Don’t go looking for jobs in California

LOS ANGELES – The US jobless rate has been tracked at 6.1 percent, described as a nearly nine-year high. Employment nationwide has fallen 289,000 over the last four months, The Los Angeles Times reported, with nearly one in five of those losses in California.

California’s labor market deteriorated sharply last month as it shed 21,500 jobs even as the rest of the country combined started to gain jobs. Since February, California has lost over 54,000 jobs. Ironically, California actually outperformed the rest of America through much of the economic downturn but is now one of the weakest labor markets.

Actually, there are two markets in California, north and south. Southern California is not doing as badly as the North. Orange county only has an unemployment rate of 3.6 percent, while Los Angeles is at 6.3 percent. In contrast, Silicon Valley’s Santa Clara county is at eight percent. Yet, the county’s labor force has already shrunk by 10 percent as workers have fled to greener pastures elsewhere.

The technology bust of the late 90s is still felt, specially in Silicon Valley. But the job losses lately cover a wider range of businesses and industries. Factories have cut positions in 28 of the last 29 months. Construction, retailing, government and business services have all axed positions, The Los Angeles Times reported.

The state budget deficit, described as massive and increasing costs of doing business were blamed for California’s woes. Sounds like home. Our out of control budget deficit should be causing sleepless nights among our leaders, but they continue to reassure us that there is nothing to fear. They are trying to recall the election of the California governor. If we were not having elections next year, that’s what we should be doing too.

Much of California’s problems today could be traced to their energy problems in the past years. Energy giants, among them Enron, supplying electricity took advantage of deregulation laws to jack up rates, simulate supply shortages and make unbelievable profits. The state budget was eventually affected as the state government stepped in to protect consumers. Technology’s no longer as hot as it used to be, but California being California, it is only a matter of time before things start moving up again. In the meantime, they are not wasting time on gloom and doom. The sun’s out and it is always a great day to be out there enjoying the sun, the sea and the scenery that make California a nirvana for all.

Canada

It isn’t that great in Canada either, it seems. I got an e-mail from Bombet Arangote, one of our financial executives at Benpres who recently migrated to Vancouver. He wrote that "it is bad here as well. A lot of Pinoys of my generation who migrated here are having a hard time. With SARS and Mad Cow over our heads – and the ongoing lumber trade war with the US hirap ang Canada. The only thing that’s good right now, is the housing market. It is really hot, because of the low mortgage rates. The government has passed a law that requires them to balance the budget – so massive job cuts. Dito, kasi government ang biggest employer ng Canada."

Bombet, however, wrote to propose a scheme that should help our country develop our savings rate and, therefore, a viable local source of capital. Here is Bombet again.

• Here in Canada they have what you call RRSP, registered retirement savings plan. You can buy these from banks or other financial institutions (either in mutual funds or interest-bearing instruments) not necessarily with government institutions. And whatever amount you buy (with a cap of course, I think it’s 18 percent of previous year’s income or a certain amount), you can use that amount as tax credit. So oftentimes, people in the lower income tax bracket don’t pay income taxes and they also have investments.

• Now, any earnings from those income will not be taxed, so it accrues tax-free, but if you withdraw, any earnings of those instruments will be taxed based on one’s tax bracket. Naturally, most of the people here, do not withdraw those savings until their retirement, kasi by that time, wala na silang kita, so they are in their lowest tax bracket.

• Since these funds are managed by professional managers at hindi government, investors/savers will be more or less comfortable in the investment decisions of the fund managers. The government, on the otherhand, would effectively be able to generate more funds as a portion of these funds are invested in government treasury bills, etc. So they don’t have to get funding overseas.

• Win-win for both. I don’t know though whether this will be successful in there."

I see no reason why it shouldn’t be successful back home. Inasmuch as our social security hardly gives its retirees enough money to buy a month’s supply of hypertension pills, we need to explore options that would help middle income folks like us in our retirement years. Shielding a portion of our current income from taxes provided we keep them in investment funds that we cannot withdraw until a certain age, makes a lot of sense.

I thought someone sponsored a bill in Congress allowing for Individual Retirement Accounts or IRAs. But I have not heard much about it. I sure hope our legislators think about this and pass the appropriate legislation. Right now kasi, it is tax to the max and bahala na sila pagtanda nila.

Same thing!

Now, here’s Dr. Ernie E.

A married man goes to confession and says to the priest, "Father, I had an affair with a woman... almost."

"What do you mean almost?" questions the priest.

"Well, we got undressed and rubbed together, but then I stopped."

"Rubbing together is the same as putting it in," explains the priest. You’re not to go near that woman again. Now, say five Hail Mary’s and put $50 in the poor box."

The man leaves the confessional, says his prayers, and then walks over to the poor box. He pauses for a moment and then decides to leave.

The priest quickly runs over to the man and exclaims, "I saw that... you didn’t put any money in the poor box!"

"Well Father, I rubbed up against it and, like you said, it’s the same as putting it in!

Boo Chanco’s e-mail address is [email protected] (I am having problems accessing the bayantel address from abroad. Use this one for the meantime.)