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Thursday, Mar 28, 2024

Survey Finds Local Job Cuts Expected to Worsen

Already Los Angeles County has lost 150,000 jobs since January of 2008 and California job losses are estimated to be over 1 million, yet unemployment will continue to soar, according to a new survey by the Los Angeles County Business Federation. The recent poll of 455 County businesses found the number of employers that anticipate layoffs has more than doubled from last year, with 33 percent of respondents saying they would lay off workers in 2010, up from 14 percent who were asked in 2008. In the San Fernando Valley, 33 percent of respondents also indicated they would cut jobs next year. David W. Fleming, chairman and founder of BizFed, said that while economists are saying the recession is over, the impact of the downturn on businesses is just beginning to be felt. “The song is over but the melody lingers on. The pain is just beginning,” Fleming said. Although the BizFed survey predicts double-digit unemployment through 2010, the poll also indicates businesses believe economic conditions will improve next year with 44 percent of respondents (48 percent of Valley companies) saying the business outlook for 2010 will be slightly to significantly better than in 2009. This number is up from 32 percent of respondents in a survey conducted last year. The dichotomy between the business outlook and employment outlook suggests a structural shift in business operations according to Tracy Rafter, chief executive officer of BizFed. The poll findings support what many analysts have predicted to be a jobless recovery with businesses still cutting costs, and figuring out how to operate leaner in this economy to stay competitive, she said. It is because of the cost cutting and streamlining that businesses are expecting to see improvement next year, while still continuing to cut jobs, she added. The survey, which covered members of the 72 chambers of commerce, and trade associations that belong to BizFed, had a 34 percent response rate and a margin of error of 5 percent to 6 percent. It was taken from Sept. 15 to Oct. 6. Among other key findings of the survey, 91 percent of total businesses (94 percent of Valley businesses) did not apply or qualify for federal stimulus money. Only nine percent of total respondents (5 percent in the Valley) said they benefitted from the program. 75 percent indicated that health care reform is necessary but few expressed trust in government to effectively solve the problem. 71 percent said they are somewhat to very concerned about the water shortage, but 23 percent do not believe their businesses will be affected. Additionally, 75 percent of survey respondents (81 percent of Valley businesses) believe that public employee pension plans should be fixed via legislative or voter initiative. In Los Angeles, 74 percent of City respondents believe their city is not friendly to business compared to 44 percent of respondents outside the City of Los Angeles. The survey format also included 7 open ended questions which resulted in 1,400 comments on a range of issues including healthcare, city government, stimulus funds, transportation and water. “They have no clue on the “whats” and “hows” of running a business,” wrote one respondent answering the question “Is your city government friendly?” “It makes it too costly to run a business! Too many hoops to jump through; too many costly fees and taxes,” wrote another on the same issue. With regards to the stimulus funds, one respondent wrote: “I thought they had no focus on small business. It was as if we didn’t exist.” In answering the question of whether government is moving on the right track to ease gridlock, one respondent wrote: “California has always been 10 years behind state of the art transportation thinking, and then it takes them 10 more years to implement it. Los Angeles and Orange county transportation is a joke.”

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