California employment continues to lag despite state reopening

Even though national unemployment numbers are slowly improving, California continues to fall behind the national recovery and many employers are considering how to do more with less. 

California's regular weekly unemployment claims represent almost 20% of the entire nation's new claims, even though California only contributes to less than 12% of the national workforce. Moreover, Californians seeking Federal Pandemic Relief represent 42% of the entire nation's claims.

There is no reduction in the total number of Californians receiving some form of assistance. 

"The key number to me is that we have somewhere between 3.4 and 3.7 million Californians still receiving some form of unemployment assistance," said labor lawyer and former EDD Director Mike Bernick.

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Despite the fact that the state re-opened six weeks ago and job postings are more than 5% above pre-pandemic levels, unemployment claims remain very high. 

"We didn't have this issue of a slow return or reluctance to return to work. That's what we're seeing now that we haven't seen in the previous recoveries over the past 40 years," said Bernick.

With federal weekly supplements of $300 running out in September, many experts thought that hiring in California would blossom as schools re-opened and childcare became more available. But the past few week’s numbers suggested that September may not bring a major reduction in unemployment claims or increased hiring. 

There are also intensified concerns about the new Delta variant. 

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"It may mean again, slow return work, both employers requiring and also people's willingness to come back," said Bernick.

Some employers are now developing new business strategies. "What I hear from employers is a consideration of a new business model, In other words, as workers are slow to return to work are there new business models being developed in the hotels, restaurants, in construction, and other fields that require fewer workers?" said Bernick.

Employers may test their business strategies in September when the $300 weekly stimulus expires.