Friday, March 27, 2009

California in Double Digits

Whichever UC unemployment prediction you buy, both are pretty damn grim.

California's unemployment rate will soar to between 12 percent and 15 percent by next spring and remain in the double digits until at least the beginning of 2012, according to forecasts released by two teams of University of California economists.

The state's unemployment rate has not reached those heights since the Great Depression.

The projections – one released today by UCLA's Anderson Forecast, the other last week by UC Santa Barbara's Economic Forecast – paint a grim picture of declining economic growth, lower retail sales, a troubled housing market and falling office prices lasting through much of 2010 ...

I don't know which dire prognostication up above is more accurate, but since California had one of the largest real estate bubbles .... and steepest real estate crashes, these high unemployment numbers are not real surprising.

On the micro and anecdotal level, I've noticed the grimness seeping into the animation studios. Everybody knows it's rugged out there in unemployment land, and behaving accordingly.

Even as employers lower salaries and tighten schedules, employees are keeping a stiff upper lip.


Anonymous said...

Boy, this all looks grim! Now i just got the Pegboard and Steve sez that I should put most of my money in cash and bands. Well, the bands are no problem, I swiped a couple out of the supply cabinet at Nickelodeon. They're kind of a pain to keep in my pocket with my cell-phone and all those smudged post-its with the phone numbers of job leads who never answer my calls. I wonder what we're supposed to do with these things? I guess a new issue of the Pegboard will explain. But cash...hells yes! I dont have very many quarters left after LA raised every parking meter in the city to ten dollars a minute and I invested a couple of ones in some Quik-pics, but I've got $5.72 saved up for my Golden Years, which ought to start any day now if I can stop getting my fingers tangled up in those stupid rubber bands...

Steve Hulett said...

Bands? I said bands?

I must have bee thinking of the Stones and Beatles. Maybe Credence Clearwater Revival.

You know, the old classics.

Anonymous said...

Unfortunately, I think this will have a huge ripple affect on the future of the animation industry in California for a long time.

As the state goes bankrupt, people continue to lose their jobs, and their homes, there will be a mass migration out of the state. There are still places in the US where the housing bubble was very minor and the overall cost of living is low.

We will see studios popping up and possibly consolidating in other parts of the US. Whether it is from large studios opening up shop somewhere cheaper (ala Sony Albuquerque) or animation veterans moving their families to start new lives and studios elsewhere. I can eventually see only a small fraction of US animation being produced in California (only the heavyweights - Pixar, DW, etc).

Who knows how long this might take. It could be 10, 20, or 30 years. But the way this economy looks, things aren't going to get better for California anytime soon.

This bubble burst and economy crash has caused a massive paradigm shift for animation and many industries for the foreseeable future.

Steve Hulett said...

I think your prediction is a trifle premature.

California got slammed for a host of reasons. Imports have cratered, and a HUGE part of the Southern California economy is tied to ships moving in and out of San Pedro-Long Beach.

California, along wth Florida, had a large portion of its propserity tied up in residential and commercial construction. And whattayaknow? California and Florida are the states that have been hammered with 40% drops in real estate (Sacramento, Inalnd Empire, etc.)

The reason that animation will survive here is, this is where the talent pool is. Never underestimate the pull of top-rade animation workers.

Which isn't to say there aren't going to be changes and adjustments. I just don't see a paradigm shift. And there is realy no accurate way to judge what the landscape will look like twenty or thirty years out.

Anonymous said...

L.A. has been where a lot of talent was situated because the studios were there, but so much has changed over the last 10 plus years. There really is a concentration of excellent talent outside the L.A. basin working on some of the biggest animated features. People are migrating to states or areas they want to live in and keeping their relationships with the studios.

Anonymous said...

The Union's Plan for Destroying the Animation Industry:

1. Bully all Major Studio's into their Jurisdiction otherwise... "we'll cry, complain and strike!"
2. Force those within their Jurisdiction to have standard non-competitive rates, forcing Companies to outsource jobs or cut them outright.
3. Don mask and become Epic fail guy
4. ????
5. PROFIT!!!

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