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California’s unemployment rose 15.5% in April – the largest monthly unemployment recorded

Every major industry sector in California lost its unemployment rate in April as the state’s unemployment rate reached 15.5%, officials said Friday.

The first deep dive into how the pandemic damaged the state’s economic shutdown revealed that employers showed 2.3 million wage jobs in April, the largest single-month unemployment recorded here.

Despite historical figures, the rate is certainly a drawback, given the technicalities of how it is calculated and the fact that it is a month old, based on surveys conducted during the week of April 12.

“The labor market today is much, much worse than it was a month ago,” said Scott Anderson, chief economist at Bank of the West. Since the week of the April survey, California has recorded 1.4 million additional unemployment claims. “The destruction of the labor market is obvious.”

Govin Newsom said last week that 25% of California workers will be left unemployed, which is in line with the Great Depression levels.

“The unemployment rate is staggering,” said Irena Asmundson, chief economist for the state Department of Finance, predicting an average 24.5% unemployment rate in California for the second quarter, with the rate to stay above 20% for the rest of the year. “But in fact it can be a tiny bit of the true depth of how many people have lost their jobs.”

A report from the state’s Department of Employment Development, the first full month since in-place protection orders took place in mid-March, showed how widespread the disease was spreading in significant falls each year. major industry sectors. The state figure is periodically adjusted; county and metro data is not.

“We’ve never seen anything like this in our lives,” Asmundson said. “It’s just awful.”

Recreation and hospitality took the biggest blow, losing 866,200 jobs compared to last month, as restaurants, food services and drinking places continued to drop workers. Trade, transportation and utilities lost 388,700 jobs, with retail and transportation subsectors taking big hits.

“These are the common suspects; heavy service-based services,” Anderson said. The growth in construction, labor and government jobs has not been reflected in the numbers, he said.

But the disease is beginning to hit other sectors as well.

Education and health services lost 280,400 jobs. Professional and business services lost 242,8000 jobs; other services dropped 142,500 jobs. Construction lost 132,100 jobs, while manufacturing dropped to 118,700 jobs. The government lost 101,000 jobs; 40,500 lost information; lost 31,300 financial activities. The only sector where the losses were muted was the small mining and logging segment, down to 500 jobs.

In the Bay Area, there are some bright spots. San Francisco and San Mateo counties, which report together, have acquired 5,200 jobs in information and 1,800 in financial activities. The counties of San Jose and San Benito, another pair, acquired 3,100 information jobs and 400 in financial activities. While technology has not broken down as a sector, many high-wage tech jobs fall into the information category, Asmundson said.

Salesforce, San Francisco’s largest private employer, has said it is still renting, and CEO Marc Benioff has called on his peers to make a no-fight pledge. But other large San Francisco employers such as Uber, Lyft and Airbnb, which are facing travel demand, have cut thousands of employees. The impact of cuts on workers is likely to be reflected in future state reports, as not all cuts are immediate.

Overall, the future looks promising even as the state allows businesses to reopen, experts said.

Unemployment: behind the numbers

Unemployment rates and industry losses are gaining unemployment for many reasons. These are a snapshot of the time since the week of April 12. Since then, millions more people have become unemployed.

The 5,100 households surveyed for unemployment numbers will be asked if they are looking for a job. Those who say no do not count as part of the California workforce – the denominator for the unemployment rate.

But many people are not currently looking for work, because they have been caring for children since schools closed, in vulnerable populations who need to stay home, or other pandemic-related causes. At the same time, the state has dropped a requirement for recipients of unemployment benefits to become active job hunting. All artificially depressed by the worker’s numbers.

The result: California’s official workforce numbers dropped 599,800 in the month to 18.7 million. It dropped 251,800 in March compared to February. In other words, nearly 850,000 people do not count as part of the labor force.

Because 5,100 is a small sample size, analysts are using job-filing filings and other data to make monthly estimates more statistically stable, EDD said.

Industry breakdowns, based on surveys of 80,000 California businesses, exclude self-employed, freelance and workers.

But a large number of them are out of work. New Pandemic Un Employment Assistance grants for this group. California has received 686,798 claims for PUA since its inception on April 28.

– Carolyn said

Many industries do not return because they require personal contacts, think restaurants, drinking establishments, fitness clubs, salons, hobbies. As industries like government and education begin to take a hit, middle-class workers will be thrown into jobs.

This means consumers will avoid spending, which will create a downward spiral effect.

“There will be repeated demand problems and we will have a major setback as we bring people back to work,” said Jesse Rothstein, director of the Institute for Research on Labor and Employment at UC Berkeley.

“People are really worried about their income, watching every penny, scaling back. Even businesses that can be reopened will find it difficult to find customers, so they will back themselves up and then their workers will reduce their consumption. That’s how you end up in a traditional recession driven by demand. “

Mary Benedetto, 69, who was ousted April 8 from her job as a swing-shift janitor at the United Club at SFO, is among those now tight and afraid she won’t find a job.

“It’s very sad,” he said. “I was searching through the internet to see if I could find jobs there, but nothing really worked for me.”

So far, an extra $ 600 a week in pandemic unemployment benefits means he can be met. But once it was completed, he didn’t know how he would pay the $ 1,300 monthly rent in his tiny apartment in Chinatown, or buy clothes, shoes and other items for his disabled adult child. , who live in a house group.

“I’m trying to save as much as possible because I don’t know how long it will last,” he said. “If I can’t find a job, I have to rely on this money to make it.”

Health insurance is also an issue. His union, SEIU-United Service Workers West, covered health care at the end of July through a trust fund.

At first, he and his 40 lay-off co-workers thought they might be out of range.

“We panicked a lot – what if we couldn’t find health care?” he says.

Carolyn Said is a staff writer for the San Francisco Chronicle. Email: csaid@sfchronicle.com Twitter: @csaid

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