Initial claims dropped in California to a somewhat greater extent than in the rest of the US during the week of March 20. The number of California initial claims is the fourth-lowest since the week of March 21, 2020—a comparison that includes lower numbers due to ongoing administrative issues at EDD. The results for the US mark the lowest. Both levels, however, remain well above the pre-pandemic period.

In California, initial claims processed in the regular program were down 12.3% compared to the prior week, while PUA claims were down more sharply at 24.6%. In the national totals, regular claims dropped 13.3%, while PUA claims were down by 15.0% in large part due to the change in the Ohio numbers. Combined, total claims processed were off 14.8% in California and 13.7% in the US numbers.

Initial claims remain somewhat relatively higher in California but indicate a sustained downward trend. Numbers in the other states are dropping as well but at a more gradual trend.

In the most recent results for January, California had the second-highest unemployment rate in the country, behind only Hawaii which is even more dependent on tourism-related employment. Portions of the state have fared even worse, with California containing just over half of the 25 MSAs with the worst unemployment rates in the US. 

These numbers only cover the officially unemployed and not workers who have left the labor force during the pandemic period including workers who have given up on trying to find a job, workers who are fearful of contracting the disease if they get a job, and parents who have had to quit their jobs to take care of their children while the California public schools have remained closed.

The most recent tier allocations for the week of March 23 from the Department of Public Health show continuing improvement in the ability of many counties to begin reopening jobs and begin reducing unemployment. Only 6% of the unemployed from January are in counties under the strongest state restrictions, but 86% still remain in the second most restrictive Tier 2.

While these shifts presumably will continue opening up jobs, the more detailed analysis for the US numbers indicates that workers returning to jobs in February were more likely to have been on temporary layoff rather than those on permanent layoff. Incorporating the dip in the average number of hours of work, most employment gains nationally were from part-time work rather than increases in full-time status. The slow pace of reopenings, consequently, appears to be exacerbating the trends towards long-term unemployment for those out of work or out of the labor force similar to what happened during the previous recovery from the Great Recession.

While the Tier shifts will ease the economic harm experienced to date, the manner in which they are being done at this point are unlikely to counter the consequences in terms of long term wage growth potential and the effect on long term income inequality now being faced by those low-income workers hit hardest by the state’s strategies. Steps to accelerate job reopening would help to counter this trend, but the emphasis in state policies to date has been a focus on subsidies and income assistance to mitigate the economic harm from job loss rather than measures to accelerate workers’ return to jobs.

The chart above is based on the 1.7 million workers officially classified as unemployed in January. Adding in those leaving the labor force raises the total closer to 2.6 million. Given the timing of the surveys used to estimate the monthly jobs numbers, the effects of the current round of the Tier shifts will not be shown until the April results to be released in May.

In the most recent data from the Centers for Disease Control, California finally notched above the US average in the share of vaccine doses being administered, but still ranked behind 28 other states, the federal entities, and 2 territories. Total vaccine supplies were up 2.9 million for the week (12.6% of the national gain), while the number of shots administered were up 2.5 million (13.8% of the national total). As of midday March 25, a total of 16.1 million shots [note: last week’s report cited the number of doses here instead of the 13.6 million vaccinations] have been administered in the state covering 10.8 million people, or 27.2% of the population.

Overall, the backlogs in the week of March 17 were little changed. The backlog in initial claims was up 0.9%. Continuing claims were down 19.3%, but their relative numbers had little effect on the combined total which was down only 1.9%.

In the most recent data from EDD, California paid out a total of $130 billion in benefits under all the UI programs over the year beginning through the week of March 7, 2020 and continuing through the week of March 13, 2021. Through the end of April, these numbers will not include payments for all unemployed workers eligible for the new benefit extensions under recently passed federal legislation, as EDD recently announced up to 800,000 workers will likely face delays in processing. The most current estimate is that up to $31 billion of unemployment benefits was paid out to fraudulent claims, consisting of $11 billion in known fraud and up to $20 billion in suspected fraud.

The most recent data from the US Department of Labor indicates California’s outstanding loans from the Federal Unemployment Account were $21.1 billion, or 40% of the total amount owed by 20 states.