the recession)," he said in an interview. "The governmental part is still a mess."
Nickelsburg said that adjusted for inflation, state government's general fund spending will have dropped about 20 percent since mid-2007 once legislators and Gov. Arnold Schwarzenegger address a gaping $24 billion budget deficit in large part by making additional cuts.
The 60,000-job loss - which Nickelsburg said would reflect reduced spending in the 2007-08, 2008-09 and 2009-10 fiscal year budgets -- would represent a sizeable portion of the 430,000-plus Californians whose jobs or wholly or partly funded by state government.
"The home health care nurse who is supported by (state funding) but the program goes away, that's a job loss," he said.
Diego Martin, a public employment expert with the Legislative Analyst's Office, said Nickelsburg's methodology was sound, but could not say how accurate the forecast was.
"Whenever you have drastic reductions in the (state) budget, there will probably be job losses felt at some level, whether it's through state workers, or vendors or job loss at the local level," Martin said. "It will show up somewhere, but it's very difficult to put an exact number on it."
As part of his budget-balancing proposal, the governor has called for 5,000 layoffs of state employees, although many of those laid off are expected to find other state jobs that are vacant.
Nickelsburg said the worst of the state's housing market slump appears to be over, which will pave the way for growth to resume. Other pieces of the private sector are showing signs of stabilizing; even the volume of job losses in retailing has started to ease off.
But the downward drag caused by the state budget deficit means California will bounce back more slowly than the nation when the recovery begins late this year or in 2010, he said.
Editor's Note: This article was changed from the print version to clarify that the estimated job losses would affect public sector employment generally, not just state workers.
Call The Bee's Dale Kasler, (916) 321-1066. Read his blog on the economy, Home Front, at www.sacbee.com/blogs.
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