Recession signs hit Bay Area as tax rebate is signed
Date suggests drop in local job availability – experts split on outlook
February 14, 2008 12:24 PM
While signs of an economic recession seem to be appearing across the nation, the jury is still out on whether San Francisco Bay Area residents should go into panic mode—and for college graduates to look for careers away from here.
In what is considered a warning sign for job seekers, a recent report released by the parent company of popular job search site Monster.com showed a steep
The Monster Employment Index dropped 10 points during the month of January, following a 29-point decline in the last five months. The trend may support analysts’ heightened concerns about the potential for a full economic recession.
Those numbers signify that “employers are more cautious about hiring amid softer economic conditions,” according to Hugo Sellert, research manager at Monster Worldwide Inc.
Dr. Michael Potepan, SF State associate professor of economics, studies local and national economic trends. He was hesitant to make any pronouncements about the future of the job market.
While he said 2008 “might be a harder year” for job seekers, he invoked the R-word with caution.
“It’s still unclear if we will actually experience a recession,” he said. “Nobody really knows how extensive this is, but it looks worse now than it did a couple months ago.”
Recent measures taken by the federal government to bolster the economy give Potepan some hope for the near future. He pointed to adjustments in interest rates by the Federal Reserve and tax rebates approved by Congress last week as part of the Bush administration’s economic stimulus plan.
Potepan noted that the current economic landscape is markedly different from the run up to the dot-com meltdown of the early 2000s—a recession he characterized as “fairly mild.”
“What’s happening now is all tied up with the banking industry’s problems,” he said. “It makes it harder to read the tea leaves.”
Monster’s index drop can be seen as evidence that jobs are becoming harder to come by.
“While seasonality can partly explain the dip last month, the overall slowdown in online help-wanted advertising in the region indicates lower demand for labor,” Sellert said.
Mary Huss, publisher of the San Francisco Business Times and a member of the SF State College of Business Advisory Board, said it was too early to categorize the employment index numbers as a trend.
While there may be signs of caution and conservatism on the part of employers, Huss feels the broader employment outlook is positive.
“You have to look at the larger phenomenon,” she said. “The baby boom generation is retiring.”
The exodus of this huge group of workers is an inevitable catalyst to bring new workers into the market, Huss said.
And another important factor favors Bay Area job seekers.
“It’s very difficult to get people to relocate to San Francisco,” she explained.
Huss routinely sees prospective out-of-state employees visit and be very enthusiastic about a position, potential growth and compensation.
“Then they go out and look at houses, see the prices, and that’s the end of that,” she said.
In the employment market, San Francisco would have to compete with areas like Houston, Tex., where salaries in comparable industries can rival the Bay Area but housing costs are much lower.
According to a report published by the National Association of Realtors, the median home price in Houston at the end of last year was around $155,000 while San Francisco’s median home price topped $825,000.
Huss concedes that some sectors of the job market are suffering, notably finance and lending, cautions job seekers to “follow the growth and be adaptable.”
As director of SF State’s Career Center, Jack Brewer took an optimistic view.
“We’re hearing a lot of negative stories, but employers are telling us, as far as college graduates are concerned, they’re still encouraged about job opportunities,” Brewer said.
Although Brewer has noticed the overall job availability trend, he points to a 20 percent increase in jobs listed on the career center’s Monstertrak listings over this same period last year.
Monstertrak, which is also a division of Monster Worldwide, Inc., lists employment and internship opportunities for college students and graduates.
“These are employers who have specifically asked to be posted at San Francisco State,” Brewer explained. But a tighter job market means increased competition and “employers are looking at more than just GPA,” he said. “Part time jobs, experience in student leadership and volunteering are all good things for students to have.”
Tax-paying students may get rebate by May
In addition to the considerably helpful tax return many students receive that often mitigates a shopping spree or a vacation, Congress and President George W. Bush have agreed to hook it up a little more this year.
The $168 billion bipartisan economic stimulus package, a new income tax rebate plan, was passed overwhelmingly by the House and Senate Feb. 7 and signed into law by Bush. More than 130 million Americans are expected to qualify for the rebates.
The plan will give $600 to $1,200 to most households and at least $300 to lower-income people, Social Security recipients and disabled veterans. Lower-income earners who make at least $3,000 but pay no taxes would get at least $300 per person or $600 per couple.
“This is the right plan at the right time to get our economy moving again,” said House Speaker Nancy Pelosi in a statement.
Gov.Arnold Schwarzenegger called the plan particularly helpful for California, which is grappling with a $14.5 billion deficit this year.
“Americans are one step closer to receiving much-needed tax relief to help our economy grow,” Schwarzenegger said in a statement Wednesday.
The tax rebate is a one-time cash payment to most American households. As a major part of the government’s economic plan to prevent a recession, the rebates are intended to stimulate the economy by encouraging consumer spending.
Students who file by the April 15 deadline canA expect their rebates as early as May or June.
Contact Heather Mack at firstname.lastname@example.org
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