The Mercury News Weekend

California’s jobless claims keep climbing

Nearly 11 million new filings made since coronaviru­s shutdowns began

- By George Avalos gavalos@bayareanew­

California’s feeble economy ended a brutal 2020 on a bleak note Thursday: A staggering 10.8 million workers have filed new claims for unemployme­nt since coronaviru­s-linked shutdowns began and new claims rose again last week amid widening worries about the deadly bug’s spread.

Initial claims for unemployme­nt benefits in California totaled 167,600 for the week ended Dec. 26, an increase of about 9,000 from the

158,700 in first-time jobless claims filed the prior week, the U.S. Labor Department reported Thursday.

California’s increase was in sharp contrast to the national trend. Across the U.S., initial claims for unemployme­nt benefits totaled 787,000 last week, down 19,000 from the prior week, the Labor Department reported.

Since government-mandated business lockdowns began in mid-March, California workers have filed a jaw- dropping 10.77 mil

lion initial claims for unemployme­nt, this news organizati­on’s analysis of the federal reports shows.

“As it has ( been) for the past two months, California’s new claims are above those of other states,” said Michael Bernick, an employment attorney with the law firm Duane Morris and a former director of the state Employment Developmen­t Department.

California accounted for 21.3% of all initial unemployme­nt claims filed in the nation. That was higher than the week ending on Dec. 19 when the state made up 19.7% of the U.S. tally.

The state’s share of U. S. claims is particular­ly dis

turbing given that California’s total labor force represents just 11% of the national total.

Bernick warned that the jobs that have been lost in California during the coronaviru­s- linked recession won’t come back anytime soon.

“The impacts of this economic downturn will be greater than the four previous downturns of the past 40 years,” Bernick said.

Bernick believes the coronaviru­s economic contractio­n will exceed California’s manufactur­ing downturn in the 1980s, the aerospace slump of the 1990s, the dotcom meltdown of the early 2000s and the Great Reces

sion of 2007 through 2009.

With the majority of the state’s counties under the most restrictiv­e tier as coronaviru­s cases surge and hospital capacity shrinks, many businesses are hard-pressed to operate if they are not prohibited altogether.

A four-week moving average that economists use to smooth out weekly volatility, such as a sharp one-time drop in the week that ended Dec. 19, outlines what’s happened in the past month.

Over the four weeks that ended Dec. 26, California’s initial claims averaged 167,600 a week. That was up 9,300 from the weekly average for the four weeks that ended on Dec. 19, this

news organizati­on’s analysis of the claims reports shows.

The rise comes as the EDD continues to struggle with various components of its response to requests from millions of people trying to process, update or obtain informatio­n about their unemployme­nt claims.

In a report to the state Legislatur­e, the EDD disclosed that from Dec. 6-19, the agency’s phone banks received 4.44 million calls. The EDD answered 474,400 — or 10.7% — of those calls. The EDD estimated that 370,100 of the inbound phone calls were from unique callers. In other words, numerous people phoned more than once.

Longer term, the big problem for California appears to be the shattered hotel, restaurant, cocktail lounge and retail sectors, along with a host of small businesses such as hair salons and other personalca­re outlets.

Bernick believes reviving those sectors will require interventi­on by state government officials.

“Rebuilding California’s decimated small-business economy should be a lead goal,” Bernick said. “This will require more changes in state policy beyond reopening the economy.”

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