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California Unemployment Claims Keep Excessive Regardless of Fruitful Job Market – CBS San Francisco

SACRAMENTO (CBS SF / AP) – While California employers continue to create new jobs at a record pace, state jobless claims remain stubbornly high, a sign that the highly contagious Delta variant could give people a break when returning to work .

California has created an average of more than 111,000 new jobs per month since February, restoring about 58% of the 2.7 million jobs lost in March and April 2020 after Governor Gavin Newsom issued the first statewide stay-at-home order due to the coronavirus. This includes 114,400 new jobs in July, according to a report by the Office for Employment Development published on Friday.

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But the number of residents applying for unemployment benefits has increased for four consecutive weeks. While California workers make up 11.7% of the country’s labor force, the state accounted for 21.4% of all unemployment benefits last week. More than 3 million people in the state are still on some form of unemployment benefit.

“It hasn’t gone down much in a few months, even though we created these jobs,” said Michael Bernick, attorney with Duane Morris law firm and former director of the California Department of Employment Development. “This is a real problem, and it suggests that large numbers of Californians are still unemployed and inactive.”

Other experts say the labor market needs to be understood in light of the pandemic, which is constantly changing as more people get vaccines and new varieties emerge that bring new challenges.

“People act differently because of new information, and that will affect the job market,” said Sylvia Allegretto, employment economist and co-chair of the Center on Wage and Employment Dynamics at the University of California-Berkeley.

California’s unemployment rate remained at 7.6% in July, the second highest in the country, level with New Mexico and New York. The rate is unlikely to have changed, however, as an additional 56,600 people joined the workforce in July, a good sign that more people are looking for work.

Allegretto said the rate of people quitting their jobs is higher, something you don’t usually see in a recession.

“Because so many jobs go online at the same time, a lot of people quit their jobs and say, ‘Hey, I can find a better offer,'” said Allegretto. “I’m not surprised by any of this, and I think nothing is too worrisome right now when you relate it to what’s happening.”

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Up to 2 million people could lose their unemployment benefits next month if the extended federal benefits expire. President Joe Biden said Thursday some states could use federal coronavirus aid money to extend the benefits themselves.

Newsom, the Democratic governor who faces a dismissal next month caused in part by anger over its pandemic policies, said California created more jobs than any other state in July. Newsom lifted almost all restrictions on businesses in July when cases were low when more people were being vaccinated.

But since then, the number of new cases caused by the Delta variant, a more contagious and dangerous version of the virus, has increased tenfold in California. Newsom ordered the vaccination of 2.2 million health care workers, saying that all teachers and government employees will either be given the vaccine or have to undergo weekly tests. He also said that people will need to show either proof of vaccination or a negative coronavirus test in order to attend an indoor event with 1,000 or more people from Sept. 20.

“We will continue to lead the way with science and data, prioritize vaccinations and support workers and small businesses hardest hit by this pandemic to create the conditions for a robust economic recovery,” Newsom said.

Nine of California’s eleven industries created new jobs in July, with 49% of the new jobs coming from hotels and restaurants. Another 31% came from education and health services, mostly schools that opened summer courses to help students catch up with a year at home.

Manufacturing posted the largest loss, with 4,500 jobs lost due to a sharp drop in transportation equipment manufacturing, according to a press release from the Department of Employment Development.

Sung Won Sohn, a professor of finance and economics at Loyola Marymount University, said the July job report showed that the job market was “booming.”

“But since then, the delta (variant) has become a big issue, and that could be a major headwind for the California economy,” he said. “I think some of the people are reluctant to go back to work as long as the virus comes back to life.”

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