The consistent theme was that the state was roaring back from the COVID-19 shutdowns that he unilaterally imposed in 2020. Certainly, the money in the state coffers was real (even if the federal portion of it was borrowed against the country’s future), but the rest of the picture, depending upon where you live is still pretty grim.
President Joe Biden celebrated robust job growth numbers last week showing employers added 943,000 jobs last month and the national unemployment rate fell to 5.4%. The Covid Delta variant could affect those numbers as the hospitality and restaurant sectors, which had grown strongly, could see that trend reversed. That’s already happening in San Francisco where some restaurants have temporarily closed.
What’s important to realize is that the recovery in California, despite Newsom’s rhetoric, is well behind the national trends. New unemployment claims in California last week hit their highest level since the state reopened June 15. There were 65,000 residents who filed new claims, up about 1,000 from the prior week. California’s unemployment rate is 7.7%--only three other states have higher rates. Nationally, total claims dropped by 14,000.
Our state now accounts for 20% of the unemployment claims with only 12% of the workers, according to attorney Michael Bernick, who formerly directed the state’s Employment Development Dept. That department continues to be a disaster with a huge backload of unprocessed claims. Newsom and his team have failed miserably in fixing it.
For unemployed people who have been collecting the $300 a week from the federal program that’s paid in addition to the state benefit, the federal dollars dry up Sept. 6. Whether that will result in many people actively seeking work is an open question. It’s also a question of whether there’s a match between their skills and what employers will require. Those are not high bars in the hospitality industry, but there are other places where there will be no match.
A report by the UCLA California Policy Lab said that almost two-thirds of the recipients of the federal money had completed high school or less. About 35% of the recipients were Hispanic; 31.8% white, 15.3% Asian and 8.8% Black. Those are tough numbers, although, in the pre-Covid economy, wages for low skilled workers were growing robustly because of full employment.
Barring some change in the law, unlikely at this point, the situation will get more challenging for unemployed people.