The city of LA is vast and diverse, both culturally and economically.  But this fact has not kept LA from seeing better than average unemployment numbers.  In fact, the city has an above 10% unemployment rate.  That rate may be as high as 20%-25% when underemployed workers are factored in.  One of the biggest reasons for the lack of employment opportunities is the sheer size of the population in relation to the number of jobs available.  Coupled with the fact that California is now bankrupt and is issuing IOU’s to its citizens relative to the services that are usually paid out through the state and local governments, and you have a real recipe for disaster.

Los Angeles was recently a huge part of the housing bubble that was inflated in the early 2000’s and burst in 2007, with the collapse of the private real estate market nation wide.  In fact, LA has one of the highest foreclosure rates in the nation.  These foreclosures are typically just a symptom of a larger problem and reflect the population’s dire need for steady, reliable work.  California was also a place known for its excesses.  The Hollywood lifestyle has finally caught up to those who were unfit to take out loans for homes in the first place.

Economists believe that LA is in the middle of its fall to the bottom of the heap when it comes for employment opportunities.  One problematic issue has been the fact that the state of California can no longer pay out unemployment benefits for many of its citizens.  This is compounding the problems the state and its population already have.  Every employment sector is down in the state of California, even the government sector, which traditionally has been able to weather recessions in the past.  The state has had to cut back on their government budgets in every way, and this in turn has negatively affected the government jobs sector.

LA will likely not be able to climb out of its high unemployment rate until the state cleans up their bankruptcy and can show that it is capable of good fiscal management.  Another signal that the recession may be drawing to a close, a rise in home values and a stabilization of the rise in the number of foreclosures would also be a massive economic boon for LA.  The city had been known for real estate speculation, which had been running rampant until with full force the recession hit in September 2007.

The unemployment debacle that LA finds itself in will likely not improve until serious, aggressive growth in the economy can occur.  It will likely be a decade or more before the City of Angels is reborn economically, and can learn from the previous failures to diversify economically in the right ways.  There exists too much of a supply of cheap labor and too many people paying for the excesses of the past for LA to be a good place to look for employment in any sector.