Bay Area job losses top half a million
Jobless rate soars from near record low 2.6% to new high of 13.8%
The Bay Area’s once healthy economy suffered its worst setback in at least 30 years in April, a head-spinning loss of more than a half-million jobs amid government-ordered business shutdowns, the state’s labor agency revealed in a grim new report Friday.
It was a stunning turnaround for the region long known as the state’s job engine. The loss of 555,100 Bay Area jobs in April means that in just one month, 58% of the jobs the region created in the 10 years since the Great Recession have been wiped out. The region’s jobless rate is nearing 15%.
“These are horrifying numbers,” said Scott Anderson, chief economist with Bank of the West.
Over March and April com
bined, job losses in the nine-county region totaled 597,000, a bleak figure that clearly demonstrates the impact of shelter-in-place orders as state and local governments fought the spread of the coronavirus.
Weekly unemployment claim numbers had given hints of the carnage, but Friday’s jobs report does much more to specify how and where jobs are being lost.
During April, Santa Clara County lost 128,100 jobs, the East Bay shed 171,800 positions, while the San Francisco-San Mateo region erased 169,500 jobs, the state’s Employment Development Department reported Friday.
Despite the dreadful job losses, economist Christopher Thornberg, a founding partner with Beacon Economics, is convinced the battered economy will find its way back to the boom times that existed before the coronavirus began to sicken the globe.
“There is every reason to assume that the vast majority of these jobs come back once the government gets out of the way,” Thornberg said.
California lost 2.34 million jobs during April, and the statewide unemployment rate jumped to 15.5%, a jump of 10% since March, the EDD reported. California’s job losses and the state’s unemployment rate were the worst recorded in more than four decades.
“The unprecedented job losses are like nothing before seen in California history,” the EDD said Friday.
The Bay Area unemployment rate, based on seasonally adjusted numbers compiled by Beacon Economics and UC Riverside, jumped to what economists believe is the highest on record, 13.8% in April, a dramatic increase from March’s jobless rate of 3.4%. Only a few months ago, in January and February, the Bay Area’s unemployment rate was in the vicinity of a record low of 2.6%.
From the job market’s recession depths of February 2010, the Bay Area had created 960,000 jobs, reaching an all-time high of 4.09 million jobs, this news organization’s analysis of seasonally adjusted EDD figures shows. Yet in April, 57.8% of those gains were erased.
“The unemployment numbers are astronomical,” said Jeff Bellisario, executive director of the Bay Area Council Economic Institute. “You have to go back to the Great Depression to see numbers like this.”
The most brutal losses during April for the Bay Area came in the hotels, restaurants and beverage-establishments sector, which has been shoved into a dreary round of shutdowns, furloughs and job cuts due to government mandates.
In April, the Bay Area lost 170,200 — nearly half — of the hotel and restaurant jobs the region had during March. The San Francisco-San Mateo region lost 66,800 hotel and restaurant jobs for a 55% decline, while Santa Clara County lost 44,600 restaurant and hotel positions, a drop of 53%.
In the Bay Area’s three largest metro areas, Santa Clara County, the East Bay and the San Francisco-San Mateo region, every industry in the private sector lost jobs, including the typically superhot tech industry.
Tech companies in those three metro areas chopped 33,300 jobs during April, with the biggest losses in Santa Clara County, which lost 13,800 tech jobs, and the San Francisco-San Mateo area, with a loss of 10,400 positions.
In Santa Clara County, the East Bay and San Francisco-San Mateo during April, construction companies chopped 49,400 jobs, retailers shed 48,400 positions and health care companies cut 49,700 jobs. The construction industry began to reopen in early May.
Michael Bernick, a Milken Institute fellow and a former EDD director, believes state and local officials must step up the pace of reopening the shuttered economy in the Bay Area and statewide before California can dramatically reverse the employment losses of March and April.
“It is only when we have a confident, aggressive reopening in California that we can expect the job reconstruction to truly begin,” Bernick said.
Thornberg predicts that when the Bay Area, California and the nation reopen, a V-shaped recovery will be in the works. That sort of revival features a sharp decline, a brief trough, culminating in an equally sharp upswing. Thornberg points out that hiring and economic activity already have begun to revive.
“The economy will be pretty close to what it was, and that is a V-shaped recovery, it is as simple as that,” Thornberg said. “All of this says V-shaped, v, v, v, v, v.”