Why isn’t the California economy adding more jobs faster? | State and regional



While employment in much of the United States has successfully recovered from the fallout from the COVID-19 pandemic, California remains one of the few states that has struggled to regain jobs at a pace comparable to that of the rest of the country. California continues to fall behind national stimulus efforts, and many employers in the state are wondering how to fix this.

The state’s weekly jobless claims make up nearly 20% of new US claims, even though we supply about 12% of the national workforce. And while job openings in the state are actually up 5% from the pre-pandemic period, the unemployment rate remains incredibly high. What do we need to do to get more people back to work? This session will discuss in depth what California and state employers need to adopt to ensure they attract and retain a strong workforce.


Grace Gedye

Author, CalMatters


Julien Cañete

President and CEO, California Hispanic Chambers of Commerce

Free reign

Founder, Red Door Catering

Manuel Pasteur

Emeritus Professor, Sociology / American Studies and Ethnicity

Turpanjian Chair on Civil Society and Social Change

Director, USC Equity Research Institute

Somjita mitra

Head of Economic Research, California Department of Finance

While the coronavirus pandemic shows no signs of ending, California is still recovering from the most damaging recession since the Great Depression. As of October, California had recovered only about two-thirds of the 2.7 million jobs lost in the first months of the pandemic.

The state is lagging behind the rebound rate of the rest of the United States and is not expected to experience a full recovery until late 2023, according to a recent report from the California Center for Jobs & The Economy.

One of the biggest challenges is getting people back to work, especially as new variants of the coronavirus continue to emerge and create uncertainty.

Hours after health officials confirmed that the first U.S. case of the omicron variant had been detected in San Francisco, CalMatters and the Milken Institute co-hosted a discussion on Wednesday, moderated by CalMatters business reporter Grace Gedye and titled ” The Post- COVID Recovery: Lagging Employment Rate in California. ”

Panelists explained why the mismatch exists: While California has historically had a relatively high unemployment rate, the state has also been hit hardest by the pandemic, in part because its economy relies on the tourism and travel industries. entertainment.

Here are three key points to remember:

COVID changed everything, maybe permanently

The threats of COVID-19 have required many adaptations – to new security protocols, as well as new consumer behaviors. Manuel Pastor, director of the Equity Research Institute at USC, noted some of these structural changes in the economy, including the shift from services to goods as businesses have moved away from traditional in-person services.

Workers build electric buses at the BYD Electric Bus Plant in Lancaster on July 1, 2021.

Pastor described what he called an “economy based more on mutuality” – an economy in which business owners have an increased sense of the well-being of their employees. And he noted the rise of a “just in case” economy, where business owners are better prepared for supply shortages or workers needing time off.

Perhaps the most lasting change: the shift to remote working, which Pastor says will continue as companies grapple with the fact that many workers do not want to return to the office.

Somjita Mitra, chief economist for the California Department of Finance, said the pandemic had accelerated trends already in place, such as decreasing purchases in physical stores and declining manufacturing.

Small business owners have also seen these trends take hold, noted Reign Free, owner of restaurant company The Red Door in Oakland. “People don’t throw big events or go out to dinner, so how can we responsibly serve our customers where they are? Said free.

Free also said the pandemic underscored the need for business owners to own their own space, instead of being “at the mercy of your owner.”

There are reasons to be optimistic

While there are many reasons for concern, there are also some areas of optimism.

According to Mitra, while the recession was the worst to hit the state since the 1930s – and there is still a long way to go, the economy has recovered relatively quickly. She also highlighted indications that residents are optimistic about the economy, including another way of looking at the “big resignation:”

“People don’t quit their jobs if they think the economy is going to collapse soon,” she said. “The fact that people quit and try to find a better job, or start their own business or relocate – people are very optimistic about the recovery. “

The pastor said that while there have certainly been hardships, especially among low-income and vulnerable Californians, the billions of dollars in state and federal aid and other actions have been “remarkable” for. prevent a recession that hit everyone.

Instead, there was more of a micro-recession. In addition to the ability for workers in certain industries to work remotely, rising house prices and the boom in the stock market have meant “the rich people cleaned up,” he said.

Small business owners are still struggling

The pastor called the pandemic recovery a transformative moment for workers – not so much a “big resignation” as a “big wake-up call,” in which people rethink the role of work in their lives. Besides unemployment benefits, there are a number of reasons people may not return to work, including childcare needs or health risks, Free said.

But while large businesses can stay afloat through this transformation, small business owners need more support.

Julian Cañete, president and CEO of the California Hispanic Chambers Of Commerce, said grants and loans are a bridge for many small businesses, but many have yet to close.

“It is not just the pandemic that has struck,” he said. “When you get hit by wildfires in parts of the state, it also impacts everything – jobs, recovery, everything else.”

“I just hope,” Cañete added, “that lawmakers and policymakers realize that these small investments have been important for small businesses, but it is important for our future economic growth and we must continue with them. “

This article has been reprinted with permission from CalMatters. You can see more of their coverage on the California State Government at CalMatters.org.



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