The unemployment picture in California – the largest state by population – worsened in August, as the jobless rate ticked up to 12.1 percent.

Only neighboring Nevada – at 13.4 percent -- has a higher unemployment rate in the nation. (On the whole, the jobless rate for the country is at 9.1 percent).

California’s Employment Development Department (EDD) said employers in the state slashed payrolls by 8,400 during the month. The government in particular is shedding positions at an alarming rate – local and state government agencies cut 3,600 positions in August.

Since March, California employers have added only a net 11,000 jobs.

Esmael Adibi, an economist at Chapman University in Orange, Cal. told the Los Angeles Times: It looks like the job market is just stalled. The big question is: Is this a pause in hiring or are we going through a fundamental change in direction?

Construction, financial services, educational and health services reported job declines in August, with construction posting the largest decrease -- down 7,200 jobs.

The unemployment rate has hovered around the 12 percent level for the past year. This translates into more than 2-million unemployed Californians, many of whom have seen their 99 weeks of unemployment insurance benefits expire.

Not surprisingly, poverty levels in the state is climbing – the Census Bureau reported that 16.3 percent of California families had incomes below the federal poverty line in 2010, up from 15.3 percent in the prior year.

The LA Times reported that about 2.2-million children in the state live in poverty.

Jean Ross, executive director of the California Budget Project. Told the paper: All the research … points to adverse life effects for children that have been raised in poverty. These kids are the workforce of the state's future.

The area around San Francisco has the best employment characteristics – joblessness in Napa, Marin, San Mateo and San Francisco counties are generally below 9 percent.