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Business and Labor

California Lost Record 2.3 Million Jobs In April As Unemployment Rate Spiked To 15.5%

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California lost a record 2.3 million jobs in April and its unemployment rate nearly tripled to 15.5%, reflecting the swift and widespread economic pain caused by the COVID-19 outbreak and the forced business shutdowns.

The figures were released Friday in a report by the state’s Employment Development Department. The positions lost and jobless rate surpassed those during the Great Recession, when California lost 1.3 million jobs over two and a half years, from July 2007 to February 2010, and the jobless rate hit 12.3 percent during the worst of that economic crisis.

“The unprecedented job losses are like nothing before seen in California history in a current data series that dates back to 1976, and are a direct result of the impacts of the COVID-19 pandemic,” EDD said in the report.

As recently as February, California had an all-time low 3.9% unemployment rate and a record job expansion streak of 120 months, surpassing the previous best stretch in the 1960s. But those achievements reversed course in March when the jobless rate ticked up to 5.5% and the state lost nearly 100,000 jobs, in the early weeks of the COVID-19 outbreak.

Economists said they expected deep April job losses, given that the economy largely shut down last month, but the numbers still jump off the page.

“The overall state numbers are devastating, but in line with our expectations,” said Jeff Michael, executive director at the Center for Business and Policy Research at the University of the Pacific in Stockton. “We expect another million jobs lost in May and the unemployment rate could surpass our initial projections of 19% statewide for March.”

Lynn Reaser, chief economist at Point Loma Nazarene University, said the April report shows “a massive shock to the system.”

“It’s extremely notable not only for how deep the losses are but how they touch every single sector,” she added.

Indeed, every one of California’s 11 industry sectors lost jobs in April. Worst hit was leisure and hospitality, which dropped 866,200 jobs, more than double the amount lost by trade, transportation and utilities, which lost the second most positions, 388,700.

In the Sacramento region, the unemployment rate hit 14.2 percent, up nearly 10 percentage points from March, and employers shed 151,000 jobs, according to the state report. Those figures reflect the counties of El Dorado, Placer, Sacramento and Yolo.

Leisure and hospitality lost 52,000 jobs, which includes 45,000 jobs lost in accommodation and food services and 7,000 in arts, entertainment, and recreation.

The economic jolt has forced some, like former Lyft driver John Anderson of Elk Grove, to find a new profession. As rides dried up in April, Anderson found a job driving a semi tractor trailer. He’s now away from his wife and 11-year-old son for months at a time, but the pay is helping keep his family afloat.

“My wife got laid off on May 12 from her job in Elk Grove,” Anderson wrote in an email from Virginia. “Things are still very much up in the air since now I will be away from my family 3-4 weeks and then home 3-4 days, so my ability to help them is really limited.”

Others, like Sacramento substitute teacher Ryan Sharp, who has gone without work since March, said they are still searching for their next job and keeping safety in mind.

“For me personally, I don’t think I’d feel comfortable going back to subbing,” Sharp said, noting his roommate is immunocompromised and he worries about spreading COVID-19. “I think I’d like to find a job that I can do remotely.”

Still others said the jobs they’ve taken during the pandemic won’t carry them much longer. Former rideshare driver Evelyn Williams, 46, who recently moved from Sacramento to Bakersfield, said she now delivers groceries six days a week for InstaCart.

The pay is good, she said, but “I can’t keep up because of my physical issues.” Williams said she plans to go back to school to study health care administration to hopefully find a job that’s less taxing.

Friday’s report showed the number of unemployed Californians rose to nearly 2.9 million since mid-March, which is greater than the 2.2 million peak during the Great Recession, which took more than two years to reach, according to the report. Since mid-March, 5.1 million Californians have filed first time unemployment claims, EDD reported this week. Those include people who have lost jobs or had hours reduced.

Reaser, the economist at Point Loma Nazarene, said she expects California will see “a rapid recovery.” She cautioned, however, that the exact pace depends on how safe consumers feel when they return to stores and restaurants, whether consumers still have money to spend and how quickly businesses can get back to full capacity.

A report this week shows a majority of recently unemployed or furloughed Californians are confident they’ll get their jobs back. Seven out of 10 people making new jobless claims in late April and early May expect to be recalled by their employer, according to findings by the California Policy Lab at UCLA. That figure is substantially higher than an average of 40% before the crisis, but has continued to decline from a peak of 91% at the beginning of the crisis, the report said.

Michael, the economist at the University of the Pacific, said one of the most surprising figures in the April jobs report is the 20.8% jobless rate in Los Angeles County.

“We expected Southern California and Los Angeles to be the hardest hit, both for economic structure and for the fact that COVID has been significantly more severe there than other parts of the state,” Michael said. But “to see unemployment in Los Angeles higher than it is in Fresno, higher than it is in Stockton, higher than San Bernardino, it’s really striking.”

Reacting to the April jobs figures, Gov. Gavin Newsom's administration issued a joint statement from Labor Secretary Julie Su and Acting Director of the Governor’s Office of Business and Economic Development Chris Dombrowski, restating the governor's call for federal support to states.

“We have gone from a record low unemployment rate to a record high. As Governor Newsom has said, this is our collective sobering reality, and without additional assistance from the federal government, the very programs that will help people get back to their lives and get back to work, will continue to be impacted.”

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