Web Version [link removed] | Update Preferences [link removed] [link removed] Unemployment Data Update: March through October 8, 2020 Unemployment Insurance Claims
With EDD reopening just this week to process new claims, no new unemployment insurance filing data is available for the state. Instead, the numbers being reported by the Department of Labor for California again are shown as an estimate pegged at the last count for the week of September 19. Because of the effect of California on the US numbers—21% of national PUA claims and 28% of initial claims in the regular program—the reported national numbers have to be viewed in this context as well.
Netting out the California estimates from the more relevant not seasonally adjusted numbers, initial claims for the rest of the country edged up 1% in the week of October 3. Initial claims for the PUA program for self-employed dropped by 11%. Combined claims were down 4%. The combined initial claims in the rest of the US have shown only little change, fluctuating between about 940,000 to 1,100,000, since the week of August 6. While substantially improved from the surges at the beginning of the crisis, this continuing high level indicates the economic damage continues.
As of September 30, EDD reported [[link removed]] an initial claims backlog affecting 541,805 workers. At the current rate from the prior 7 days, it would take 47 days to eliminate the backlog entirely. The backlog [[link removed]] in processing continuing claims stood at another 1,021,920 workers. At the current rate, retiring this backlog would take 109 days.
COVID Effects on a Two-Tier Economy
While the California results will not be released until October 16, the most recent employment and jobs numbers at the national level suggest a slowing of the economic recovery as California and other key states maintained extensive economic closures. The national results, however, suggest a strong divide in the extent of recovery, trends that likely are stronger within this state given the jobs structure that evolved over the past decade.
As noted by a number of recent commentaries [[link removed]], the current economic conditions have entered a new phase. While the initial months of the crisis were dominated by temporary layoffs, the permanent component (permanent layoffs and persons completing temporary jobs) has begun to comprise a larger share of the unemployed. As employers have reached their current capacity to recall workers on temporary layoff, many instead have been forced to shift to permanent layoffs as the recovery horizon in some states has become more distant and as uncertainty over when they will be allowed to fully reopen remains. In California, this uncertainty has been compounded by continued shifts in the reopening policy structure, changes in rules even after new frameworks have been announced, and continuing release of new regulations by the agencies that will affect the number of workers employers can afford to bring back.
As indicated in the chart below, although not yet at the same peak as in the Great Recession, the rise in the number of permanent layoffs has been much more rapid than in the prior two economic contractions (shaded areas). While various stimulus payments previously helped sustain the level of overall consumer spending, these were temporary measures that cannot substitute or even maintain sustained wage and income recovery. Further adding to the challenge of returning back to the norm is that the norm itself is changing as the current situation has accelerated longer term structural changes that were already underway, including a shift to telecommuting that gives more flexibility to where jobs can recover, a shift to online retail, changing sales channels for key California industries such as movies, and increasing use of self-service and delivery that have their strongest effect on the number of lower skill/lower wage jobs. More fundamental steps to accelerate jobs recovery will be more critical to avoiding a repeat of the long, shallow recovery from the previous downturn.
The effects of these changes can already be seen in the employment demographics. Using educational attainment as a proxy for wages, employment for those with a college education has essentially already recovered in large part due to wide adoption of telecommuting. Employment losses were far deeper for those with less than a college degree and remain well below recovery levels.
Visit The Center For Jobs » [[link removed]] The California Center for Jobs and the Economy provides an objective and definitive source of information pertaining to job creation and economic trends in California. [[link removed]] Contact 1301 I Street Sacramento, CA 95814 916.553.4093 If you no longer wish to receive these emails, select here to unsubscribe. [link removed]
