Murtaza Baxamusa of the Center on Policy Initiatives says that San Diego’s shortage of middle-class jobs “is a very pertinent problem.” He feels that unemployment in San Diego “will hover around 10 percent for a while.” But he doesn’t think high unemployment will become the new reality: “There is more awareness of the macroeconomic impact [of high unemployment] on Main Street. This will not be accepted for too long.”
Nationally, “Unemployment will be above 8 percent for several years,” says economist James Hamilton of the University of California San Diego. Like Baxamusa, he believes a weaker dollar could help employment. On August 6, the U.S. Labor Department revealed that July job numbers were weak, and the unemployment rate remained at 9.5 percent. Some economists think the Federal Reserve will try to push long-term interest rates even lower, and the government might try even more fiscal stimulus. Hamilton, however, doesn’t think that such initiatives will dramatically improve the job picture. And they will worsen the nation’s financial stability: “We don’t have unlimited ability to borrow,” he warns.