‘Hungry to celebrate being alive’: California reopening fuels job growth
Quick Take
Unemployment in California fell to 7.9% in May, the fourth month state payrolls grew by more than 100,000 jobs. Still, full recovery will be slow.
California has added jobs at a torrid rate since the beginning of the year, but the state’s economy has a long way to go before it recovers its pre-pandemic prosperity.
May was the fourth month that Golden State payrolls grew by more than 100,000 jobs — a faster post-recession rate than in any previous recovery.
But just 51.8% of the 2.7 million jobs lost in March and April 2020 had returned as of last month, state officials reported Friday.
“A full California labor market recovery from this pandemic is still likely several years away,” said Scott Anderson, an economist with Bank of the West in San Francisco. “Even with stepped-up job growth, California has been unable to close the yawning unemployment gap with the nation.”
Golden State joblessness dipped slightly last month, to 7.9% from a revised 8% in April. It was a vast improvement from a 16% peak in April 2020, but considerably below the pre-pandemic rate of 4.3% in February 2020.
Unemployment in Los Angeles County, still suffering from the loss of international tourism and the slow recovery of entertainment industry jobs, was stagnant at 11.1% in May, the same as in April.
Nationwide, unemployment stood at 5.8% in May and the U.S. had recovered 66% of the jobs it lost during the pandemic.
Still, many economists are optimistic that with expanding vaccinations and the lifting of restrictions on California businesses this week, the labor market will accelerate.
“We are emerging from the scourge of COVID-19,” said Lynn Reaser, an economist at Point Loma Nazarene University in San Diego. “With California’s economy fully open as of June 15, job prospects for the rest of the year are very strong.”
Flower Duet, a floral design company in Torrance, rode the pandemic’s roller-coaster economy and is just now poised for a return of its once-thriving events business.
When the pandemic hit, “We had to throw out thousands of dollars worth of flowers,” recalled Casey Schwartz, co-owner of the company with her sister Kit Wertz.
The sisters had been gearing up to decorate about 70 weddings and 60 corporate events in 2020. Almost all were canceled.
But Wertz and Schwartz pivoted. Their in-person flower arranging workshops had previously attracted about 240 people a year. They expanded them online and more than 2,000 people signed up over the past year.
Last month, hotels and other venues had yet to welcome back events. But this week, the sisters were busy arranging flowers for a large wedding. “People are hungry to celebrate being alive,” Schwartz said.
About 48% of the state’s residents are fully vaccinated. After falling in the spring, vaccination rates have risen with expanded neighborhood distribution and Gov. Gavin Newsom’s “Vax for the Win” program offering cash, vacations and events tickets to the newly-inoculated.
The lifting of many COVID-related restrictions on physical distancing and capacity at businesses, and new rules allowing vaccinated workers and customers to go unmasked, is expected to further buoy the economy.
”It feels like a giant step towards returning to normalcy,” said Lee Braun, CEO of Perspire Sauna Studio, an Orange County franchising company. “It allows our guests and team members see each other’s faces to communicate clearer.”
Perspire had shut down for two months in March of 2020, laying off 35 employees at four Orange County locations. “It was a dark time,” Braun said.
But once they reopened, with COVID-19 still spreading, the sauna business boomed. “Health and wellness has been front and center,” he said. “It’s what people are still looking for.”
Last month, Perspire’s California studio revenue was up 64% over its pre-pandemic level and payrolls grew to 52. Since early May, the company has signed a dozen new franchisees across the country.
“I don’t see that slowing,” Braun said.
One indication that California’s recovery is still lagging came as the state this week reported a jump in workers filing for first-time unemployment.
Last week’s 68,600 new claimants represented over 17% of U.S. filings, although the state accounts for 11.7% of the nation’s civilian labor force. That compares with about 44,000 a week in the two months before the pandemic.
As businesses seek to bring back workers, UCLA economists warned in a forecast this month that the recovery will be more uneven than in previous recessions, given how abruptly and drastically it devastated the economy.
Job postings in the state have returned to pre-pandemic levels, according to Opportunity Insights, a Harvard University research group. Still, 1.4 million Californians were counted as unemployed last month.
State unemployment insurance, along with a federal $300 weekly supplement, has enabled many Californians with lingering health concerns and child-care responsibilities to delay rejoining the workforce, said Mike Bernick, a California Workforce Assn. consultant.
With the pandemic waning, Californians who receive unemployment benefits will have to show next month that they are looking for work, a requirement the state waived last year when COVID-19 kept people indoors.
May’s employment data are based on two federal surveys taken in the second week of the month. Payroll job numbers are based on a survey of 80,000 California businesses. The unemployment rate comes from a separate survey of 5,100 households.
This story originally appeared in Los Angeles Times.