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California’s unemployment falls below COVID-19 limits

California’s labor market improved slightly in August, but the state has regained only a third of the jobs it lost since the COVID-19 pandemic forced thousands of businesses to close.

The state added 101,900 positions last month, mainly due to temporary employment of federal census takers, which increased state salaries to about 15.87 million, state officials reported.

By July, employers had hired 83,500 workers after Gavin Newsom’s government and county officials allowed many jobs to be resumed.

Compared to August last year, California̵

7;s wages fell by 9.1%. About 2.6 million jobs were lost in March and April due to the coronavirus.

Across the country, wages fell by 10.25 million jobs between August 2019 and August 2020, a loss of 6.8%.

California’s unemployment fell to 11.4% last month from 13.5% in July. “The small reduction is not bad news,” said Fernando Lozano, an economist at Pomona College. “But unfortunately, sectors with the most vulnerable workers in services, leisure and hospitality are still seeing an increase in unemployment.”

August was the first month since March, when the pandemic took off, that unemployment was below 12.3%, which California reached in 2010 during the height of the redundancies caused by the great recession.

In February, California’s economy was booming, with unemployment at just 3.9%.

Los Angeles County unemployment in August, 16.6%, was much higher than the state level and worse than all other California counties except Imperial, where unemployment was 22.9%. LA County has suffered disproportionately from losses in tourism, business travel and the entertainment industry.

What seemed like encouraging news about California’s unemployment rate was diminished by the fact that the state’s rate was much worse than the country’s. US unemployment fell to 8.4% in August from 10.2% in July.

California has the country’s fifth highest unemployment rate, only after Nevada, Rhode Island, New York and Hawaii.

In the Golden State, as in the nation, many people have left the workforce, counting those who have jobs and those who are looking for work. In August, California’s workforce shrank by 117,000 people, accounting for about a third of the decline in unemployment. Since February, 807,000 have lost.

“People are worried about being infected with the coronavirus, having childcare or other family responsibilities, or seeing little prospect of employment,” said Lynn Reaser, an economist at Point Loma Nazarene University in San Diego.

Reaser predicts that California’s labor market will worsen this fall. “Most of the state counties are in the most limited of the four risk zones recently established by the governor,” she said. “So many companies will be restricted or closed.”

Unemployed Californians are on a worn safety net. The federal government’s $ 600-a-week unemployment benefit, paid to those who qualify for government benefits, expired at the end of July.

California Unemployment Insurance covers about half of the average weekly wage up to $ 450. The federal supplement would have allowed many unemployed people to stay afloat and pay for basic living expenses.

“When it rains, it pours,” said Sung Won Sohn, an economist at Loyola Marymount University. “The partial reintroduction of economic restrictions due to COVID-19, the forest fires and the end of the federal government’s stimulus program had a major impact on employment in August.”

The Congress Democrats had adopted a bill to extend the $ 600 supplement, but it was blocked by the Republican-led Senate, which sees the benefit as too generous. The stalemate is expected to continue until the end of the year.

An executive order by President Trump last month approved $ 300 a week in additional benefits under the Lost Wages Assistance program, but it will expire this month. The new supplement does not cover workers who receive less than $ 100 a week in state unemployment insurance, which excludes 192,000 of the poorest Californians, according to a study by the California Policy Lab.

Even a majority of those who receive the additional payment of $ 300 will have benefits below the poverty level, with the total benefits averaging $ 575 per week, the report says.

“We expect job growth to only get tougher from here,” said Scott Anderson, an economist at the Bank of the West in San Francisco. “The inability of Congress to cope with a new rescue package [and] California fires could further delay the state’s economic recovery.

“California lost net migrants due to high cost of living and taxes even before the forest fires, and these trends are likely to increase as more people search for greener pastures. This means fewer jobs in sectors such as retail, education, health care, government and real estate than would be created if immigration were stronger. ”

Six of California’s 11 industries got jobs last month. The government grew by 66,100 thanks to the census and the employment of teachers for the school year. Trade, transportation and tools received 26,000, using transportation and warehousing, as companies such as UPS, FedEx and Amazon added jobs. General employment of goods benefited from consumers buying more food because they eat out less.

Leisure and hospitality decreased by 14,600, which is the largest job loss in any industry, as hotels and restaurants continued to suffer. The sector has lost 561,900 jobs since March.

August’s small overall rise in employment contrasts with gloomier economic indicators, including “unemployment claims well above national interest rates,” said Michael Bernick, a former head of the California Employment Development Department. “A sharp decline in employment and consumption spending shows a stagnant state economy.”

In August, Los Angeles added 11,500 jobs to its salaries of about 4 million; unemployment fell to 16.6% from July 18.5%. Year after year, the county lost almost 1 in 10 jobs.

Orange County got 3,700 jobs in August for a total of 1.48 million. During the year, the county lost 11.2% of its jobs, the steepest decline in Southern California’s coastal region, when Disneyland Resort, its largest employer, closed. Its unemployment rate was 9.9% in August, compared with 12.4% in July.

Inland Empire, composed of the counties of Riverside and San Bernardino, got 15,400 jobs in August for a total of 1.4 million, as stocks grew with a national increase in e-commerce. Compared to a year earlier, the region lost 8.6% of its jobs. Unemployment was 11% in August, compared with 13.4% in July.

Northern California’s strong technology sector has made it possible for many employees to work from home during the pandemic, which has reduced the number of jobs. San Francisco’s unemployment rate was 8.8% in August. San Mateo and Santa Clara counties were at 7.5%.

In a statement on the August labor report, California Workers’ Secretary Julie Su praised new state laws that protect workers and offer small benefits. “Sustained recovery is due to the fact that all Californians are doing what they can to slow the spread of this virus,” she said, “including giving workers a real choice to stay home when needed, isolate and follow public health orders.”

California’s payroll comes from a federal survey of 80,000 California companies. Unemployment comes from a separate survey of 5,100 households.

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