The yin and yang of California’s job picture | Cal Matters

In abstract

“California has now absolutely 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 1000’s 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 in the course of the recession — the state is now 30,800 jobs above the pre-pandemic stage whole of February 2020.”

Knowledge from the state Employment Growth Division (EDD) inform a barely completely different story. In February 2020, in line 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 fee had soared from much less that 4% of the labor pressure 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 staff from amassing unemployment insurance coverage funds, generally for months. Furthermore, underneath stress to clear the backlog, EDD staff 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 nearly as many Californians have been employed as previous to the COVID-19 recession, the state’s general job image is extra complicated than these easy numbers.

For one factor, the studies for February 2020 and October 2022 reveal that the state’s labor pressure — the whole of Californians both employed or in search of work — has shrunk by practically a quarter-million individuals. The numbers proceed a long-term decline in what’s known as “labor pressure participation” — the proportion of working-age adults who’ve jobs or wish to work. In addition they indicate that because the state’s general inhabitants ages, the pool of potential staff can also be shrinking.

Regardless of the underlying causes, the labor pressure decline is one cause why California’s employers are having such nice problem discovering sufficient staff and why they’re elevating wages — to as a lot as $18 an hour for quick meals staff, for instance — to draw extra candidates.

“For the previous full yr and for first time in many years, 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 individuals in search of work, it additionally limits companies’ workforce plans and progress — and wage will increase have put upward stress on costs.”

In response, the PPIC report says, some employers are implementing extra labor-saving know-how, equivalent to ordering kiosks in quick meals shops and GPS-guided equipment in agriculture.

The labor scarcity could also be having different impacts. The sharp drop in neighborhood collage enrollment may, for example, mirror would-be college students’ choosing increased wages in service industries over schooling.

We could 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 trade, are already shedding 1000’s of staff 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 one more.