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Tuesday, Nov 28, 2023

L.A. County’s Record High Unemployment

It’s no surprise that L.A.’s economy has been walloped by coronavirus-driven business shutdowns, but the extent of the damage only became apparent with the release of data for April. The state Employment Development Department reported on May 22 that L.A. County’s April unemployment rate reached a modern record of 19.6 percent, far exceeding the statewide average of 15.5 percent and the national average of 14.7 percent, both record highs. It was the highest unemployment rate the county has experienced since record keeping began in the mid-1970s; the previous record was 12.6 percent in October 2010. The EDD data also showed that the county lost a record 691,000 payroll jobs in just one month between March and April, dropping the total to 3.87 million payroll jobs — the lowest level since December 1996. By comparison, the county recorded an all-time high of 4.63 million payroll jobs and a near-record low unemployment rate of 4.3 percent in February. But in March and April, roughly 1.17 million Angelenos filed unemployment claims, more than 12 times the total of the previous two months. All this underscores that L.A. County has a steeper hill to climb than most regions as businesses begin to reopen. “We may not see L.A. County employment numbers like those we saw in February until 2023 or even later,” said William Yu, economist with the UCLA Anderson Forecast. “It could take our economy that long — three years — to rebound and reach full employment again.” Yu and other local economists cited several factors for why the county’s economy has been hit so much harder than most regions of the state and nation. Chief among them are high concentrations of workers in the sectors most affected by the shutdowns, including leisure/hospitality, retail storefronts and accommodation/food services, which includes restaurants. Sung Won Sohn, professor of finance and economics at Loyola Marymount University, pointed especially to the leisure/hospitality sector, which was one of the first to shut down and lay off tens of thousands of workers. “L.A. County has a disproportionate share of leisure/hospitality workers,” he said. “In L.A, County, it is 8.3 percent versus 7.2 percent for the state.” The county’s leisure/hospitality sector shed 195,000 jobs last month, leaving the sector with 323,000 jobs, its lowest level in 22 years. Retail establishments, most of which were ordered closed during the Covid-19 lockdown, shed 88,000 jobs in April. The professional/business services sector cut 86,000 jobs while health care/social assistance lost 77,000 jobs. And manufacturing employment fell by 51,000 jobs to 277,000, the lowest level since record keeping began in 1976.

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