Newsom Glosses Over California’s Sluggish Recovery

As he fended off a campaign to recall him this year, Gov. Gavin Newsom adopted the slogan “California Comeback” to describe what he said was a very robust recovery from the severe recession triggered by COVID-19 shutdowns.

Ever since, as the federal government released its monthly reports on employment and unemployment, Newsom – or, more likely, his staff – would cherry-pick the data to buttress his claim of a massive surge of economic activity.

He did it again last week as job numbers for September were released, saying, “Our economic recovery continues to make promising progress, with 812,000 new jobs this year and regaining over 63% of those jobs we lost to the pandemic. As we continue averaging record job creation, our work is more important than ever to get more Californians back on the job and support those hardest hit by the pandemic.”

California Unemployment Tied for Highest in Nation

What he didn’t say was that California is still more than a million jobs short of regaining the two-plus million jobs that were erased during the recession and that our unemployment rate of 7.5% is tied with Nevada’s for the highest in the nation. It’s 50% higher than the national rate of 4.8% and nearly four times as high as the 2% rate in Nebraska, the nation’s lowest. Arch-rival Texas had a 5.6% rate in September.

Data from the state Employment Development Department show the dramatic change in the job picture since March, 2020, just before the pandemic changed everything.

In that month, the state counted 19.5 million Californians in the labor force with 18.8 million of them working and unemployment at a record-low 3.9%.

In September, the state’s labor force was just 19 million, only 17.6 million were employed and the jobless rate was 7.5%.

1.2 Fewer Californians Working Than Before Pandemic

The state’s overall population is virtually unchanged, but a half-million fewer Californians count themselves as workers and 1.2 million fewer are working. Morever, California now accounts for a whopping 31% of the nation’s new unemployment claims, with more than 80,000 residents filing claims for the week ending Oct. 16, the federal data report revealed.

Simply put, the nation as a whole has snapped back from the COVID-19 recession and other states are seeing record low unemployment rates, but recovery has been, to put it mildly, sluggish in California.

Michael Bernick, a former director of the state Employment Development Department and an attorney at Duane Morris, told CalMatters’ Emily Hoeven: “The explanations previously given for California lagging behind the national economy are no longer convincing. California’s COVID rates are below other states, schools have reopened and child care is coming back. The small business economy in California remains decimated, limiting job openings. However, employers who do have job openings … report few applicants.”

We may be seeing not just a slow recovery from recession but a fundamental and worrisome economic dilemma of low labor force participation, high unemployment and jobs going unfilled for a lack of workers.

Newsom Paints Misleading Picture

If so, one would think that the governor would be defining it as a crisis that needs to be addressed. Instead, Newsom continues to paint the very misleading picture of a vigorous recovery.

One might understand his pollyannaish posture during the recall campaign, but he easily won last month’s election. Continuing to ignore California’s employment dilemma serves neither him nor the state well.

Newsom – or the Legislature if he’s unwilling – should commission a vigorous investigation into why California’s recovery is lagging and what needs to be done to match legions of unemployed or underemployed California with the jobs that are going unfilled.

About the Author

CalMatters is a public interest journalism venture committed to explaining how California’s state Capitol works and why it matters. For more columns by Dan Walters, go to calmatters.org/commentary.