Jobs in California are coming back after coronavirus lockdown. But not for everyone
People in California are slowly returning to work in health care, manufacturing, food services and retail trade jobs, but lower-wage workers are often at risk of earning less than they did while receiving unemployment benefits.
And while jobless benefit claims are gradually declining among lower-wage workers, more highly educated people in professions such as education and health care services are making up a larger share of unemployment claims.
These trends were found in a study released Thursday by the California Policy Lab at UCLA.
Nationally, there have been signs the economic downturn is easing slightly. The May unemployment rate was down somewhat, and Wednesday, the Federal Reserve reported “financial conditions have improved,” though it also noted the coronavirus pandemic “will weigh heavily on economic activity, employment, and inflation in the near term, and poses considerable risks to the economic outlook over the medium term.”
California businesses have gradually been reopening in recent weeks as Gov. Gavin Newsom has eased the state’s restrictions.
Currently, California residents out of work can receive a maximum of $450 weekly plus a special $600 weekly federal payment. The $600 federal add-on ends July 25, and the White House and congressional Republicans have shown no interest in continuing it.
California will pay reduced benefits to workers whose hours have been cut. But once those workers earn over a certain amount, they can’t get benefits for that week.
Overall, in mid-May, 13% of California unemployment insurance claimants did not get a first benefit payment because they were earning too much money. That was up from 5% at the lowest point of the pandemic-triggered economic crisis that began in mid-March.
The California job study found that people employed in health care and social assistance had the highest rate of benefit denial recently, reaching over 20% in between May 10 and 23, which means people sought benefits but generally earned too much to qualify.
Next were claimants from manufacturing were around 17%.
Another sign of gradual improvement: The percentage of newly employed people getting partial benefits — which means they worked at least some hours — was up to 10 to 13% in mid-May. The percentage had sunk to 5% at the end of April.
“As the economy gradually begins to re-open, many firms, still facing decreased business but now seeing a light at the end of the tunnel, seem less willing to fully cut ties with employees, opting to decrease hours and keep employees on staff, rather than lay off employees,” said Till von Wachter, the policy lab’s faculty director.
But there were still plenty of signs the economy remains mired in its worst downturn since the Great Depression. Among them:
▪ White collar workers. “We see that the education distribution of initial unemployment insurance claims has shifted substantially throughout the crisis,” the study found.
When the economy began to nosedive, claims by workers with at most a high school diploma were up sharply. But the lab found, “the share of claims by workers with some college or with a college degree or more has been rising and has now returned to pre-crisis levels.”
The share of claims from health care and social assistance workers has been steadily rising for seven straight weeks. Among higher-educated claimants, the share of claims from has been going up over the past five weeks. So have claims from people working in professional, technical and scientific services.
▪ Cautious expectations. Over the last two weeks in May, different demographic groups had somewhat different views of whether they could return to their jobs. Whites, Asians and Hispanics were about 10 percentage points more likely to say they’d be back compared to black workers.
Expectations also varied widely by industry. While 7.5% who worked in finance and insurance anticipated being called back, 56.4% of those in construction and 80.4% in agriculture, forestry, fishing and hunting were confident they’d be back at work.
▪ Black, young, women and Asian-American workers. The coronavirus pandemic “continues to have a disproportionate impact on women, younger workers, lower educated workers, Asian workers and black workers, ” the study found.
Women make up 45% of the state labor force, but file half of all claims. More than 28% of all women in the labor force have sought unemployment insurance since mid-March, and one in four black and Asian-American workers have filed claims.
This story was originally published June 11, 2020 at 6:59 AM with the headline "Jobs in California are coming back after coronavirus lockdown. But not for everyone."
.jpg)