When California’s month-to-month report on employment was issued final week — telling us what the state of affairs was in October — Gov. Gavin Newsom rapidly issued a celebratory assertion.
“California has now totally recovered all jobs that have been misplaced to the pandemic-induced recession, however we all know this isn’t the end line,” Newsom stated, making a plug for his financial applications to counter rising client prices and “to assist create hundreds of jobs and alternatives for Californians all through the state.”
Newsom claimed that “California has recovered 101.1% of the two,758,900 jobs misplaced through the recession — the state is now 30,800 jobs above the pre-pandemic stage whole of February 2020.”
Information from the state Employment Growth Division (EDD) inform a barely completely different story. In February 2020, in keeping with EDD’s bulletin for that month, 18,756,900 Californians have been employed. The bulletin for October 2022 pegged employment at 18,502,900, or 254,000 fewer.
Numbers apart, California’s employment image has undoubtedly improved from what it was two-plus years in the past, when the state’s jobless charge had soared from much less that 4% of the labor drive to greater than 16%. Newsom had ordered widespread shutdowns of enterprise to counter the unfold of COVID-19, throwing practically 3 million Californians out of labor.
The monetary ache to tens of millions of California households was made immeasurably worse when EDD skilled a bureaucratic meltdown that prevented many jobless employees from accumulating unemployment insurance coverage funds, typically for months. Furthermore, beneath strain to clear the backlog, EDD employees then swung too far the opposite means, authorizing tens of billions of dollars in funds to fraudulent candidates.
Though the October report tells us that just about as many Californians have been employed as previous to the COVID-19 recession, the state’s total job image is extra advanced than these easy numbers.
For one factor, the experiences for February 2020 and October 2022 reveal that the state’s labor drive — the whole of Californians both employed or on the lookout for work — has shrunk by practically a quarter-million individuals. The numbers proceed a long-term decline in what’s referred to as “labor drive participation” — the proportion of working-age adults who've jobs or wish to work. Additionally they indicate that because the state’s total inhabitants ages, the pool of potential employees can also be shrinking.
Regardless of the underlying causes, the labor drive decline is one cause why California’s employers are having such nice issue discovering sufficient employees and why they're elevating wages — to as a lot as $18 an hour for quick meals employees, for instance — to draw extra candidates.
“For the previous full 12 months and for first time in a long time, California has extra job openings than job seekers,” a brand new report from the Public Coverage Institute of California notes. “Whereas that is excellent news for folks on the lookout for work, it additionally limits companies’ workforce plans and development — and wage will increase have put upward strain on costs.”
In response, the PPIC report says, some employers are implementing extra labor-saving know-how, equivalent to ordering kiosks in quick meals retailers and GPS-guided equipment in agriculture.
The labor scarcity could also be having different impacts. The sharp drop in neighborhood collage enrollment might, as an example, replicate would-be college students’ choosing larger wages in service industries over schooling.
We might look again on October 2020 as a excessive level for employment in California as a result of, economists inform us, a recession could also be on the horizon. Some employers, particularly these within the high-tech business, are already laying off hundreds of employees in anticipation of a downturn.
California has a historical past of experiencing a recession of some form about as soon as a decade and we could also be due for an additional.
Dan Walters is a CalMatters columnist.