A Recovery-less Recovery

While economists believe that the Great Recession technically ended more than two years ago, many workers and their families still feel as though the economy is in a very deep downturn. The CBP’s new report, On the Edge: California’s Workers Still Face the Toughest Job Market in Decades, illustrates why. Consider these facts. In July, the most recent month for which data are available:

  • Fewer than three out of five working-age Californians (55.4 percent) had jobs. That’s the lowest employment rate on record.
  • Nearly half of the state’s unemployed – close to 1 million people – had been looking for work for more than six months. That’s just shy of the record high number reached only months ago.
  • One-third of the unemployed – more than 700,000 people – had been searching for jobs for at least a year. That’s nearly as many people as there are residents of San Francisco.

What’s behind these grim figures? Millions of Californians are still out of work because the state suffers from a massive jobs deficit. As of July, California had gained back just one out of six (16.6 percent) of the nearly 1.4 million jobs the state lost during the downturn. That means for most people who are out of work, there are literally no jobs to be found. And with the recent slowdown in job growth, there’s no relief in sight for California’s unemployed.

But the weak job market isn’t just tough for the unemployed, it’s tough for those with jobs, too. With competition for jobs high, many workers have little power to negotiate pay increases. California’s typical worker – the individual right at the middle of the earnings distribution – earned less per hour on an inflation-adjusted basis last year than at any point in the past decade. What’s more, because employers have slashed work hours, many workers brought home even smaller weekly paychecks. That means many families’ incomes dropped as well.

There is one bright spot in our report: California added jobs at a faster pace than the US as a whole over the past year – significant in light of the fact that California was hit harder by the downturn than most other states. This trend partly reflects the fact that California’s high-tech industries are making strong gains. While high-tech gains weren’t large enough to make a significant dent in our sky-high unemployment rate, we’ll take any good news we can get.

—Alissa Anderson