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First, the good news: unemployment continues to fall in California, to 11.1 percent in December from 11.3 in November. Basically, California is beginning to add jobs at a decent clip — the pace is faster than the nation as a whole. However, the state was clobbered far worse the rest of the country during the downturn, so our unemployment rate remains above the national level of 8.5 percent.
Now the bad news: for a lot of people to get a job these days, they have to create it — themselves! This is from the LA Times:
Self-employment is often the only option for workers with limited education and skills, suggested Christopher Thornberg, principal at Beacon Economics, a Los Angeles consultancy.
"They're struggling, trying to get ahead," he said. "For every guy we see selling fruit on the corner somewhere, there's another guy working as a DJ doing sweet 16 parties and probably making a good dime."
That entrepreneurial spirit is very Californian. "It's healthy," said economist Jerry Nickelsburg with the UCLA Forecast. "People stop looking for others to provide jobs and start using their own creativity."
But this surge of self-employment also underscores fraying job security and declining wages and benefits in many industries. Some hard-pressed employers are shedding full-time workers and hiring independent contractors to do the same jobs for lower pay.
Screenshot from the MegaUpload music video
USA Today reports in the federal government's shutdown of file-sharing site Megaupload yesterday:
The five-count indictment, which alleges copyright infringement as well as conspiracy to commit money laundering and racketeering, described a site designed specifically to reward users who uploaded pirated content for sharing, and turned a blind eye to requests from copyright holders to remove copyright-protected files.
It was unsealed a day after technology companies staged an online blackout to protest two related bills in Congress that would crack down on sites that use copyrighted materials and sell counterfeit goods. Congressional leaders agreed Friday to indefinitely delay action on those bills — Stop Online Priacy Act in the House and Protect IP Act in the Senate.
Critics contend SOPA and PIPA don't so much protect the rights of filmmakers, musicians, writers and artists as they do preserve an antiquated film and music distribution system.
This is one of those charts that shows the power of great graphics. In this case, the information represented here clearly summarizes the jobs crisis in Los Angeles Country following the Great Recession.
The chart comes from the Edmund G. "Pat" Brown Institute of Public Affairs' (PBI) 2011 Los Angeles State of the City Report. The individual circles provide a sense of scale for that industry — federal, state, and local government is a lot bigger than social services — while the two axis plot job growth or decline against wages. The dotted line demarcates what the PBI considers a sustaining wage, in this case $44,000 a year.
These are scary circles. Private education and health care are the only sectors that are complete above the zero level. Pretty much the entire remainder of the economy is below the line. And as you can see, there's a whole high-income cluster on the far right, the $80-100,000 region.
Mark Sullivan/Getty Images for The Broad Stage
File: Austin Beutner on stage during the preview of The Broad Stage 2010-2011 schedule at The Broad Stage on April 22, 2010 in Santa Monica.
Los Angeles mayoral candidate Austen Beutner gave a Town Hall Los Angeles speech yesterday at Center for the Preservation of Democracy in Downtown LA. The core topic? Getting "Los Angeles back to work."
In the speech, Beutner rolled out a kind of plan for a plan, highlighting areas he intends to focus on to rebuild the city's economy, which is currently facing a budget deficit of something like $200-$250 million and unemployment in LA County of 11.5 percent, three points higher than the national rate of 8.5 percent.
It's just an outline, although Beutner characterized it as an "ambitious agenda." The candidate — who came to city government as a "jobs czar" from a very successful career in banking and private equity, as well as in the Clinton Administration — zeroed in on six key job-creating areas: trade; technology and education; tourism; manufacturing; transportation; and small business.
KAREN BLEIER/AFP/Getty Images
Google reported fourth quarter earnings today and missed Wall Street's estimates by a country mile. Investors were looking for $10.51 per share. They got $9.50. This immediately gave some Google bears justification for cutting their target prices for the Internet search giant — and for making even more drastic pronouncements. For example (this is from MarketWatch):
“Is the post-Google era upon us?” asked analyst Scott Devitt of Morgan Stanley in a note to clients. He cut his price target to $590 from $642 while leaving his rating at equal-weight, or neutral.
Other analysts are keeping their calls for Google in the stratosphere. But the fourth quarter miss might be signaling something more ominous — or optimistic, depending on your perspective — than the end of the Google Age.
The beginning of the Facebook Age.
If Facebook stages, as expected, an IPO later this year, it could become overnight a $100 billion company, by market capitalization, raising $10 billion in the process. There's every possibility that investors are preparing for this earthshaking event. Google's struggles provide an ideal excuse for them to trim their Google positions to prepare to move into Facebook.
Facebook shares will be prices at a premium, given that the company probably isn't planning on selling very much of itself in its IPO, continuing a recent trend of tech companies limiting the initial "float" of shares to command a higher valuation.
So Google is under pressure at almost the same time that Facebook is poised to capture investor attention and shift the tech world decisively toward a more social, less search-driven model. Web and mobile users are spending their time on these sites and with their apps, so this is where the action is. The big question is whether they'll be able to make money off advertising in the same bountiful way that Google has from search.