California Unemployment Badly Lags Pre-Pandemic Trends

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While many media outlets and business climate deniers across the state continue their fixation on the lack of a so-called “exodus” as evidence that there’s nothing to worry about when it comes to California’s economic future, the Bay Area Council remains focused on the metrics that really matter. A story this week by veteran Mercury News economics reporter George Avalos highlighted California’s struggles to restore jobs lost during the pandemic.

According to the story, “California workers filed slightly fewer initial claims for unemployment last week, but the filings remain far worse than the trends before coronavirus-linked business shutdowns began 16 months ago. The jobless claims for the most recent week are 30% higher than what they were before the business shutdowns began. In sharp contrast to California’s battered job market, jobless claims in the United States fell to their lowest level since the business shutdowns began.”

Small businesses appear to be hardest hit, with openings down almost 52% since January 2020 and revenue dropping almost 43% since early last year. “Despite the cheerleading by government officials, the small business numbers for California are not improving at all, they are declining,” Michael Bernick, an employment attorney with law firm Duane Morris and a former director of the state Employment Development Department, told the Mercury News.

The gloomy employment news comes less than a week after media coverage downplayed and badly misread results of a University of California survey that found significant and widespread discontent among residents on a range of topics, including housing costs, crime and future economic prospects. Both a press release on the results and headlines parroting the release concluded there is no California exodus – despite almost 50% of survey respondents saying they were either seriously considering leaving or giving it some thought — and largely ignored mention of any deeper concerns.

Bay Area Council CEO Jim Wunderman in a sharp commentary running today in the San Francisco Chronicle rebutted the rosy UC press release and media coverage, arguing that any focus on the so-called exodus is a distraction from the real issues facing California as it struggles to reopen its economy and restore lost jobs, particularly among lower- and middle-income Californians who are suffering the most. Wunderman emphasizes the Council’s unwavering optimism in California’s future, but cautions against complacency and over-confidence in addressing the state’s significant challenges.

Meanwhile, a broad coalition of business and industry groups from across the state that the Council has been convening over the past six months to address those challenges met again this week. Behind the leadership of Jim Wunderman and coalition Chair Clint Reilly, the New California Coalition is accelerating its work to create a new statewide research and advocacy organization that aims to mobilize a million Californians on a range of issues related to the state’s economic competitiveness. To learn more about the New California Coalition, please contact Chief Operating Officer John Grubb.

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