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This page was last updated on December 17, 2001
Last week I was lucky and had a business trip to San Francisco. This is a wonderful time of the year to visit. Christmas decorations are everywhere. In the major hotels and shops, Christmas trees are decorated with beautiful lights, and shop windows have fancy displays.
The main shopping area is called Union Square. Major stores include Saks Fifth Avenue, Tiffany, Macy's, Neiman Marcus, and many other first class department stores. There are also many fine hotels since this is one of America's greatest cities.
From all appearances, the shops looked quite crowded. This is important. For most American retail stores, the Christmas shopping season is the most important time of the year. Some stores will make 40-50 percent of their business just during this time of the year.
Unfortunately, sales this year are down all over America. The recession in America, and the events of the September 11th terrorist attacks, have badly hurt the economy. The important tourists are staying away from large cities, and foreign visitors are down almost 50 percent in some cities.
San Francisco has been hurt by two major events - the collapse of the Internet economy and the recession caused by the terrorist attacks. This city has seen thousands of highly paid workers lose their jobs when the dot.coms went bankrupt. Many of those workers have now left San Francisco to find jobs in other cities or other states.
Many low paid workers in hotels, restaurants and tourist businesses have lost their jobs since fewer tourists are coming to San Francisco and California. Also, many security workers at the airport will soon lose their jobs. A new law will require that only American citizens can be security guards. An amazing 80 percent of security workers at San Francisco airport are not American citizens! 600 of these non-citizens will soon lose their jobs.
The unemployment rate in California has now risen to 6 percent. For the US, it is 5.7 percent. About 700,000 workers have lost their jobs since September 11th.
I spoke with two economists last week, and they are optimistic about the future. Both said that California will quickly recover (if there are no new major disasters.) High technology jobs will come back, and people will find new, high paying jobs. The workers in San Francisco are among the best educated in America, and will quickly start new companies.
The lower paid workers will need to be trained for new jobs. The San Francisco area is very expensive and these workers will need to be retrained for higher paying jobs.
Both economists felt that the problems of California are short term, and a good Christmas shopping season will help the state recover. And from what I saw in San Francisco, I think Californians are enjoying this season.