Student Blog: Law, Markets, & The Role Of The State
HARD TO INCREASE THE ECONOMY WHEN NO ONE HAS A JOB
As we all know the economy has been suffering these past few years, and although many efforts have been made to bring us out of this recession, all efforts have failed. This failure can be shown mainly from the fact that unemployment rates continue to increase. For example, in California the unemployment rate has increased to 12.2% in September 2009 from 7.8% in September 2008. This shows that over the past year, more Californians are looking for jobs, and therefore unable to support the economy with their disposable income.
Although California as a whole is struggling, Northern California has began its upswing receiving $2.2 billion in venture capital funding in the previous third quarter, up from $1.9 billion in the second quarter. However, Southern California continues to struggle, receiving only $458 million in venture capital funding in the third quarter, down from $500 million in the second quarter. This has caused many startup business owners to migrate north so that they can receive more capital funding, a reverse of what happened during the end of the dot com era.
Even Southern California’s biggest industry, the entertainment industry, has felt these effects. Some of the longest standing and most influential Hollywood companies have seen their demise this past year, including one of the industry’s leading post-production company Pacific Title and Art Studio. After 90 years in the industry, the company closed its doors this past summer and entered a work furlough and eventually liquidated all of its assets. CEO David McCarthy said the company’s woes came due to the slowing economy and a looming actor’s strike.
This all shows that in this economy, no job, and no company, is safe, no matter what industry they are in.
Sources:
David S. Cohen, Pacific Title & Art Studio to be liquidated, Variety. (June 8, 2009), available at, http://www.variety.com/article/VR1118004696.html?categoryid=13&cs=1
Alana Semuels, California Job Losses Keep Climbing, Los Angeles Times. (October 17, 2009), available at http://www.latimes.com/business/la-fi-cal-jobs17-2009oct17,0,5039294.story
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