L.A. Unemployment Rate Is Nearly Double National Number As Homelessness, Housing Prices Hit Record Highs
“California is going to come roaring back.” That’s one of Governor Gavin Newsom’s favorite mantras as he rolls out his new California Recovery Plan. And there is data to support his optimism.
Above all else, after a yearlong pandemic, California’s Covid-19 test positivity rate is lower than it has ever been, at just .8%. On Tuesday, there were only eight fatalities related to the virus recorded in the state. According to data published by the state, just under half of all Californians are fully vaccinated. Given the nightmare that was early January, those numbers are miraculous.
Newsom has also touted improved economic numbers, including the fact that the state created 101,800 new jobs in April. “That’s nearly 40% of all jobs created in the nation,” he has correctly said. But employment in the state is growing from a deficit.
In March and April of 2020 alone, 2,714,800 California jobs were lost. That’s 14% of the state’s current labor force put out of work in 60 days. At one point last year Newsom estimated that the real unemployment rate was “north of 20%.”
California has clawed its way back to 8.1% unemployment. But that’s behind the rate of 6.1% nationally, a contrast Newsom fails to acknowledge when he’s comparing the state to the U.S. at large. California’s biggest metropolis is even worse off.
According to a report from the state’s Employment Development Department, “The seasonally adjusted unemployment rate in Los Angeles County increased to 11.7 percent in April 2021, from a revised 11.4 percent in March 2021.” That’s hardly “roaring back.”
Newsom is fond of saying that jobs in leisure and hospitality are leading the state’s comeback, and he is right in a sense. That sector, hit hard by the pandemic, posted the largest gain in April 2021. It added 19,900 new jobs, the third consecutive month-over-month increase. That increase accounted for 58% of California’s total nonfarm employment growth. According to that state EDD report, “Growth was spread across both accommodation and food services (up 14,800) and arts, entertainment, and recreation (up 5,100).”
Not all sectors fared as well. Many of the better paying non-college jobs were hit last month. “Trade, transportation, and utilities (down 4,500 jobs) declined the most of any sector,” said the report, “with transportation, warehousing, and utilities leading the loss in the sector (down 2,500).” Those were followed by losses in retail trade (down 1,200), and wholesale trade (down 800).
Californians in those sectors are among the most vulnerable to the confluence of the state’s other most pressing economic issues: Housing costs and homelessness.
According to the L.A. Times on Tuesday, Southern California home prices hit an all-time high last month, a trend driven by low housing supply.
The region’s median home price popped 20.2% year over year to a record $655,000, according to data released Tuesday by real estate firm DQNews. That’s $25,000 more than the previous median price record set in March.
Of course, the price jump puts the prospect of owning a home in Southern California even further out of reach for many residents. That, in turn, creates demand in the rental market and drives some out of that market, as well. That contributes to the homelessness spiral.
While the city’s annual count of those experiencing homelessness was canceled over the past year due to the pandemic, anyone with eyes can see the numbers and the crisis are growing.
A report in January from the Economic Roundtable predicted that pandemic-related unemployment will fuel a brutal cycle of homelessness: “Over the next four years the current Pandemic Recession is projected to cause chronic homelessness to increase 49 percent in the United States, 68 percent in California and 86 percent in Los Angeles County.” The report says that will mean an additional 52,300 homeless people in Los Angeles County by 2023. It’s hard to be optimistic about that.
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