An Updated Look at California’s Job Recovery

California’s labor market continues to gain ground in the current economic expansion. According to the latest data on monthly employment trends, California added nearly 40,000 new jobs in March, bringing the total number of jobs added since the recovery began to 1.8 million. California now has nearly 530,000 more jobs than it did when the Great Recession started in July 2007.

This topline trend is good news for workers who have endured years of weak job growth and high unemployment. What’s more, the pace of job growth is near the heights reached in the economic recovery of the late 1990s, the most recent period of sustained and robust job growth in California. The percent increase in the total number of jobs from March 2013 to March 2014 was 3.2 percent, an annual increase that has been fairly consistent since the start of 2013. The chart below shows percent change in jobs from the prior year for every month going back to 1991. Compared to the more volatile monthly estimate, this year-over-year change provides a better sense of the long-run trend in job growth, and it shows that California’s labor market is now adding jobs at a rate that is similar to that seen in the late 1990s and faster than the US as a whole.

4-21-15 jobs annual change

However, this positive trend isn’t “mission accomplished” for California workers. For one, the health of the labor market varies widely among California’s regions and counties. For example, county unemployment rates for March ranged from 3.4 percent in San Mateo to 20.6 percent in Colusa. In addition, counties across the Central Valley are still enduring recession-like conditions: Merced, Madera, Fresno, Tulare, Kings, and Kern counties all had unemployment rates above 11 percent.

Moreover, wage growth remains quite weak, a sign that the economic recovery is not yet reaching workers in one very important way: through their paychecks. While the pace of job growth in California is nearing that last seen in the late 1990s economic expansion, it has not meant the kind of wage growth that workers across the earnings distribution experienced during that prior period.

So, what’s the takeaway for policymakers? The most important is the need for public policies that help ensure the current economic recovery is more broad-based. This means enacting a range of policies, from expanding employment opportunities for disadvantaged jobseekers — such as those with criminal records — to boosting earnings for low-wage workers through modest increases to the minimum wage. State policy choices can help make our sustained — but uneven — economic recovery into one that leads to increased economic security for workers across the wage distribution.

— Luke Reidenbach