Oakland’s job market is in pretty sad shape to say the least.  The city’s official unemployment rate is one of the highest in the nation, matched and exceeded only by Detroit at this point in time.  A 17.5% unemployment rate means that Oakland’s job prospects are about as good as the average US cities were during the great depression.  This is alarming, given the fact that Oakland has a huge abundance of universities and colleges, providing the local area with a very highly-skilled, highly-educated workforce.  For Oakland, the possibilities are endless, but the city has had a very hard time getting started down the path of economic renewal, and the state of fiscal affairs within the California state government is doing little to ease their troubles.

The problem with Oakland’s economy is that it relies to heavily on second-tier sectors like services and transportation.  Wealth generation has traditionally come from sectors that can generate real growth like the high tech and biomedical sectors.  Oakland’s economy is poorly diversified, and with many of the students graduating from nearby universities, with dreams of becoming more than a retail sales manager or a truck driver or train engineer, the city has little hope of attracting the right kind of jobs that spur real, sustainable economy growth.

Oakland has traditionally had real problems with crime and unemployment for decades.  The city acts as one of the most important sea ports on the west coast, and is often overshadowed by its neighbor, San Francisco.  Oakland handles more shipping containers than nearly any other port in the world, and this fact alone should suggest that there is real potential for economic growth that is sadly going unrealized.  But the lack of outside capital investment and inability to attract outside businesses and investors has been killing this city’s economic hopes for the past decade.

The unemployment situation facing Oakland is likely to get worse before it gets better.  The 17.5% unemployment rate is also considering the fact that those who are discouraged and no longer looking for work, but who have the ability to work, are not counted in the unemployment rate.  Also, those who can no longer receive government unemployment benefits are not factored into the equation any longer.  With these two populations out of the mix, 17.5% is still extremely high.  If they were factored in, the unemployment rate would more likely be in the 25%-30% range, possibly higher.  It’s a truly sad state of affairs.

Now some of Oakland’s largest employers are in the government sector.  Both state and federal workers make up about 18% of the entire workforce, which is well over one million people.  This high number of government employees tends to restrict the flow of non-government jobs and capital, considering that the economy is being squeezed so badly by the recession anyway, and there is little room for the retail and services sectors to grow currently.  The potential for growth is there, and the labor resources exist as well, but growth cannot occur without development and investment, and these are two thing Oakland has very little of to begin with.