Job gains in California outpace the nation
Bay Area employment also increased at a higher rate than U.S. in 2021, report shows
Both the Bay Area and California as a whole are recovering far better from the mammoth job losses unleashed by coronaviruslinked business shutdowns than first thought, state government officials said March 11.
The rosier picture arrived as part of a report from the state Employment Development Department that revealed robust job gains during January and revised, higher job numbers for the whole of 2021.
The nine-county Bay Area added 16,500 jobs in January, the EDD report showed. The region's gains were led by sturdy increases in employment in Santa Clara County and the San Fran- cisco-san Mateo region.
In January, Santa Clara County added 3,600 jobs, the San Francisco-san Mateo metro area gained 10,500 jobs and the East Bay added 300 positions, the EDD reported. All the numbers were adjusted for seasonal variations.
California gained 53,600 jobs during January. The statewide unemployment rate was 5.8%, unchanged from December 2021.
Over the one-year period that ended in January 2022, California posted a 7.4% increase in nonfarm payroll jobs, which greatly outpaced the nationwide increase of 4.7% during the same 12 months, according to the EDD report.
“California's economic recovery last year was unprecedented,” Gov. Gavin Newsom said March 11 in a statement.
The Bay Area chalked up a 7.2% gain in total payroll jobs over the most recent one-year period.
The region's year-to-year gains were fueled by increases of 9.7% in the San Francisco-san Mateo
region and 6.6% in Santa Clara County. While outpacing the nation, the East Bay one-year increase of 5.6% lagged both the Bay Area and California.
California added 1.05 million jobs during 2021, which was 95,400 more jobs than the original January estimate for the number of positions gained in California last year. Similarly, in the Bay Area, the nine-county region added 235,500 jobs in 2021, which was 20,600 more jobs added than the EDD first estimated.
The changes in the estimates for the job gains during 2021 were reported as part of the EDD'S annual revision for non-farm payroll employment in California and all of its metro regions.
Job growth could remain robust through the rest of this year, said Taner Osman, research manager for Beacon Economics and the UC Riverside Center for Economic Forecasting.
“With abundant job openings
and more room to grow, we expect to see California's labor market continue to outperform the national economy in 2022,” Osman said.
While the business shutdowns that began in March 2020 unleashed huge job losses, the governor believes the closure strategy was worth it to protect Californians' health.
“Our approach has been to follow the science while supporting those hardest hit by the pandemic,” Newsom said. “It not only saved tens of thousands of lives, it got our state back to work faster and better than the rest of the country.”
Despite the job gains and the improved employment picture in California, the state's workers still face a forbidding landscape due to the runaway inflation that has savaged the economy.
The inflation rate of 5.2% in the Bay Area is the highest in more than two decades, while the nationwide
inflation rate of 7.9% marks the greatest yearly increase in four decades.
That will pose a significant challenge for workers who are struggling to make ends meet, warned Michael Bernick, an employment attorney with law firm Duane Morris and a former director of the state EDD.
“Inflation already has cut into wage gains in California, particularly the wage gains of lower-income workers, and threatens to significantly slow growth,” Bernick said.
The tech sector posted strong job gains during January, according to estimates that Beacon Economics produced from the EDD report.
In January, tech companies added 5,200 jobs in the San Francisco-san Mateo region, 3,400 positions in Santa Clara County and 2,100 jobs in the East Bay, according to seasonally adjusted numbers reported by Beacon Economics.
Some other sectors, such as hotels and restaurants, saw losses.
The technology industry appears to be in excellent shape to continue its employment surge in the Bay Area, said Steve Levy, director of the Palo Alto-based Center for Continuing Study of the California Economy.
“The strong job gains in 2021 were accompanied by a record $105.3 billion in Silicon Valley venture capital funding in 2021 that provides a foundation for continued job growth,” Levy said.
Still, both California and the Bay Area have yet to recover all the jobs they lost during March 2020 and April 2020, the first two months of the business shutdowns.
“There's a lot of work to do to both to restore those jobs that were lost,” said Patrick Kallerman, vice president of research with the Bay Area Council Economic Institute, “and get us back on a growth trajectory.”