Job openings were little changed at 6.1 million on the last business day of September. Job openings have been at or near record high levels since June. Over the month, hires and separations were little changed at 5.3 million and 5.2 million, respectively.
With its far stronger land use regulation, implemented in recent decades, California's house prices relative to incomes ("median multiple") have skyrocketed to 135 percent above those in markets where there is more liberal, traditional land use regulation. Each of California's major metropolitan areas are now rated as severely unaffordable (the worst category of affordability) in the 13th Annual Demographia Housing Affordability Survey. Before California abandoned traditional regulation, its income adjusted house prices were only 30 percent higher than in the traditionally regulated markets. The problem goes beyond home ownership. California has the highest gap between the costs of renting and buying in California than elsewhere in the nation (the price-to-rent ratio). Among the 53 major metropolitan areas, San Francisco, San Jose, Los Angeles, San Diego and Sacramento show the largest affordability gap between renting and buying. That makes home ownership doubly challenging for would-be
The problem goes beyond home ownership. California has the highest gap between the costs of renting and buying in California than elsewhere in the nation (the price-to-rent ratio). Among the 53 major metropolitan areas, San Francisco, San Jose, Los Angeles, San Diego and Sacramento show the largest affordability gap between renting and buying. That makes home ownership doubly challenging for would-be first time buyers.
A future in which only 50 percent of households could afford houses would mean considerably less affluent middle-income households and higher poverty rates. It would stunt economic growth, because both the many more renters and buyers paying more would have less discretionary income to buy other goods and services. This could retard economic growth, as Chang-Tai Hseih and Enrico Moretti have already found to have happened, even with stringent regulation that has been somewhat limited geographically (beyond California to markets most notably like Portland, Seattle, Denver, and Miami).
A key moment in the modern myth-making around small business came in 1978. That’s when MIT economist David Birch published claims – which he repeated in testimony before Congress – that small firms had accounted for 80 per cent of all new employment opportunities between 1968 and 1976. Critics quickly pointed out that Birch’s findings were quite wrong, largely because he defined firm size according to how many employees worked in a given location (like a branch office, factory, or store), not how many the firm employed altogether. In fact, most job creation, in the 1970s and today, comes from a small number of very fast-growing firms, while most small firms either fail (killing jobs) or remain small. Birch later admitted that the 80 per cent figure was a ‘silly number’, but the claims took firm root in popular mythology and political rhetoric by the 1980s. ‘Small businesses create eight out of every 10 new jobs,’ said Richard Lesher, president of the largest pro-business lobbying organisation, the US Chamber of Commerce.
The California dream isn’t dead. It just upped and moved to South Dakota. Less than half of people born in California in 1980 are making more money than their parents did as young adults. That’s the lowest percentage of children out-earning their parents that California has seen since at least 1940. By contrast, 62 percent of people born in South Dakota in 1980 out-earn their parents. That’s the highest percentage for any state in the country.
California’s Unemployment Insurance Fund is projected to have a positive balance by the end of 2018, marking the first time since 2008 that the employer-funded account will end in the black, the California Employment Development Department (EDD) reported October 31. California in 2009 began borrowing from the federal government to pay unemployment benefits, and in 2012 the debt triggered a reduction in California employers’ Federal Unemployment Tax Act (FUTA) credit. The FUTA credit reduction has carried over every year since then, costing employers approximately $9.5 billion in additional tax from 2012 through 2018 (as projected by the EDD).
The FUTA tax credit reduction was 1.8 percent for 2016, and is forecast to be 2.1 percent this year. “No reduction is forecast in 2018 as California is not expected to have an outstanding loan balance,” the report stated.
Total employer contributions into the UI Fund were $5.8 billion in 2016, a slight decrease from $5.9 billion in 2015. Contributions are projected to be $5.7 billion this year, and $5.6 billion each year in 2018 and 2019. Total receipts (the employer contributions plus interest, reimbursements and other receipts) were $6.2 billion in 2016 and are projected to be $6.1 billion this year and $5.9 billion each year in 2018 and 2019.