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California needs its biggest job market to catch up with the rest of the state as it thaws from a coronavirus-cooled economy.
Los Angeles County has been a huge drag on the state’s overall recovery which, by several measures, has been well below the national pace.
Consider: LA’s unemployment rate was 11% in April from 4.7% in February 2020, just before the pandemic hit life and business. This is a dizzying 6.3 percentage point increase, even after the economic rise of 2021.
Now look at the rest of California. My trusty spreadsheet calculates unemployment in 57 other counties at 7% in April compared to 4.2% just before the coronavirus hit. It’s just a 2.8 point jump.
In the 12-county region of the Bay Area, unemployment was 6% in April from 3.1% 14 months ago.
Now look at the rest of California. My trusty spreadsheet calculates unemployment in 57 other counties at 7% in April compared to 4.2% just before the coronavirus hit. It’s just a 2.8 point jump.
In the Bay Area of 12 counties, unemployment was 6% in April compared to 3.1% 14 months a.
California “official” reopening on June 15is expected to provide LA County, home to 1 in 4 workers statewide, a huge opportunity to bring its economy back to near its pre-virus status.
LA’s strong underperformance in the era of the pandemic can largely be linked to the county’s strict mandates that have strangled many businesses and shut down many others. Another factor is LA’s heavy reliance on industries that have been hit hard by the pandemic.
Just think about the fate of Hollywood.
Economist Mark Schniepp said the LA area averaged 1,435 days of film and television shooting per month in 2019. Between April and June 2020, as coronavirus fears skyrocketed, there was no had only 55 days of filming. Conditions have not improved much. The industry is still down by 60,000 jobs.
Chances are, many LA businesses will thrive with the removal of government-created operational barriers and consumer reluctance.
“LA is going to explode and recover quickly,” said Schniepp, director of economic forecasts for California. “The technology is doing extraordinarily well. Cinema and television are making a comeback. The new development is always in full swing. And tourism is increasing sharply, as is travel of all types. “
Always behind
Consider how much catch-up LA requires, by examining unadjusted state employment data derived from a household survey.
Remember that we are talking about a big part of the California economy. LA’s cohort of 4.55 million employed residents in April was larger than all workers in 47 of the state’s 58 counties. And that’s more than the 4.15 million employees in those 12 Bay Area counties.
Employment in LA fell by 424,400 in April from February 2020, a drop of 9% in the era of the pandemic. Yes, it’s not significantly worse than the rest of California where 12.7 million people were employed, a drop of 7% or953,000 jobs lost. The Bay Area was down 8% or 381,000 workers.
But look at how many unemployed LA residents have yet to return to work.
There were 316,400 more unemployed in Los Angeles in April 2021 than in February 2020, an astonishing 129% increase, even after a recent recovery. Elsewhere in the state, the 957,600 unemployed represent an increase of 359,400 jobs lost, a 60% increase. And the Bay area? Up 84% or 121,000.
Small businesses in LA are a problem. Revenues are down about 30% from pre-pandemic levels, said Stephen Cheung of the Los Angeles County Economic Development Corp.
“The recovery of small businesses is critical to the recovery of our regional economy, as more than 93% of businesses in Los Angeles are small businesses with fewer than 20 employees,” said the chief executive of a group that offers advice free to struggling business owners. . “The reopening could help many small businesses increase their customer base of people with pent-up demand for goods and services over the past year.
Not funny
LA’s professional problems are in many ways magnified by problems in other coastal communities: hospitality and tourism businesses were crushed as people stayed at home and warrants made large gatherings difficult, or even prohibited.
Look at LA’s hardest-hit job niches, from state data derived from an employer survey …
Hotels: 30,500 jobs in April 59% of its pre-pandemic job.
Arts, entertainment and recreation: 68,600 jobs 70% of the pre-pandemic level.
Restaurants: 304,700 jobs 77% of what it was before the coronavirus.
Other large employers are also still in recovery mode, but not so far behind…
Manufacturing: 303,300 jobs 90% of pre-pandemic employment.
Business services: 594,900 jobs 92% of the pre-pandemic level.
Retail business : 381,100 jobs last month, 92% of what it was before the coronavirus.
Real estate, construction and finance: 208,700 jobs 93% of those good old days.
And two industries in LA that are quite essential to pandemic life are remarkably strong …
Health care and personal services: 709,100 jobs 98% of jobs before the pandemic.
Transport / warehouses: 201,200 jobs up from 800 in the era of the pandemic. It is “up” as in “fully recovered”.
All of that online shopping and meal delivery has made “logistics” a scorching job, even in Los Angeles.
Jonathan Lansner is the business columnist for the Southern California News Group. He can be contacted at [email protected]
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