“California will come back in force.” It’s one of Governor Gavin Newsom’s favorite mantras as he rolls out his new California stimulus package. And there is data to support his optimism.
Above all, after a year-long pandemic, California’s Covid-19 test positivity rate is lower than it has ever been, at just 0.8%. As of Tuesday, only eight virus-related deaths were recorded in the state. According to data released by the state, just under half of all Californians are fully vaccinated. Given the nightmare of early January, these numbers are miraculous.
Newsom also touted improving economic numbers, including the state adding 101,800 new jobs in April. “That’s almost 40% of all jobs created in the country,” he rightly said. But employment in the state is growing from a deficit.
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In March and April 2020 alone, 2,714,800 jobs in California were lost. That’s 14% of the state’s current workforce that is laid off within 60 days. At one point last year, Newsom estimated the actual unemployment rate to be “north of 20%”.
California returned to an unemployment rate of 8.1%. But that’s behind the 6.1% nationwide rate, a contrast Newsom fails to recognize when comparing the state to the United States as a whole. California’s largest metropolis is even worse.
According to a report from the state’s Department of Employment Development, “the seasonally adjusted unemployment rate in Los Angeles County rose to 11.7% in April 2021, from a revised 11.4% in March 2021.” It’s barely “roaring back”.
Newsom likes to say that recreation and hospitality jobs are leading the state’s comeback, and he’s right in a way. This sector, hit hard by the pandemic, posted the largest gain in April 2021. It created 19,900 new jobs, the third consecutive month-over-month increase. This increase accounted for 58% of total growth in non-farm employment in California. According to that state’s EDD report, “growth was spread across both accommodation and food services (up 14,800) and arts, entertainment and recreation (up 5,100) . ”
Not all sectors have fared equally well. Many of the highest-paying non-university jobs were affected in the past month. “Trade, transportation and utilities (down 4,500 jobs) fell the most of any sector,” the report says, “transportation, warehousing and utilities leading the loss of the sector (in decrease of 2,500). Next come losses in retail trade (down 1,200) and wholesale trade (down 800).
Californians in these areas are among the most vulnerable at the confluence of the state’s other most pressing economic issues: the cost of housing and homelessness.
Housing prices in Southern California hit a record high last month, according to the LA Times on Tuesday, a trend driven by weak housing supply.
The median house price in the region jumped 20.2% year-over-year to a record high of $ 655,000, according to data released Tuesday by real estate firm DQNews. That’s $ 25,000 more than the previous median price record set in March.
Of course, the price hike puts the prospect of owning a home in Southern California even more beyond the reach of many residents. This, in turn, creates demand in the rental market and drives some of it as well. This contributes to the spiral of homelessness.
While the city’s annual homeless count has been canceled over the past year due to the pandemic, anyone with eyes can see the numbers and the crisis is growing.
A January report from the Economic Roundtable predicted that pandemic-related unemployment would fuel a brutal cycle of homelessness: “Over the next four years, the current pandemic recession is expected to result in an increase in chronic homelessness by 49 % in the United States, 68% in California and 86% in Los Angeles County. The report says that will mean 52,300 more homeless people in Los Angeles County by 2023. It’s hard to be optimistic about that.
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