Employment outlook for SLO County has experts divided

As the new year begins, San Luis Obispo County job seekers are no doubt hoping that employers are once again in a hiring mood.

A pair of economists who track local employment data disagree, however, on whether the county’s unemployed should be more or less optimistic about their prospects.

The latest figures from California’s Employment Development Department show a (not seasonally adjusted) 9.3 percent unemployment rate for the county in November, up from 9.2 percent in October 2009, and well above the 6.5 percent recorded in the same month a year ago. The county historically has lower rates of unemployment compared to the rest of the state and ranked fourth best in California for November.

Brad Kemp, director of regional research for San Rafael-based Beacon Economics, said the county’s unemployment rate is currently at or near its peak. And he predicts that it will gradually fall this year as consumer spending starts to rise and employers, particularly those in leisure and hospitality, create jobs. Leisure and hospitality is the largest employment sector in the county, followed by retail trade and local government.

Kemp also believes that there will be increasing demand for people to vacation, and that the county is a prime location for “staycations,” a vacation destination closer to home.

“There’s bad in front of us, but I would say that the worst is behind us,’’ Kemp said. “That means that it’s getting better. We’re moving in the right direction.”

The unemployment rate in the county could be worse, acknowledged Kirk Lesh, economist with California Lutheran University in Thousand Oaks, but he isn’t sure that an employment recovery is in the offing in 2010. The jobless rate could even increase this year, he said.

“I think this year is going to be a little nasty,’’ Lesh said. “I don’t think it (the unemployment rate) will be coming down any time in the near future.”

The economy in California remains weak, he said. The government’s fiscal troubles are far from over, which could mean furloughs turn into full-fledged layoffs. Private employers are still unwilling to make hiring commitments, and consumers aren’t ready to spend disposable income, Lesh noted.

“Consumers are still paying off debt,’’ he said. “Rather than taking a weekend trip to Pismo Beach, they’re paying off that credit card.”

He noted the year-over-year declines in the leisure and hospitality industry — 800 jobs lost from November 2008 to November 2009 — and 500 lost in the government sector over the same period. Employers — such as those bringing green jobs like solar energy — as well as federal stimulus funding, which could create some construction jobs, might help to mitigate some of the losses.

Even so, he remains cautious in his outlook.

“Things aren’t quite as rosy in SLO as we’d like it to be,” Lesh said.

Temp workers needed

Several of the county’s employment agencies say a few more businesses have been calling on them for workers.

Such agencies are seen as indicators of a return to hiring because employers skittish about making a permanent hire often bring people in first on a temporary basis.

Wendi Patterson, director of marketing for United Staffing Associates, said there was little to no growth in hiring in 2009. Employers that had downsized are now reaching out for temporary hires, although it has been slow, she said.

Patterson expects to see an increase in hiring in 2010, but she said employers are being choosy and want the most for their dollar. That can be frustrating for those who have long waited for a job, she added.

“There’s a sea of people out there who are desperate for work,’’ she said.

Danielle Bremer, client services specialist for Continental Labor and Staffing in Paso Robles, said hiring has been flat.

“It’s been about the same as last year,’’ she said. “If anything, it (job placement) has been a little bit lower.”

The company has relied on its loyal client base, businesses that have used them year after year.

“We definitely didn’t have any new clients,’’ Bremer said. “We’ve been getting a lot of inquiries, but I think they’re a little bit hesitant to go through and take that first step. In 2010, we really have high hopes employers will be able to take that first step and give us a shot.”

Julia Aguilar, co-owner of San Luis Personnel with her husband, Art, said that placements have been better than they were at this time a year ago.

“People have reduced their staffs to the point where they’ve created a need for temporary help,’’ said Aguilar, noting that placements have been primarily in the insurance and medical sectors. “In fact, several of the job orders we just filled recently were hiring temp help, but it may or may not turn into a regular position. In the past, they would tell you that it would definitely turn into a regular hire. Now, they are not sure whether they will have a long-term need or not.”

Aguilar is “cautiously optimistic” about local hiring, which she says could improve by the summer.

“San Luis Obispo County will be slower than other markets in returning,’’ she said. “I don’t see it happening until later.”

Rate is stabilizing

Juan Millan, spokesman for the state’s Employment Development Department, said the county has held up well in the face of a severe recession that created thousands of job losses throughout California.

California’s unemployment rate is stabilizing, falling two-tenths of a percent in November to 12.3 percent, according to data from the department. It was the state’s second unemployment decrease in the last three months.

“This is a good sign and hopefully the beginning of a turnaround,’’ he said.

But Millan said employers are still struggling and that job seekers should be aware that it’s a highly competitive labor force, with many experienced workers accepting lower-wage jobs.

“Economists are saying we’re bottoming out, but I think what is saving a lot of people is unemployment extensions,’’ he said. “That’s playing a big part in keeping people afloat.”Kemp, of Beacon Economics, said recuperation will take time.

However, San Luis Obispo County has better days ahead, he said.

“This is going to be a very, very slow change,’’ he said. “2010 will be a tough year, but it will be better than 2009.”