Labor Force Numbers Plummet in High-Cost Metro Areas
New data released by the Bureau of Labor Statistics provides finer detail on the potential long-term economic destruction caused by the COVID-19 pandemic. Expensive metro areas, including the Bay Area, have witnessed significant drops in their labor forces – those employed plus those looking for work. The Bay Area’s 6.9% unemployment rate for October masks the fact that many people have dropped out of the labor force or left the region altogether. Looking at year-over-year changes, the Bay Area labor force has fallen by over 56,000. While this number is not as large as the losses in New York, Boston, Chicago, or Los Angeles, low-cost metros are clearly outperforming their higher-cost peers—in terms of both economic recovery and attraction of new workers.
The gloomy data and growing number of companies and investors leaving the Bay Area—Silicon Valley pioneer HPE announced this week it is relocating its headquarters to Houston, Texas—highlights the urgency for addressing the region’s difficult business climate. More information on labor force participation can be found in the latest chapter of the Bay Area Council Economic Profile. To engage in the research of the Economic Institute, please contact Executive Director Jeff Bellisario.