Silicon Valley hit hard by unemployment


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Santa Clara County now has an unemployment rate of 11.8 percent. That is up again from the previous month and is nearly double the 6 percent unemployment rate from a year ago.

Steve Ferro is among 66,000 people who lost their jobs in California last month. He worked at Intel for nine years in chip manufacturing and was laid off June 5. Manufacturing is where Silicon Valley took its biggest employment hit – 2,600 job loses between May and June -- and there is fierce competition for the work that is out there.

"Scan Disc for example, they had a job posted, perfect fit, and within the first day they filled it," said Ferro.

Cisco Systems is cutting another 700 jobs from its San Jose workforce, and yet the summer months did bring the expected seasonal job growth in areas of leisure and hospitality and even some unanticipated glimmers of hope.

"I'm encouraged because I saw some gains in construction, typical gains in financial activities which include real estate," said EDD labor market consultant Janice Shriver.

Analysts who say the economy is stabilizing point to improvements in the housing market. In Santa Clara County, home sales jumped to their highest level in three years, and there is an uptick in selling prices.

There has also been recent positive earnings reports from several companies including Google and Intel.

Stephen Levy is director and senior economist at the Center for Continuing Study of the California Economy. He says the real optimism will come when people like Ferro are finding jobs instead of losing them.

"It takes a while for it to show up in jobs. I expected June to be better than it was, there is no question about it. It's not as good as it should have been," said Levy.

Along with the unemployment rate, one must also consider the under-employment rate which is those people who are involuntarily working part-time and those who have given up looking for a job.

The non-profit research group Economic Roundtable thinks the state under-employment rate is 16.2 percent.

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