Despite gradual reopening, California’s unemployment rate is still going up

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California’s jobless rate rose to 16.3% in May as employers continued to shed jobs despite the gradual reopening of businesses across the state.

The latest tally is up from 15.5% in April and far above the Great Recession’s peak of 12.3% a decade ago, federal officials reported Friday. In May 2019, California’s unemployment rate was 4.1%.

Millions of Californians have lost their jobs in the wake of the COVID-19 business shutdowns. Last week, an additional 240,665 applied for unemployment benefits.

“California’s job growth engine has come to a screeching halt like an automatic car transmission that suddenly gets thrown into reverse,” said Scott Anderson, chief economist at Bank of the West. “We are forecasting the deepest U.S. and global recession since the Great Depression, and California’s economy will not be spared from the pandemic’s economic and financial damage.”

California’s initial jobless claims have soared by almost 4.7 million since March 21, he added. “This is nearly equivalent to the 4.9 million jobs lost in California during the entire 18-month Great Recession.”

In contrast, the nation’s jobless rate fell slightly last month to 13.3%, from 14.7%, raising hopes that the economy might be starting a slow recovery.

California’s unemployment and jobs statistics were expected to trail the nation’s rebound, largely because of the mix of its industries.

Unemployment rates were lower in May in 38 states and the District of Columbia, higher in three states, and stable in nine states, the U.S. Bureau of Labor Statistics reported.

Payrolls grew in 46 states, decreased in Hawaii and the District of Columbia, and were unchanged in three states last month.

All 50 states and the District of Columbia had over-the-year decreases in nonfarm payroll employment in May. The largest job declines occurred in California and New York, which lost more than 2.26 million jobs each, and Texas, which lost 917,000 jobs.

Businesses reporting to California officials last month attested to the continuing explosion of unemployment. Among employers with 75 or more workers, 406,048 lost jobs at 3,409 companies.

That was down from April’s 646,894 reported layoffs. But as a comparison, before the coronavirus outbreak hit the state, just 14,328 layoffs were logged in February under California’s Worker Adjustment and Retraining Notification, or WARN, law, which requires companies to give workers 60 days’ notice of plant closures and layoffs.

Much of the COVID-19-related job loss has come at small businesses, but companies with fewer than 75 workers are not required to issue WARN notices. Workers with less than six months of employment, and independent contractors such as Uber and Lyft drivers, are not counted in official tallies.

In the first half of June, even as some businesses have started to reopen and rehire furloughed workers, official tallies reflected a historic pace, with 1,538 companies shedding 129,298 employees.

Hotels, restaurant chains, entertainment venues and travel-related businesses, the worst hit in the early stage of the meltdown, continued to furlough staff last month. Enterprise Rent-a-Car laid off more than a thousand workers across the state. More than 700 people lost jobs at San Manuel Casino in San Bernardino County. Loews Hotels in Santa Monica and Hollywood shed more than 500 workers. And the Segerstrom Center for the Arts in Orange County laid off more than 515.

Some workers may be rehired this month and in coming weeks, but with social distancing requirements and a recession squeezing pocketbooks, an untold number of temporary layoffs may endure over the long term.


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