California’s unemployment rate, on average, is currently at 6.3%, which is higher than the U.S. rate of 5.5%. The current unemployment rate is actually lower than it has been in past years, yet it is shocking nonetheless. The statistic can be a bit disheartening, but studies show that California’s economy and unemployment rates might be on the road to recovery and here are five reasons why:
1. New Jobs
According to the Los Angeles County Economic Development Corp, California is prepared to add 650,000 jobs by 2017. California’s economy is one of the fastest growing state economies in the U.S., and, in the past years, the state has added jobs at a faster pace than the nation as a whole. California’s economy accounts for over 13% of U.S. GDP, far surpassing the economy of any other state.
2. International Interests
A slowdown in China’s economy is one factor having impact on California economy. Despite Chinese exports reducing, Chinese investors are investing money into California. According to the Los Angeles Times, “Chinese investors have bought or created 1,583 U.S. companies over rhe past 15 years through December that now employ 80,600 full-time workers after a five-fold increase in the last five years.”
3. More Trade Related Jobs
Other trade-related jobs increased in the last years and are expected to grow further in the next five years. Jobs within ports will be added and strength in imports specifically, will be seen. “The Los Angeles-Riverside and San Francisco-San Jose trade corridors are among the largest in the U.S. Likewise, eight of the nation’s 25 most valuable international trade corridors are in California,” (Los Angeles County Economic Development Corp). This is largely due to California being such a large consumer market.
4. Travel and Tourism
The travel and tourism industry has brought millions of dollars to California’s economy. California also has one of the largest shares of the domestic travel market expenses in comparison to all other states. In past years, the travel and tourism industries accounted for approximately 2.5% of the total gross product for California.
5. Major Attractions and Landmarks
Studies show the possibility of California’s major tourism markets expanding even further in the next few years. Linked to tourism and some of California’s attractions is Hollywood and the film industry. Employment in L.A. County’s film and entertainment industries could see a sudden boom with recent alterations made to the California Film Tax Credit program. The updated program vision offers incentives to filmmakers, which in turn could draw more individuals to the industry and thus provide more jobs.
Of course, a number of problems remain consistent, so California is not completely in the clear. Health care costs remain extremely high. Long term government projects will continue to take a toll on the economy, and there is the issue of there not being enough affordable housing in metro areas where jobs are expected to become available. Even so, some progress is still progress and California is slowly but surely moving forward.