Sat, Nov. 09, 2002 — San Jose Mercury News

Local jobless rate 7.9%, worst since '83

SANTA CLARA COUNTY TOLL 80,000 IN OCTOBER AS LAYOFFS CONTINUE

By Margaret Steen

The news just keeps getting worse for Silicon Valley job-seekers. The number of Santa Clara County residents who are out of work neared 80,000 in October -- which translates to 7.9 percent of the workforce -- and local companies continue to announce layoffs.

The county's October unemployment rate was the same as in September, which was revised upward from 7.7 percent. That's the highest since 1983 and significantly higher than the state and national numbers. The number of jobs in the county grew slightly, by 1,200.

``There are so many people out there applying,'' said Victor Loskot, a product marketing manager from San Jose who was laid off about three months ago. ``If you want to find something, you need to know somebody to get you that introduction so that they'll actually take a look at what you've got.''

Loskot has plenty of company feeling the effects of the worst job market in almost 20 years.

``Candidates have less leverage in negotiations now at every level because there's a lot of people out of work that would take the job,'' said Michael J. Reid, managing director of Michael James Reid & Co., an executive recruiting firm in San Francisco.

The statewide jobless rate was 6.4 percent in October; the national rate was 5.7 percent. (State and national figures are seasonally adjusted; county numbers are not.)

One reason Silicon Valley is hurting more than the state and the rest of the country is that the region's employers depend heavily on business spending on technology.

``Consumers have continued to spend. Government has picked up spending on defense and homeland security. The one piece of the economy that's just sort of sitting there is business investment,'' said Doug Henton, president of Collaborative Economics. ``Obviously the number everybody keeps looking at is when will companies start to spend money on information technology again?''

There are a few signs of improvement. Holiday retail hiring will add jobs in November and December. And staffing firms -- which are likely to see an increase in orders before the overall job market improves -- report that demand is at least holding steady. Some are even seeing small increases. Business services, which includes staffing firms, added 700 jobs in Santa Clara County from September to October and has been holding steady or improving for most of the year.

``I would say it's slow improvement, but there is definitely improvement,'' said Nathalie Hendricks, area vice president for staffing firm Adecco.

Kristina Bowler, district director for Spherion Staffing Group in San Jose, said many of her company's clients say they plan to hire in the first two quarters of next year.

Job-seekers like Loskot hope that happens.

``By nature I'm an optimistic kind of guy, so I'm still optimistic. I think I can do quality work for companies,'' said Loskot.

Contact Margaret Steen at msteen@sjmercury.com or (408) 278-3499.