Job loss in state is ‘shocking,’ stats show
April numbers the highest ever seen in 1 month
Every major industry sector in California lost jobs at unprecedented levels in April as the state’s unemployment rate hit 15.5%, officials said on Friday.
The first deep dive into how the pandemic shutdown has tarnished the Golden State’s economy showed that employers shed 2.3 million payroll jobs in April, the largest onemonth job loss ever recorded here.
Despite the historic numbers, the rate is certainly an undercount, due to technicalities in how it’s calculated and the fact that it’s already a month old, based on surveys done the week of April 12.
“The labor market today is much, much worse than a month ago,” said Scott Anderson, chief economist at Bank of the West. Since that April survey week, California has recorded 1.4 million additional jobless claims. “The devastation in the labor market is obvious.”
Gov. Gavin Newsom said last week that 25% of California
workers could be left jobless, akin to Great Depression levels.
“The unemployment rate is shocking,” said Irena Asmundson, chief economist for the state Department of Finance, which predicts an average 24.5% California unemployment rate for the second quarter, with the rate staying above 20% for the rest of the year. “But in fact it might be an underestimate of the true depth of how many people lost their jobs.”
The report from the state Employment Development Department, the first fullmonth review since shelterinplace orders took effect in midMarch, demonstrated how widely the pain is spread with significant declines in every major industry sector. The state figure is seasonally adjusted; county and metro area data are not.
“We haven’t seen anything like this in our lifetimes,” Asmundson said. “This is just horrific.”
Leisure and hospitality took the biggest blow, losing 866,200 jobs compared to last month, as restaurants, food services and drinking places continued to shed workers. Trade, transportation and utilities lost 388,700 jobs, with subsectors of retail and transportation taking huge hits.
“Those were the usual suspects; heavily servicebased jobs,” Anderson said. Growing job cuts in construction, manufacturing and government aren’t yet reflected in the numbers, he said.
But the pain is starting to hit other sectors as well.
Education and health services lost 280,400 jobs. Professional and business services lost 242,8000 jobs; other services were down 142,500 jobs. Construction lost 132,100 jobs, while manufacturing was down 118,700 jobs. Government lost 101,000 jobs; information lost 40,500; financial activities lost 31,300. The only sector where losses were muted was the small segment of mining and logging, down by 500 jobs.
In the Bay Area, there were a few bright spots. San Francisco and San Mateo counties, which reported together, gained 5,200 jobs in information and 1,800 in financial activities. San Jose and San Benito counties, another pairing, gained 3,100 information jobs and 400 in financial activities. While technology is not broken out as a sector, many highwage tech jobs are included in the information category, Asmundson said.
Salesforce, already San Francisco’s largest private employer, has said it is still hiring, and CEO Marc Benioff called on his peers to take a nolayoff pledge early on in the pandemic. But other large San Francisco employers like Uber, Lyft and Airbnb, facing plummeting travel demand, have cut thousands of employees. The impact of those workforce reductions will likely be seen in future state reports, as not all of the cuts are immediate.
Overall, the future seems increasingly bleak even as the state allows businesses to reopen, experts said.
Many industries simply won’t bounce back because they require inperson contacts — think restaurants, drinking establishments, fitness clubs, salons, entertainment. As industries such as government and education start taking severe hits, middleclass workers will be thrown out of jobs.
That means consumers will curtail spending, which will create a downward spiral effect.
“There will be persistent demand problems and we’ll be in a very severe recession even after we let people back to work,” said Jesse Rothstein, director of the Institute for Research on Labor and Employment at UC Berkeley.
“People will be really worried about their incomes, watching every penny, scaling back consumption. Even businesses that can reopen will have a hard time finding customers, so they’ll scale back themselves and then their workers will scale back their consumption. That’s how you end up with a traditional demanddriven recession.”
Mary Benedetto, 69, who was laid off April 8 from her job as a swingshift janitor at the United Club at SFO, is among those now belttightening and fearful that she won’t find work.
“It’s very depressing,” she said. “I have been looking through the internet to see if I find any jobs there, but nothing is really suitable for me.”
For now, the extra $600 a week in pandemic unemployment benefits means she can make ends meet. But once that ends, she doesn’t know how she’ll pay the $1,300 monthly rent on her small apartment in Chinatown, or be able to buy clothes, shoes and other items for her disabled adult son, who lives in a group home.
“I’m trying to save as much as I can because I don’t know how long it will last,” she said. “If I can’t find a job, I have to rely on this money to get me through.”
Health insurance is also an issue. Her union, SEIUUnited Service Workers West, has covered health care through the end of July through a trust fund.
Initially, she and her 40 laidoff coworkers thought they might lose coverage right away.
“We were so panicked — what if we can’t find any health care?” she said.