California is lagging the nation in recovering its lost jobs, and new unemployment claims continue to rise.
An estimated 230,400 workers in California filed for unemployment benefits last week, up 4,000 from the week before, the U.S. Labor Department reported Thursday. After briefly dipping below the 200,000 mark in late August, claims have been well above that level for the last four weeks.
But more tellingly, California accounted for a whopping 27 percent of the 870,000 jobless filings nationwide.
Other measures show that a vast gulf has emerged from what the California economy is today and what it was before state and local government agencies began to impose business shutdowns to combat the spread of the coronavirus.
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Video: Another 870,000 Americans filed first-time jobless claims
California lags the United States badly in recovering jobs that were lost in March and April, the worst months for job losses amid the lockdowns.
While the United States has bounced back to recover nearly half of the 22.16 million jobs it lost in March and April, California has recovered only about one-third of the 2.62 million jobs it lost during the two brutal months.
“California has definitely been rebounding at a much slower pace than the United States,” said Jeffrey Michael, director of the Stockton-based Center for Business and Policy Research at the University of the Pacific. “It’s a very slow recovery in California.”
The statewide unemployment rate, another important measure, also illustrates California’s feeble recovery.
Although California traditionally has a slightly higher jobless rate than the nation, in late 2019 and during the first two months of this year, the state and national rates were comparable.
California achieved a record-low jobless rate of 3.9 percent from August 2019 through February 2020. The United States unemployment rate was also in the vicinity of an all-time record low at 3.6 percent in January and 3.5 percent in February. But once business shutdowns began, jobless rates began to spike.
The national unemployment rate peaked in April at 14.7 percent, the worst level since the Great Depression. In that same month, California experienced an even worse rate, 16.4 percent.
But while the nation in May immediately reported a lower jobless rate of 13.3 percent, California remained stuck at its post-Depression record of 16.4 percent.
By August, the United States unemployment rate had improved to 8.4 percent. In contrast, California remained in double digits, at 11.4 percent.
“The high number of regular unemployment claims in California continue to indicate the high number of furloughs turning to layoffs,” said Michael Bernick, an employment attorney with law firm Duane Morris and a former director of the state’s Employment Development Department.
The huge numbers of claims have arrived as the EDD is preparing to halt for two weeks the processing of new claims until the tottering agency can chip away at a mountain of unpaid benefits. The claims filed last week will still be processed.
“Sunday, Sept. 20, was the first day EDD stopped accepting new unemployment benefit claims as part of the department’s nearly two-week pause of new claims,” EDD spokesperson Barry White said.
Since business shutdowns began in mid-March, a jaw-dropping 8.8 million initial claims for unemployment benefits have been filed by California workers.
Multiple issues have hobbled California as it battles to recover.
The business shutdowns are one factor, according to Michael, who said California, which was among the first in the nation to shut down, has stricter regulations for businesses reopening than the rest of the country.
But Michael also said California consumers are spending at a more sluggish pace than their national counterparts, according to the Track the Recovery web site, which measures spending based on credit card activity.
As of mid-September, California consumers were spending 12.4 percent less than before the pandemic, while consumers nationwide were spending 3.8 percent less.
California’s tourism industry has yet to recover. And while the tech sector in Silicon Valley has helped weather the economic storms, high tech isn’t enough to fully ward off the effect of the countless restaurant, retail and hotel workers who have lost their jobs.
“A lot of sectors that are important to California have been hit really hard,” Michael said. “The entertainment industry has been hit hard. San Francisco and Orange County are seeing some big losses from the decline in tourism. The regulations on restaurants and indoor dining are having a major effect.
“But changes in behavior in California also are part of it,” Michael said.
