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Wednesday, Feb 28, 2024

Study: L.A. May See 32% Unemployment

Unemployment in the Los Angeles area could hit nearly 32 percent by May, according to new projections from the Los Angeles County Economic Development Corp. If so, that would be unemployment on a scale unimaginable only a few months ago. For context, the highest national unemployment rate in U.S. history was just shy of 25 percent. That was in 1933 during the Great Depression. LAEDC Communications Director Lawren Markle told the Business Journal the predictions were “unprecedented.” “(32 percent unemployment) is a striking number that illustrates how severe our crisis is and how much we’ll need to work together as a region to develop strategies to help our small business and nonprofit communities and our workers through this.” The study published Tuesday by the business nonprofit looks to quantify the employment impact of COVID-19 on Southern California’s workforce. It uses occupational data including workplace density to identify “high-risk industries” and predicts the probability of job losses in different sectors and geographies. Projections for the San Fernando Valley are not separated out but included in the dataset for the Los Angeles-Long Beach-Anaheim region, which the study predicts will lose more than 1.7 million jobs, bringing unemployment to 31.7 percent. The Ventura County communities of Thousand Oaks, Oxnard and Ventura got their own data set – a projected loss of nearly 88,000 jobs and an unemployment rate of 30.1 percent. In the Southern California market overall, LAEDC predicts more than 2.8 million jobs lost and an unemployment rate of 31.4 percent. The occupational groups LAECD projects will lose the most jobs are food service and sales, with estimated employment declines of 694,880 and 582,270 respectively. According to the study, “these are obvious categories of workers due to the closure of all non-essential business and the mandate for food service locations to operate solely on a takeout or delivery basis.” LAEDC’s projections are the latest in a line of astounding unemployment forecasts. Nationally, economists at the St. Louis Federal Reserve Bank projected in late March that job losses could total up to 47 million, with unemployment reaching 32.1 percent. Economists Matthew Fienup and Dan Hamilton at the Center for Economic Research and Forecasting in Westlake Village were a bit more optimistic. The two predicted national unemployment could hit a high of 22.3 percent in the second quarter, with declining numbers thereafter. However, that forecast was made two weeks ago. Los Angeles has already suffered catastrophic job losses. A study published Friday by University of Southern California’s Dornsife Center for Economic and Social Research estimates 1.3 million jobs in Los Angeles County have disappeared since mid-March. That’s not far below the 1.7 million forecasted loss by LAEDC, although that was for a larger geographic area.

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