EDD claims at worst level since September

Jump in California’s cases exceeds increase for U.S.

Unemployment claims in California jumped by nearly 24,000 last week and topped 200,000 for the first time since September, the government reported Thursday in a grim indicator that the coronavirus may force the state’s ailing economy to relapse.

California’s weekly increase in claims exceeded the increase for the entire United States and comes as shelter-in-place orders blanket the state and further limit business activity.

Initial jobless claims filed by California workers totaled 202,600 last week, an increase of 23,900 from the prior week, the U.S. Labor Department reported.

In the United States, first-time claims for the week that ended Dec. 12 totaled 885,000, a jump of 23,000 from the week before.

The employment and layoffs trends in California are far worse than the United States overall, according to Michael Bernick, an employment attorney with firm Duane Morris and a former director with the state Employment Development Department.

“California is falling further behind the rest of the nation in employment, as its percentage of the nation’s new unemployment claims grows even larger than past weeks,” Bernick said.

The first-time claims filed in California account for 22.9% of all the claims filed in the U.S. — even though California’s labor force is only 11% of the nation’s total.

Unemployment claims had declined for most of October, a sign of improvement in California’s battered job market.

But the upswing has now vanished. Jobless claims have risen for seven of the last eight weeks, which suggests that coronavirus-linked economic woes once again threaten the state’s economy.

Even worse, improvement might prove elusive, warned Stephen Levy, director of the Palo Altobased Center for Continuing Study of the California Economy.

“The unemployment claims will stay relatively high for a while,” Levy said. “The claims probably won’t increase a lot, but they will remain at the current high levels.”

One of the reasons: A lot — but probably not all — of the workers who could have been laid off have already lost their jobs.

“A lot of the restaurant, hotel, and retail layoffs have already occurred,” Levy said.

Still, as more businesses scale back operations or even shut their doors permanently, workers could once again find themselves without a job.

“The jobless claims are going up because of the activity restrictions and the layoffs at restaurants,” Levy said.

Levy sees the impact on restaurants and stores in places such as Palo Alto.

“When I walk around now, I see a lot of places that had been open that are closed now,” Levy said.

But it’s not just restaurants that are being affected. Other industries are also feeling the pinch.

Southwest Airlines has notified state officials that the airline expects to furlough 1,000 workers in March 2021 because of the economic devastation being unleashed by the coronavirus on the travel sector.

Among the employment cutbacks being sketched out by Southwest Airlines:

• Oakland International Airport, 573 jobs.

• San Jose International Airport, 275 jobs.

• San Francisco International Airport, 158 jobs.

Even if the federal government approves a new stimulus package — which may include stimulus checks of between $600 and $700 and an extra $300 per week in federal unemployment — that government bandaid might not help California’s wounded workforce.

“The federal stimulus being discussed, even if it passes, will not translate into hiring upticks in California, Bernick said. “At best, it may halt further layoffs.”

A series of long-term solutions will have to be put into place first before California’s economy can begin to heal in any meaningful way, according to Bernick.

“No government program at this point will turn around hiring until the schools reopen, businesses reopen, and immunization is widely achieved,” Bernick said.