Two years of job losses have wiped out all the jobs California gained during the four-year economic expansion earlier this decade. Data released today by the Employment Development Department show that California lost another 66,500 jobs in June, bringing total job losses since July 2007 to 917,400. This number exceeds the total number of jobs the state gained during the boom years between July 2003 and July 2007 (846,600). In fact, national data show this is the only recession since the Great Depression that has eliminated all the job growth from the previous boom – a reflection of the severity of the current recession, as well as the fact that it followed on the heels of one of the weakest expansions on record.
Other data released today show that California’s unemployment rate held steady in June at its record-high level of 11.6 percent, but not because workers stopped losing their jobs. Although the official number of unemployed Californians dropped by 7,000 between May and June, the number of employed also fell – by 40,000. This suggests that fewer individuals were counted as unemployed in June not because they found jobs, but because they gave up their search for work. Official unemployment statistics count individuals as unemployed only if they have looked for work within the prior four weeks. Once individuals go longer than four weeks without looking for work, they “drop out” of the official tally of unemployed, even if they still want a job and are available to work. As we’ve blogged about in the past, thousands of jobless Californians are not officially considered unemployed because they haven’t recently searched for work.
The state’s labor market has been weak for long enough now that it has likely started to affect workers’ earnings. Watch for further CBP analyses next month when we’ll delve into the latest wage data to assess how the downturn is affecting Californians across the earnings distribution.
— Alissa Anderson