California’s job growth tripled the nation’s, even as the Delta variant spread
California’s recovery from the COVID-19 recession strengthened in August as employers added 104,300 jobs. Unemployment remains high, however, at 7.5% statewide — with Santa Cruz County standing at 6.3% in the latest figures.
California added jobs at three times the nation’s rate last month as teachers returned to classrooms, entertainment venues reopened and summer vacationers traveled despite a spike in COVID-19 infections.
Payroll jobs in the state grew by 104,300 in August to a total of 16.63 million, accounting for 44% of U.S. job growth, officials reported. The nation’s employment recovery was unexpectedly slow last month as vaccination rates in many states lagged that in California.
As of this week, two-thirds of California’s population had received at least one virus inoculation. Nonetheless, with COVID-19’s Delta variant continuing to spread and vaccine resistance persisting, economists said the state’s recovery could remain uneven.
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“California’s economy is now coping with larger concerns about the Delta variant than in the second week of August when the jobs data was collected,” said Lynn Reaser, an economist with San Diego’s Point Loma Nazarene University. “The impact of school reopenings on infection rates and a weakening in consumer confidence could weigh on the near-term economic outlook.”
By last month, the Golden State had recovered just 62% of the 2.7 million jobs it lost in March and April 2020, when the pandemic took hold.
Its unemployment rate remained high: 7.5%, a slight dip from July’s 7.6% but down from 12.3% a year earlier. Nationwide, joblessness in August stood at 5.2%.
The unemployment rate in Santa Cruz County fell from 6.6% to 6.3% in the state’s preliminary figures.
In California, “another full-scale economic shutdown is highly unlikely, but future economic growth could slow as long as the new virus remains a serious concern,” said Sung Won Sohn, a Loyola Marymount University economist. “The cloud cover has not gone away.”
Public schools accounted for 46,900 jobs or nearly 45% of California’s net employment growth last month. “That’s likely a one-off gain that won’t be repeated,” said Scott Anderson, an economist with the Bank of the West in San Francisco.
Apart from leisure and hospitality companies, which added 33,100 positions, he said, hiring in other sectors was “quite anemic. Supply-chain bottlenecks, port backlogs and COVID fears are increasingly weighing on the California economic outlook.”
Business travel and tourism, linchpins of California’s economy, dried up beginning in March of last year. But this year, domestic leisure travel picked up, sports venues reopened and jobs began to return.
By midyear, about half of the 30,000 members of Unite Here Local 11, one of Southern California’s largest unions, had returned to work at hotels, stadiums, airport concessions and convention centers.
“We were feeling relatively positive before the Delta surge,” said Kurt Petersen, the union’s co-president. “But Delta has pulled us back, due to a stubborn group of people that refuses to be vaccinated.”
Convention centers remain dark, business groups are canceling reservations, international travel is all but nonexistent, and tourism is not expected to fully bounce back for two years, he said.
“Whole swaths of workers have not worked at all since March of 2020, and two-thirds of our members who have returned to jobs are given fewer hours than before the pandemic.”
Many hotel chains have cut automatic daily room service, so housekeepers are working three days instead of five days, Petersen said. “They can’t survive on that. And the jobs are harder because a room that hasn’t been cleaned in days is often a pigsty.”
The recovery is likely to remain uneven. Professionals and technology workers who can operate from home have kept their jobs, along with workers classified as essential, from grocery clerks to warehouse packers.
Servicon, a Culver City company that cleans hospitals, aerospace factories and office buildings throughout Southern California, has added 400 janitors since the beginning of the pandemic, bringing its total workforce to 2,000.
“The economy has its lurches, but we’re in demand,” said Servicon Chairman Michael Mahdesian. “After years of being told to be invisible, clients now want to see us disinfecting and cleaning. They want to give confidence to their employees that buildings are healthy.”
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Mahdesian worries about the short-term impact of the Delta variant. “It is slowing down the recovery,” he said. “But California is better off than other states in getting people vaccinated. States like Texas and Florida are a mess.”
He applauds President Biden’s push for healthcare workers, government contractors and workers at large companies to be vaccinated. And he expects Congress to pass infrastructure bills that will get billion of dollars flowing to California and other states. “So I’m optimistic for the future,” he said.
The state’s data come from a federal survey of 80,000 California businesses. The unemployment rate comes from a separate survey of 5,100 California households.
This story originally appeared in Los Angeles Times.