San Diego jobless rate stays high as companies offer bonuses for workers to come back

San Diego County’s unemployment rate stayed high in July as many businesses reported difficulty filling open positions, state labor officials reported Friday.

The jobless rate was 6.9 percent, down from a revised 7 percent the previous month, said the state Employment Development Department. Last year, during the same time, the unemployment rate rose to 12.3 percent as lockdown measures were in effect across the county.

San Diego’s rate was higher than the 5.7 percent non-seasonally adjusted national average during the same time and lower than California’s rate of 7.9 percent.

Despite the county’s lower unemployment rate, local companies are still struggling to fill jobs and are offering bonuses for a return to work. Harrah’s Resort Southern California in Funner announced this week it was offering signing bonuses up to $3,000. There are similar situations across the county and some restaurants offering up to $20 for dishwashers.

Analysts say there are several reasons why a lot of workers are not returning, such as child care needs during school closures, extra federal unemployment benefits and concern over rising COVID-19 cases.

There is some hope more workers could return when federal unemployment benefits — an extra $300 a week in most cases — expire Sept. 6, said Genine Wilson, a global vice president for staffing agency Kelly Services’ outsourcing and consulting group.

“I think it will increase the labor force,” she said of benefits ending, “but we don’t know if it will be as aggressively as we hoped before Delta hit.”

Wilson said it remains to be seen if the benefits will actually end in September with cases still on the rise. President Joe Biden said he intends for them to expire, but has suggested states use other federal aid to continue the benefit on their own if unemployment rates are still high, like in California. Wilson said a lot of potential employees she works with have legitimate concerns about returning to jobs where people are in close contact with others as the virus is still out there.

Another potential reason unemployment might drop is a return to in-person learning, said Taner Osman, research manager at Beacon Economics.

“Labor shortages have been driven in part by school closures,” he said, “as parents have left the labor force to care for children.”

Despite challenges, there is some good news: San Diego County has added 60,800 jobs in a year. That number is still down by roughly 167,000 jobs since right before the start of the pandemic but steady increases are a sign to employment watchers that things are improving.

Tourism has seen the biggest resurgence. The leisure and hospitality sector, which includes jobs in restaurants, casinos and hotels, has added 27,800 jobs in a year. The other big gainers were professional and business services, up by 7,600 jobs; Educational and health services, also up by 7,600 jobs; and the catch-all other services category (repair, maintenance, laundry services) up by 6,800 jobs.

The only sector to see a reduction year-over-year was financial services, which lost 1,100 jobs. Positions in the category include work in insurance, investments and credit intermediation.

Looking at the employment picture month-to-month is more grim, with San Diego County losing 7,800 jobs. The bulk was in government work, mainly education jobs, dropping by 14,800 positions. However, most of that was tied to school being out for the summer and is expected to improve as children return to classrooms.

Other sectors lost jobs, too. Educational and health services were down by 2,700 jobs, manufacturing down 1,200 jobs, and professional and business services down by 100 jobs.

Lynn Reaser, chief economist at Point Loma Nazarene University, said San Diego’s jobless rate was closer to 6.5 percent when adjusted for seasonal swings. That compares to the seasonally adjusted 5.4 percent in the nation and 7.6 percent in California.

She said removing the usual loss of jobs tied to summer school break makes the employment picture much better. Also, if more workers were more willing to return, she said the economic picture would also look brighter.

“Restaurants, hotels, and entertainment venues were star performers,” Reaser said. “Hiring would have been even stronger if businesses had been able to recruit workers.”

There might be an opportunity for workers who chose to return before benefits run out, said Phil Blair, executive officer of Manpower West.

“Beat the rush of returning workers and get the best pay, highest signing bonuses, and best shifts now,” he said. “It will not be an employees’ market forever.”

State labor officials do not seasonally adjust jobless rates for individual counties, but the unadjusted numbers show San Diego County, at 6.9 percent, was in the middle of the pack among big job centers in California in July.

The rate was 10.2 percent in Los Angeles County, 6.3 percent in Orange County, 5.2 percent in San Francisco County, 6.9 percent in Monterey County, 4.9 in Santa Clara County and 7.9 percent in Riverside County.