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Victor JanulaitisForecast West Coast MIS Job Market
May 1993

If Washington and the East Coast establishment can not help why don't they just stay out of the way?

by M. Victor Janulaitis

The great winter storm of 1996 had a devastating effect on many corporations in the Midwest and East Coast. Retail sales plummeted and many organizations are now trying to manage their expenses so that quarterly earnings will not be as bad as they currently project. That, added with the opening and closing of the government, caused many organizations to lose productivity.

Just as it starts to look up a little, one more "thing" gets in the way of the recovery taking hold on the West Coast. December and part of January were really up beat. Then came the volleys from Washington and the Supreme Court.

"Billy boy" announced his "investment" program that is a tax and spend program in the genre of loot, slash and then burn. He followed that up with the base closings that would eliminate almost 100,000 jobs from the most devastated parts of the economy. His investments are the same old set of tired re-distribution of wealth programs as defined in an East Coast liberal's view of the world.

Then the Supreme Court's ruling on in home offices brought an additional jolt. That item alone will generate over $8 billion dollars in new taxes to pay for additional spending programs. One of the least appreciated aspects of that ruling, is its impact on the West Coast job creation process for small growing firms that depend on any incentive that they can get to survive in these times. In order to help this the IRS has now instituted a special audit program to obtain these "enhanced revenues". Great, now the small businessmen will have to spend more time with government auditors and less with creating new products or dealing with customers. I guess that "Billy boy" thinks that this is time well spent. What do you expect from a guy that has lived in public housing for the last two decades.

With all of that going on, Southern California is bracing itself for the next wave of "disturbances" that are bound to happen when the King and Denny trials come to a close. out of the high cost areas of the west coast.

As a side benefit, the real estate market has started to soften. This along with the reduction of interest rates is now starting to make the cost of housing look reasonable. That may not be enough to offset the impact of downsizing and relocation for the San Francisco, Los Angeles and San Diego markets. The Denver metro area has been down for so long and the government / business alliance is starting to attract companies that want to move out of the high cost areas of the west coast.

The recreation industry and hospitality industries have been hard hit by recession and government regulation resulting in massive layoffs at Knotts Berry Farm and Karcher Enterprises to mention a few. This on top of the fact that Disney is being inhibited by various government agencies in its quest to expand is placing one more damper on the economy.

On the brighter side, there is extensive activity in many organizations that provide services to the rest of the country from the west. There still is magic in those words about the west. With improvement in the rest of the country, this recovery will be one of the first where the west is not a player. The worst is over but we must still wait a little longer to see significant improvement.

Industry Prospect
Short Term
Long Term
Aerospace Poor Poor/Worse
Distribution Poor Fair
Entertainment Fair/Poor Poor
Financial Services Fair Good/Fair
Health Care Good Good/Fair
Insurance Fair Fair/Poor
Manufacturing Fair Fair/Poor
National Consulting Good Good/Fair
Service Fair/Poor Good/Fair