The Mercury News Weekend
California jobless claims see big drop
Decline below 100,000 offers possible economic bright spot
New California unemployment claims fell sharply last week and dropped below 100,000 for only the second time since government-ordered business shutdowns to combat the coronavirus began, the government reported Thursday.
Workers in California filed 89,500 initial claims for unemployment last week, a decrease of 50,100 from the prior week, the U.S. Labor Department reported.
In the United States, workers filed 730,000 initial claims for unemployment during the week that ended on Feb. 20, a decline of 111,000 from the 841,000 claims filed during the week ending Feb. 13, according to the labor agency.
The decline below 100,000 benchmark offers a possible bright spot in the forbidding landscape for the job markets in California and the Bay Area, which have been battered by business shutdowns that state and local government agencies have orchestrated in a quest to combat the spread of the deadly bug.
For 45 of the last 47 weeks, unemployment claims in California have been well above 100,000, this news organization’s analysis of the jobless claims shows.
The only other modest exception to the 11 months of dismal unemployment reports for California came during the week ending on Jan. 23.
Even with the decline in claims to approximately 89,500, that weekly total far exceeds what had been the normal pace of jobless claims prior to the start of the business shutdowns in midMarch 2020.
During January and February of last year, unemployment claims averaged about 44,800 a week — half of the totals for last week.
The ongoing layoffs have forced California workers out of their jobs in record numbers. Worsening the pain for workers are the ineffective efforts by the state Employment Development Department to pay out-of-work California residents in a timely manner.
For nearly a year, a broken phone center and glitch-hobbled website have frustrated the EDD’s efforts to pay jobless workers quickly and accurately.
To worsen matters, for the last few months, the EDD has also been disgraced by a string of fraudulent payments the state agency made totaling billions of dollars.
As a result, some experts and state lawmakers have expressed skepticism about the accuracy of the EDD unemployment claims estimates.
“It’s too soon to tell if this will last,” said Steve Levy, director of the Palo Alto-based Center for Continuing Study of the California Economy. “The EDD is having all sorts of trouble processing claims and distinguishing real claims from fraudulent ones.”
Despite the steep drop in jobless claims, California unemployment claims are abnormally high when compared with the weekly claims in the United States.
Last week, California accounted for 12.6% of all the unemployment claims filed nationwide, even though the state’s labor force is only 11.8% of the nation’s labor force. The comparisons were based on numbers that weren’t adjusted for seasonal variations.
Ultimately, however, any real improvement in the weak job market in the Bay Area and California is unlikely to materialize until coronavirus vaccinations and herd immunity against the deadly bug coalesce into effective protection.
“The job picture is going to improve,” Levy said. “COVID cases are down. Silicon Valley is going to move into the red tier for both Santa Clara County and San Mateo County. “Real improvement in the job market is going to be tied to controlling the pandemic.”
However, long-lasting and permanent improvement may prove elusive until employers actually begin to scout for workers in a big way and bring the recruits on board, or re-hire their laid-off employees, in the view of Michael Bernick, an employment attorney with law firm Duane Morris and a former EDD director.
“These numbers indicate the scope of layoffs, not hires,” Bernick said, referring to the weekly unemployment claims. Bernick added, “There is no indication yet in California that hiring is picking up significantly.”