California jobless claims rise, statewide recovery is elusive

California lags nation badly for recovering from coronavirus-linked job losses

Unemployment claims in California resumed their dreary upward march last week, the government said Thursday in a grim report that underscores the chasm the Golden State’s once-robust economy must cross to recover from coronavirus-linked job losses.

An estimated 230,400 workers in California filed for unemployment benefits during the week that ended on Sept. 19, which was 4,000 more than the 226,000 who filed jobless claims in the week ending on Sept. 12, the U.S. Labor Department reported.

The huge numbers of unemployment claims have arrived at a time when the state’s Employment Development Department is preparing to halt for two weeks the processing of new claims until the tottering agency can chip away at amountain of unpaid benefits that the EDD has failed to pay.

“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 UI claims,” EDD spokesperson Barry White said.

California’s struggles with its stubbornly high unemployment claims are highlighted by this brutal metric: Last week California accounted for a whopping 27 percent of the 870,000 jobless filings nationwide.

Even so, other measures show that a vast gulf has emerged between what the California economy is today and what it was before state and local government agencies began to impose an array of business shutdowns to combat the spread of the coronavirus.

For one thing, it’s become apparent that California lags the United States badly in terms of its track record in recovering the jobs that were lost in March and April, the worst months for job losses in 2020 amid the coronavirus lockdowns.

While the United States economy bounced back in May, June, July, and August to recover nearly half — 48 percent — of the jobs it lost in March and April, California has recovered only about one-third — 34 percent — of the 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 from the job losses amid the coronavirus.

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 rates for the two regions were comparable.

California achieved a record-low jobless rate of 3.9 percent from August 2019 through February 2020. The United State unemployment rate was also in the vicinity of an all-time record low of 3.6 percent in January and 3.5 percent in February. But once the business shutdowns began, jobless rates, as expected, began to spike.

The United States unemployment rate peaked in April at 14.7 percent, the nation’s worst levels for that metric since the Great Depression. In that same month, California experienced an even worse unemployment rate, 16.4 percent in April.

But while the nation in May immediately reported a lower jobless rate of 13.3 percent, California remained stuck at a post-Depression record worst of 16.4 percent.

In August, the United States unemployment rate improved below double digits to 8.4percent, whichwas still bad, but more in line with what one might see during an average recession. In contrast, California was still mired in double digits at 11.4 percent, and far above the nationwide unemployment rate.

“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 EDD director.

Multiple factors have hobbled California as it battle store cover.

“The regulations for business openings related to the coronavirus arem uch more strict in California than the rest of the country,” Michael said.

But Michael also pointed to the Track the Recovery web site, which measures consumer spending based on credit card activity, that shows California consumers are spending at a more sluggish pace than is the case in the United States overall.

As of mid- September compared to early January 2020, California consumers were spending 12.4 percent less, while consumers nationwide were spending 3.8 percent less.

“California consumers have cut back much more in their spending than consumers in the United States,” Michael said.