Jobless rate tops 12% in Bay Area

State figures show some sectors added jobs in May

California’s unemployment rate is still at a level unseen in recent history, dipping only slightly to 16.3% in May, according to the latest state numbers.

The world’s fifthlargest economy added 141,600 jobs last month, but that comes after California shed a record 2.4 million in April. The state had previously reported a 15.5% unemployment rate for April, but that figure was revised upward in the latest report to 16.4%.

In San Francisco, more than 1 in 8 workers was unemployed. The 12.6% rate was unchanged from April.

The Bay Area unemployment rate stood at 12.4%

The job losses represent the undoing of two decades of employment growth.

“The number of employed persons in California fell below 15.5 million, the lowest level since April 1999, and 3.3 million below February when

the unemployment rate was at a record low of 3.9 percent,” Irena Asmundson, the chief economist at the California Department of Finance, wrote in an email. She attributed the rise in nonfarm payroll jobs partly to businesses starting to reopen.

The stubborn steadiness of the unemployment rate could be a harbinger of a long recovery, according to John Johnson, CEO of Edgeworth Economics.

“These latest reports are an indication that any recovery is unlikely to be at the same rate that jobs were lost entering this COVID recession.” Johnson said in an email.

“More likely is a gradual recovery, marked by certain sectors showing increases in hiring at different rates than others, and some sectors backtracking.” Johnson added “Overall, the jobs ‘hole’ is deep, and a recovery is going to take time and will remain connected to the containment of COVID19.”

California did see job gains across all major industries in May, with the exception of the information sector, which shed over 6,000 positions, and government, which lost more than 95,000. It is unclear how many of those are temporary furloughs and how many are permanent cuts.

While businesses are reopening in phases across the state, the number of unemployment filings in California has increased in recent weeks even as national filings have declined.

The California Employment Development Department processed 312,791 unemployment claims last week, including through the federal Pandemic Unemployment Assistance program which funnels money to business owners and those working for themselves.

That number, while still astronomical by historical standards, was a drop from the 329,289 claims processed during the first week of June but topped the 302,712 claims the agency handled during the last

week in May.

All told, the EDD has paid out $30 billion in unemployment benefits since March 16 from the state unemployment fund and emergency federal money.

The worst may not be over, said James Wilcox, a professor of economics at the UC Berkeley Haas School of Business and a former economist with the Federal Reserve.

Wilcox said federal money distributed through the Paycheck Protection Program to allow businesses to keep employees on payrolls could run out soon, potentially bloating unemployment rolls.

“If it doesn’t run out this month, it will run out next month,” Wilcox said of the federal loan fund. “How many of those people get dumped on unemployment we just don’t really know.”

Wilcox said some industries that form the pistons of the state’s economic engine may remain depressed for some time to come.

Entertainment and tourism, along with the restaurants and hotels they feed into, will feel the pain of a sputtering economy for the foreseeable future, he added.

“You’re just going to have this unusually high unemployment for really quite some time,” Wilcox said. “All this depends ... frankly on how much people dare to travel or go to movies or go to bookstores.”

Technology is one of California’s signature industries, and while some firms have seen their fortunes rise on the tides of the pandemic, some workers like Amanda Heath have found themselves laid off and wondering what the future holds.

Heath’s job in Uber’s human resources department ended this month. She was one of thousands laid off as the ridehailing business collapsed during the pandemic and the San Francisco company, already losing money, saw a breathtakingly sudden drop in revenue.

“I’m prioritizing selfcare, but also looking for a new job,” Heath said, adding that she has been taking a graphic design course to expand her skills while visiting family in Los Angeles.

“From a professional standpoint, it’s actually been OK,” Heath said. “If anything, I’ve had more of my network rally around me and lift me up,” since so many other workers are experiencing the same situation.

She said the layoff, not her first from a Bay Area tech job, has made her consider other jobs in the industry at more financially stable companies.

In November, Heath said, she was part of a large group that was laid off at WeWork, the office and workspace rental company, when that company was going through its own financial crisis.

Even with tech’s ups and downs, employment in the Bay Area has remained stronger than the rest of the state. Heath noted that and said she plans to stay in the region.

“For every one job I find outside the Bay Area, I find two or three in the Bay Area,” she said.

Johnson, of Edgeworth Economics, said the depth of the state’s economic wounds will become clearer once the initial reopening period passes. Tech may recover more quickly; other sectors more slowly, he said.

“Once you get past retail and restaurants, what is the level of permanent damage?” Johnson said. Much depends on how fundamentally consumer demand has changed.

Even if demand does recover to prepandemic levels, some industries, like fitness, will see fundamental changes.

Benjamin Rubin is a personal trainer in San Francisco. While he can see some of his business moving outside, returning to fitness studios where he has trained clients will be a challenge, he said.

“It’s great that people are doing these outdoor classes, but I’d feel weird about taking up that space right now if Grandpa and Grandma Q.

Public want to walk their doodle,” Rubin said. “It puts me in an ethical quandary.” It feels wrong, he said, to profit off limited outdoor space in the city during a pandemic.

“It’s a little bit of a kick in the teeth,” Rubin said of being forced out of the job he loves.

In the meantime, Rubin, said he has been waiting for months for his unemployment benefits to kick in. He’s surviving in part on his partner’s benefits, which she began receiving in March. He said the money retroactively showed up in his EDD account this week, but he is still waiting to be able to access it through a stateissued debit card.

But life goes on. Rubin proposed to his girlfriend last week.

“This time makes everything more immediate,” Rubin said. “Hopefully for the better.”