California needs its biggest job market to catch up to the rest of the state as it thaws from a coronavirus-chilled economy.
Los Angeles County has been a huge drag on the state’s overall recovery that has, by several measures, been well behind the national pace.
Consider: L.A.’s unemployment rate was 11% in April compared with 4.7% in February 2020, just before the pandemic hammered life and business. That’s a stomach-churning 6.3 percentage-point increase — even after 2021’s economic uptick.
Now, look at the rest of California. My trusty spreadsheet calculates unemployment in 57 other counties at 7% in April vs. 4.2% just before coronavirus hit. That’s just a 2.8 point jump.
In the 12-county Bay Area region, unemployment was 6% in April vs. 3.1% 14 months ago.
Now, look at the rest of California. My trusty spreadsheet calculates unemployment in 57 other counties at 7% in April vs. 4.2% just before coronavirus hit. That’s just a 2.8 point jump.
In the 12-county Bay Area region, unemployment was 6% in April vs. 3.1% 14 months a.
California’s “official” June 15 reopening should provide L.A. County — home to 1-in-4 workers statewide — a huge opportunity to return its economy to somewhere near its pre-virus status.
L.A.’s sharp underperformance in the pandemic era largely can be tied to the county’s strict mandates that throttled many businesses and shuttered numerous others. Another factor is L.A.’s heavy reliance on industries that were smacked hard by the pandemic.
Just ponder Hollywood’s plight.
Economist Mark Schniepp says the L.A. region averaged 1,435 days of TV and movie filming per month in 2019. Between April and June of 2020, as coronavirus fears were soaring, there were just 55 shoot days. Conditions haven’t improved much. The industry is still down 60,000 jobs.
It’s a good bet many L.A. businesses will flourish with the elimination of operational shackles — those created by the government and consumer skittishness.
“L.A. will bust out and recover fast,” says Schniepp, director of the California Economic Forecast. “Tech is doing extraordinarily well. Film and TV are coming back strong. New development is still booming. And tourism is ramping up sharply, as is travel of all types.”
Still behind
Let’s ponder how much catch-up L.A. requires, looking at unadjusted state employment data derived from a survey of households.
Remember, we are talking about a big slice of California’s economy. L.A.’s cohort of 4.55 million employed residents in April was larger than all of the workers in 47 of the state’s 58 counties. And it’s more than the 4.15 million employed in those 12 Bay Area counties.
L.A.’s employment was down 424,400 — April vs. February 2020 — a 9% drop in the pandemic era. Yes, that’s not significantly worse than the rest of California where 12.7 million were employed, a 7% drop or 953,000 jobs lost. The Bay Area was down 8% or 381,000 workers.
But look at how many jobless L.A. residents have yet to return to work.
There were 316,400 more unemployed Los Angelenos in April 2021 than February 2020 — a stunning 129% increase even after some recent recovery. Elsewhere in the state, the 957,600 jobless represent an increase of 359,400 jobs lost — a 60% surge. And the Bay Area? Up 84% or 121,000.
L.A.’s small businesses are a problem spot. Revenues are down roughly 30% from pre-pandemic levels, says Stephen Cheung of the Los Angeles County Economic Development Corp.
“The recovery of small businesses is essential to the recovery of our regional economy, as over 93% of Los Angeles businesses are small businesses with less than 20 employees,” says the chief operating officer of a group that offers free consulting for struggling business owners. “The reopening could help many small businesses increase the customer base of people with pent-up demand for goods and services over the past year.”
No fun
L.A.’s job woes are in many ways magnified issues found in other coastal communities: Hospitality and tourism businesses were crushed as folks stayed home and mandates made large gatherings difficult, if not banned.
Look at the hardest-hit L.A. job niches, from state data derived from a survey of employers …
Hotels: 30,500 jobs in April — 59% of its pre-pandemic employment.
Arts, entertainment and recreation: 68,600 jobs — 70% of pre-pandemic level.
Restaurants: 304,700 jobs — 77% of what it was before coronavirus.
Other important employers are still in recovery mode, too, just not as far behind …
Manufacturing: 303,300 jobs — 90% of pre-pandemic employment.
Business services: 594,900 jobs — 92% of pre-pandemic level.
Retailing: 381,100 jobs last month — 92% of what it was before coronavirus.
Real estate, construction and finance: 208,700 jobs — 93% of those good ol’ days.
And two L.A. industries — fairly essential to pandemic life — are remarkably solid …
Healthcare and personal services: 709,100 jobs — 98% of pre-pandemic employment.
Transportation/warehouses: 201,200 jobs — up 800 in the pandemic era. That’s “up” as in “fully recovered.”
All that online shopping and meal deliveries have made “logistics” the hot job — even in Los Angeles.
Jonathan Lansner is the business columnist for the Southern California News Group. He can be reached at jlansner@scng.com
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