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San Diego County hiring remains sluggish in May as employers struggle to find workers

San Diego County hotels and restaurants are trying to hire workers as pandemic restrictions ease.
San Diego County hotels and restaurants are trying to hire workers as pandemic restrictions ease, but they continue to struggle to find employees.
(Silvia Razgova/Los Angeles Times)

Local employers added just 2,000 jobs last month as the economic recovery faced headwinds from lingering restrictions and worker shortages

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San Diego County employers reported sluggish hiring numbers in May as companies continued to struggle finding workers coming out of the pandemic.

Local businesses added 2,000 jobs last month, with much of the hiring coming from hotels and restaurants. Government employment also increased, while professional services, construction and manufacturing sectors all shed workers.

“Two constraints faced San Diego businesses in May,” said Lynn Reaser, chief economist with Point Loma Nazarene University. “Many were not allowed to fully open and even more could not find employees. Filling job openings will now be San Diego’s major challenge in the months ahead.”

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The county’s unemployment dipped to 6.4 percent in May, compared with 6.7 percent in April, according to a new report from the state Employment Development Department released Friday. Last year, the May jobless rate was 15.6 percent.

Even with the improvement coming out of the pandemic, San Diego’s unemployment rate remained well above the roughly 3 percent seen through much of 2019 before COVID-19 lockdowns.

“I was really disappointed in the numbers,” said Phil Blair, head of staffing agency Manpower West in San Diego. “We added 2,000 jobs. That is nothing in this recovery.”

While hotels and restaurants increased hiring, they are still well behind pre-pandemic employment levels. Hotels remain 11,000 workers short of 2019 totals, while restaurants and bars are down 25,000 workers.

“Hospitality and leisure are begging for employees,” said Blair. “Manufacturing is begging for employees. People are paying referral fees. They’re paying signing bonuses. They’re raising their pay 10 percent to 20 percent, and they still can’t get workers.”

Economists and employment experts cite several factors making it tough to hire. They include more workers staying home because of child care needs, particularly women. Older workers are deciding to retire, cut back hours or seek contract work.

After COVID-19 lockdowns, 39 percent of San Diego workers surveyed by global staffing firm Robert Half reported being more burned out now than they were a year earlier — up from 25 percent in a similar 2020 poll.

In addition, federal stimulus checks, coupled with enhanced $300 weekly federal unemployment benefits set to expire in September, may have eased any urgency for workers to take jobs that they don’t like.

“Workers are in the driver’s seat right now,” said Christopher Thornberg, founding partner of Beacon Economics. “It isn’t just job openings. Voluntary separations are at an all-time high, which is a function of people being confident.

“They are looking for the job they want, one that provides them with a career path,” he continued, “and they have the wherewithal and the opportunity to take their time to find that.”

In a recent survey, Robert Half found that 27 percent of San Diego workers plan to look for a new role in coming months, with the top reasons being a salary boost and greater opportunities for advancement.

John Asdell, vice president for Robert Half in San Diego, expects hiring momentum will pick up now that California has lifted most of its COVID-19 restrictions as of June 15.

“There are 9.3 million jobs open in the United States,” said Asdell. “This is the most ever since the Bureau of Labor Statistics began monitoring this statistic. I expect to see some bigger gains (in San Diego employment) in coming months.”

Even so, San Diego’s hiring appears to have lost some momentum in April and May, said Kelly Cunningham, an economist with San Diego Economic Research Institute.

“Looking at the data through May, it seems to be lagging,” he said. “There are a number of reasons for that — the economy not being fully reopened and continuing to pay unemployment benefits that are pretty generous.”

San Diego County’s total employment reached 92 percent of pre-pandemic highs in May. That trails both California and the U.S., which were at 93 percent and 95 percent, respectively.

Thornberg of Beacon Economics sees the current worker shortage as a continuation of a tightening labor market trend dating back to 2016, with has resulted in rising wages and greater workforce participation over the years.

He doesn’t expect the labor supply to match demand anytime soon.

“The net result is businesses are going to have to think about how do I rebuild my business in a way that doesn’t require as much labor as I used to use,” he said. “That means restaurants may have to go fast-casual where you order at a counter as opposed to having a waiter come over to help you out.”