Big job losses for Bay Area, state
Hampered business activity results in 360,800 lost jobs in region in 2020, a decline of 8.8%
Huge job losses slammed the Bay Area and California in December, a setback that shattered a fragile recovery from coronavirus-linked layoffs and capped a dismal year for the statewide economy.
California’s job losses were so severe that they accounted for more than one-third of the 140,000 jobs lost nationwide in December, according to this news organization’s analysis of state and federal reports.
Employers in the Bay Area shed 14,300 jobs while California lost 52,200 jobs, the state Employment Development Department reported Friday.
“The impacts of the virus surge and stay-at-home orders are very clear,” said Jeffrey Michael, director of the Stockton-based Center for Business and Policy Research at the University of the Pacific. “Large job losses occurred in the most impacted sectors, leisure and hospitality, and personal services.” Most Bay Area counties were forced to curtail business activities to arrest the spread of the coronavirus under state mandates in mid-November, then enacted even sharper restrictions in early December as hospitals began to fill with patients.
For all of 2020, the Bay Area lost a staggering 360,800 jobs, a decline of 8.8% in the number of jobs in the region. During the same one-year period, Santa Clara County shed 79,400 jobs or a 6.9% drop; the East Bay shed 113,900 jobs, a 9.6% decline; the San Francisco-San Mateo region lost 118,100 jobs, a 9.9% drop, this news organization’s analysis of the EDD figures shows.
The job losses continued in December. Santa Clara County lost 7,800 jobs, and the San FranciscoSan Mateo region lost 6,700 posi
tions. The East Bay was one of the few bright spots, with a gain of 1,100 jobs, the EDD reported. All the numbers were adjusted for seasonal variations.
“The Bay Area played an outsized role in job gains for the state in recent months,” said Michael Bernick, an employment attorney with law firm Duane Morris and a former director of the EDD. “This past month, the Bay Area played an equally outsized role in job losses.”
Hotels and restaurants in the Bay Area jettisoned a jaw-dropping 14,300 jobs, according to seasonally adjusted estimates that Beacon Economics and the UC Riverside Center for Economic Forecasting culled from the EDD report.
Restaurants and hotels during December cut 6,000 jobs in the San FranciscoSan Mateo region, 4,300 in Santa Clara County, and 2,300 in the East Bay, the Beacon and UC Riverside assessment determined. The arts and entertainment industry chopped 3,300 jobs in Santa Clara County and 1,100 in the San Francisco-San Mateo area.
“This is pretty disconcerting,” said Patrick Kallerman, research director with the Bay Area Council Economic Institute. “This isn’t a terrifying picture yet, but it’s starting to get pretty scary.”
The tech sector was one of the few industries that fared well in the Bay Area.
Technology companies added 2,800 jobs in the East Bay, 2,800 jobs in the San Francisco-San Mateo region, and 2,000 jobs in Santa Clara County, Beacon and UC Riverside estimated.
“There is a huge impact on blue-collar jobs, but this could start to bleed over into white-collar jobs,” Kallerman said.
Other experts agreed that the tech sector alone won’t be enough to keep the Bay Area job market from sinking beneath the waves.
“Even with the strength in tech hiring, overall employment fell in the Bay Area during December,” said Mark Vitner, senior economist with San Franciscobased Wells Fargo Bank.
Unemployment rates rose in California and the Bay Area’s three major urban centers, according to the EDD and the BeaconUC Riverside estimates.
The jobless rate in December compared with November was:
• 9% in California, up from 8.1% the month before.
• 9.3% in the East Bay, up from 8.4%.
• 7.4% in the San Francisco-San Mateo region, up from 6.7%.
• 7% in Santa Clara County, up from 6.2%.
The economy in the ninecounty Bay Area seems unlikely to recover anytime soon, according to analysts.
“The Bay Area job market is likely to remain hobbled as long as the pandemic rages and strict business restrictions remain in place,” said Scott Anderson, chief economist with San Francisco-based Bank of the West.
Even worse, the Bay Area’s prospects might depend less on the regional economy than on external factors such as the success or failure of efforts to corral the deadly bug, experts warned.
“The outlook in the first half of 2021 will depend on the outcome of the tug-ofwar between vaccinations and new more contagious variants of the coronavirus,” Anderson said.
The coronavirus-linked lockdowns ordered by state and local government officials clearly are having an impact on the job market, according to analysts.
“Business closures to contain the spread of the virus came at the cost of jobs,” said Taner Osman, research manager at Beacon Economics. “The situation is unlikely to improve much in January.”
All of this means that hotel and restaurant workers might have to confront the bleakest of outlooks.
“It is unlikely that the hospitality sector will add jobs any time soon,” said Stephen Levy, director of the Palo Alto-based Center for Continuing Study of the California Economy. “Unemployment for these workers will remain high until the pandemic is better under control.”