Thursday, May 15, 2008

90s Recession: The Good Ol' Days?

From the Modesto Bee:

During the recession of the 1990s, government in general continued to hire. Sure, the state made the cities, counties and schools bear the brunt of the hurt. Some programs were eliminated or scaled back. But Stanislaus County continued to grow in population throughout that time. School enrollments continued to rise. Law enforcement grew in numbers.
...
Now, some experts say, we're in or are heading into another recession. If the valley's housing market isn't totally in the gutter, it's right on the edge of the sidewalk next to your Gilton's bin on pickup day.
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[J]ob seekers are again turning to the public sector. But it's different this time around. Local governments aren't hiring, either -- certainly not as much as they did in the 1990s. In fact, they, too, are freezing jobs or sending out layoff notices...The county's library system will cut 94 part-time jobs...Modesto City Schools will eliminate 260 full- or part-time jobs -- 61 of which already are vacant -- as it trims $11.6 million.
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It's enough to make your average job hunter yearn for the good ol' days. But who'd have thought the good ol' days would include the recession years of the 1990?
From the Stockton Record:
According to the San Joaquin County Office of Education, cuts in the county's four largest school districts - Stockton, Lodi, Tracy and Manteca - could result in layoffs of 103 teachers, 35 campus safety and security officers, and 92 other staff members.
From the Appeal Democrat:
The demise of the Sierra Cedar facility put nearly 70 full-time area employees out of work...The mill's closure followed news that NHIC, a Marysville insurance claims processing center with 220 employees, is scheduled to close Aug. 29.
From the Sacramento Business Journal:
[Regional] home sales improved 28 percent in April, compared to March and 40 percent better than April 2007, according to Trendgraphix, a division of Lyon Real Estate. In addition, home inventory declined 11 percent from a year ago -- and 23 percent less than the record high reached in August 2007.
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The median home price [in Sacramento County] dipped to $235,000, from $253,000 in March and $355,000 in April 2007.
From the Auburn Buzz:
The private Winchester Country Club and 18-hole golf course in Meadow Vista quietly fell into court-ordered receivership May 8 as part of an arrangement worked out between its high-profile owner – famed highway and bridge contractor Clinton Charles “C.C.” Myers – and Wachovia bank representatives, according to clubhouse sources. While a receivership team met with clubhouse employees last week to learn about the operation, Myers continued his race against the calendar to keep the development out of foreclosure – noting there are “many interested buyers and investors.”
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Not everyone would agree with Myers’ optimism, however. Several sources, who asked not to be identified, said it’s unlikely a deal would come together before next week’s deadline. The bank could offer Myers an additional extension period if it believes a deal can be brokered that would keep the estimated $65 million default off its books.

14 comments:

Max said...

Just saw this headline in the Bee:

Car-parts jobs head to Mexico

A Rancho Cordova car-parts factory will lay off most of its workers next month, after completing the sale of much of its business to a competitor. Their jobs will be sent to Tijuana, Mexico.

An estimated 144 workers will be let go by Automotive Importing Manufacturing Inc., or AIM, according to a notice filed with the state. The 40-year-old company remanufactures, or overhauls, used alternators and starters.

STOP ROSEVILLE CRIME said...

Some hear that "giant sucking sound" coming from the south? he he.

Deflationary Jane said...

"US companies want us as consumers but not as employees"

One of the more brilliant quotes from Calculated Risk.

sacramentia said...

"US companies want us as consumers but not as employees"

This really ticks me off .. Do you know of any way to figure out how to buy more American.

Even the damn bubble soap for my daughters baths says 'made in china'

I'd rather pay a little more, have a little less stuff, not have to talk to India for customer support, and have a stronger dollar.

David said...

"This really ticks me off .. Do you know of any way to figure out how to buy more American."

This may seem like a strange suggestion, but push for public finance of elections. Maybe if the politicians weren't payed off by the big companies sending the jobs out of the country we could turn some of this around.

Gordon Gekko said...

Sorry to be the realist, but we're never going to compete with 3rd world countries when it comes to producing low skill goods.
Here's an example, I looked into opening a call center in the Philippines about a year ago. The average wage for a call center worker is $10 per day plus 1$ a day for benefits. They work 12 hours a day, 6 days a week without complaint. You can fire someone there for any reason without cause. All additional overhead expenses are 1/4 of what they are in America.
What rational company would want an operation in America if they could run one so much cheaper in a 3rd world country... none.
What can you do to change it? Nothing. Plan ahead by getting a job that can't be outsourced and invest outside the US. Over time, the US standard of living will fall and theirs will rise until an equilibrium is reached.

Patient Renter said...

US companies want us as consumers but not as employees"

Man, that hurts... because it's true. Where/when was that quote posted?

Deflationary Jane said...

PR,

Not sure but it's brilliance hit me like a ton of bricks. I'm now seeing it pop up all over, even in my local politics.

paranoid renter said...

>>>>
Here's an example, I looked into opening a call center in the Philippines about a year ago. The average wage for a call center worker is $10 per day plus 1$ a day for benefits. They work 12 hours a day, 6 days a week without complaint. You can fire someone there for any reason without cause. All additional overhead expenses are 1/4 of what they are in America.
What rational company would want an operation in America if they could run one so much cheaper in a 3rd world country... none.
>>>>>>

It depends on the effectiveness of the operation there as well. If you hire tech support and they keep pissing all of the callers off, this will result in losing customers and consequent revenues. That's what Dell experienced and they have brought their business support back to North America.

People sending call centers abroad forget that there's something called emotional intelligence. They think support can be provided by a computer doing voice recognition but now they're finally figuring it out.

With respect to manufacturing, or any non-customer facing job, it's a bit harder to see the effect.

Until business executives start to wisen up that # of man hours does not measure real output in many areas, we will have to live with jobs moving to cheaper places.

Consider the job of a software engineer. You can have crappy software that is constantly fixed in crappy ways by tons of engineers. Or you can have good code written by a few good engineers that needs very little babysitting.

That business mentality pervades the US. All independent services related businesses are losing out to chains. I can't believe how we are now seeing chains for things as personal as massages! The whole concept of personal touch is gone with these chains...

Oh no...there I go whining again.

Patient Renter said...

Oh no...there I go whining again.

I'm with ya. I'd like for nothing more than the breakdown of the giant corporate system. The thing I dislike most about it is the threat to our liberty that corporations pose (ala lobbying, etc). I'm just not sure how it's going to happen anytime soon.

luca said...

housingtracker.net inventory has been stable for some time now when seasonally we should see a huge gain in inventory. Maybe the market is bottoming? We have even less inventory at this time that we did at the exact time last year.

maybe the bottom wont be dropping out of prices like before- more of a long somewhat stabilized recovery?

I am worried that all the people with large amounts of negative equity in their homes will continue walking away from their debts even more rather than staying put.

We'll see

Jacob said...

Well we may be at the bottom, many analysts have said we weere at the bottom each month for the past 2 years so eventually we will be.

But foreclosure rates keep rising and until that stops happening I dont think we are anywhere near the bottom in terms of price.

Maybe sales will level off but prices should continue to trend down for some time.

neverborne said...

I think the real question is how much shadow inventory the banks are holding. If some sort of dam breaks and they decided to unload all this stuff, then prices will tank again, but if they keep releasing it at a trickle, then prices are going to stabalize.

Regular non-REO sellers seem to be withdrawing from this market and probably won't be back until prices recover somewhat, unless their really desperate.

paranoid renter said...

>>>>>
housingtracker.net inventory has been stable for some time now when seasonally we should see a huge gain in inventory. Maybe the market is bottoming?
>>>>>

Basically with the current market, it's no point trying to sell. Either hold on and rent it out (if you actually have the resources to do that or if you bought cheap and your mortgage is comparable to the rent you can get), or just wait until it is foreclosed. That's the reason why the inventory is low.