CALIFORNIA — When California’s monthly jobs report was released last week — telling us what the situation was in October — Gov. Gavin Newsom was quick to issue a celebratory statement.
“California has now fully recouped all of the jobs lost to the pandemic-induced recession, but we know that’s not the finish line,” Newsom said, putting a cap on his economic programs to counter rising consumer costs and “to help create thousands of jobs and opportunities for Californians across the state.
Newsom claimed that “California has recovered 101.1% of the 2,758,900 jobs lost during the recession – the state now has 30,800 jobs above the February 2020 pre-pandemic level total.”
Data from the state’s Employment Development Department (EDD) tells a slightly different story. In February 2020, according to EDD’s newsletter for that month, 18,756,900 Californians were employed. The October 2022 bulletin pegged employment at 18,502,900, down 254,000.
Numbers aside, California’s employment situation is much better than it was more than two years ago, when the state’s unemployment rate fell from less than 4 % of active population over 16%. Newsom had ordered widespread shutdowns of businesses to counter the spread of COVID-19, putting nearly 3 million Californians out of work.
The financial pain of millions of California families was greatly compounded when EDD experienced a bureaucratic meltdown that left many unemployed workers unable to collect unemployment insurance benefits, sometimes for months. Moreover, under pressure to clear the backlog, EDD workers then swung too far the other way, authorizing tens of billions of dollars in payments to fraudulent applicants.
Although the October report tells us that almost as many Californians were employed as before the COVID-19 recession, the state’s overall employment picture is more complex than these simple numbers.
On the one hand, reports from February 2020 and October 2022 reveal that the state’s labor force – the total of Californians employed or seeking work – has shrunk by nearly a quarter of a million. people. The numbers continue a long-term decline in what’s called “labour force participation” – the percentage of working-age adults who are employed or want to work. They also imply that as the state’s overall population ages, the pool of potential workers also shrinks.
Whatever the underlying causes, the declining labor force is one of the reasons California employers are having such a hard time finding enough workers and why they’re raising wages – up to $18 a year. hour for fast food workers, for example – to attract more applicants.
“Over the past full year and for the first time in decades, California has had more job openings than job seekers,” notes a new report from the Public Policy Institute of California. “While this is good news for people looking for work, it also limits workforce plans and business growth – and wage increases have put upward pressure on workers. price.”
In response, according to the PPIC report, some employers are implementing more labor-saving technologies, such as ordering kiosks in fast-food outlets and GPS-guided machines in agriculture.
The shortage of labor can have other repercussions. The sharp decline in community bonding enrollment could, for example, reflect potential students choosing higher wages in service industries rather than education.
We can consider October 2020 a high point for California employment because, economists tell us, a recession could be on the horizon. Some employers, especially those in the high-tech industry, are already laying off thousands of workers in anticipation of a downturn.
California is used to having a recession of some kind about once a decade and we may have another one.