Inside California’s declining unemployment rate

Good morning, California. It’s Tuesday, September 22.

Leisure, hospitality hit hard

As California settles into its sixth month of the pandemic, unemployment levels appear to be dropping — a spot of bright news for residents and the state’s embattled unemployment department alike — though the numbers belie a more complex and uncertain reality.

The Golden State’s unemployment rate fell from 13.5% in July to 11.4% in August, according to figures released Friday by the Employment Development Department. But as CalMatters’ Dan Walters points out, much of the gain was governmental or seasonal. The state government hired 66,100 new employees, but many are temporary federal workers charged with conducting the 2020 census. Meanwhile, California’s leisure and hospitality industry lost 14,600 workers, the service industry lost 5,700 workers and the agricultural industry lost 3,400 workers.

• Fernando Lozano, a Pomona College economist: “The slight decrease is not bad news. But unfortunately, sectors with the most vulnerable workers in services, leisure and hospitality are still seeing a rise in unemployment.”

Experts warn that a “tsunami” of hotel closures will likely crash over California, which has the nation’s fifth-highest unemployment rate. Other businesses may meet the same fate, given that a majority of counties remain in the state’s most restrictive reopening tier.

• Scott Anderson, an economist at Bank of the West in San Francisco: “We expect job growth to only get harder from here.”

Meanwhile, millions of jobless Californians can’t access their unemployment benefits. Gov. Gavin Newsom acknowledged Monday that California’s backlog of nearly 1.6 million unemployment claims — which is growing by 10,000 daily — is “unacceptable,” but said the EDD’s two-week reset period will help reduce the logjam and get money out faster.

He also said that EDD’s tech system, which is more than 30 years old, should “simply be strewn to the waste bin of history,” but didn’t specify if or when that would happen.

• Newsom: “We inherited an old, dilapidated system not dissimilar to many other states in this country. … And I’m committed over the course of the next two years of my term to really initiate some order of magnitude change in this space.”

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The coronavirus bottom line: As of 9 p.m. Monday night, California had 781,694 confirmed coronavirus cases and 15,018 deaths from the virus, according to a CalMatters tracker.

Also: CalMatters regularly updates this pandemic timeline tracking the state’s daily actions. And we’re tracking the state’s coronavirus hospitalizations by county.

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Other stories you should know

1. California wildfire update

California could see heightened fire risk and unhealthy air quality toward the end of the week amid increased temperatures and gusty winds, state fire officials said Monday. The news comes as more than 19,000 firefighters battle 27 major wildfires that have charred 3.6 million acres, killed 26 and destroyed more than 6,400 structures. Newsom said Monday the state is focusing on six fires in particular: August, North Complex, Creek, Bobcat, El Dorado and Snow. The Bobcat fire in Los Angeles County has been particularly tricky for firefighters, remaining at 15% containment even as it threatened the iconic Mt. Wilson Observatory on Monday for the second time in a week.

The governor also said announcements about ramping up the state’s response to climate change could be forthcoming as early as this week. Earlier this month, he declared a “climate damn emergency” and said the state’s current efforts to address climate change were “inadequate.”

• Newsom on Monday: “We are committed to … changing the way we produce and consume energy, both supply, but primarily demand approach.”

2. California coronavirus update

California’s coronavirus positivity rate fell to an all-time low of 3.1% over the past 14 days and 2.8% over the past seven days in a “very, very encouraging sign” for the state, Newsom said Monday. Meanwhile, hospitalizations and intensive-care admissions have fallen to levels not seen since May, CalMatters’ tracker shows. Nevertheless, the Golden State surpassed 15,000 deaths Sunday — just one of three other states to do so.

Today, some counties will be eligible to move into the state’s least restrictive yellow tier for the first time, allowing them to reopen more businesses. I’ll be keeping an eye on San Diego County, which is currently in the state’s red tier but could move back today into the most restrictive purple tier due to rising case rates, forcing businesses to close for the third time. If the state directs the county to move into the purple tier, a lawsuit could be imminent.

3. California eliminates criminal administrative fees

California on Friday became the first state to repeal administrative fees charged to adults in the criminal justice system when Newsom signed a bill that prevents counties from collecting 23 fees, including for public defenders, booking and arrest, work release programs, home detention and electronic monitoring. Counties will no longer pursue an estimated $16 billion in outstanding debt, though the state will set aside $65 million annually for the next five years to backfill lost revenue. Earlier this year, Los Angeles County became the fourth in the state to stop charging people for the costs of their incarceration, arguing that debt often presented another roadblock for former inmates trying to reenter society.

• Mano Raju, a San Francisco public defender: “The criminal legal system disrupts people’s lives and families in so many ways that adding financial penalties sets people up for failure when we should be setting them up for future success.”

Still on Newsom’s desk: a bill that would forgive debt owed by parents for the cost of their children’s incarceration in the juvenile justice system.

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CalMatters commentary

CalMatters columnist Dan Walters: Prop. 15 is a proxy battle over whether Prop. 13 is still an untouchable icon. It’s showdown time after 42 years of skirmishing.

Abolish the Electoral College: California, with our 55 electoral votes, is largely useless when it comes to picking the president of the United States, argue Jessica Levinson, a Loyola Law School professor, and Michael Genovese, a Loyola Marymount University professor.

Managing water: Here are three lessons to help California respond to water funding challenges amid the recession, write Ellen Hanak of the Public Policy Institute of California and Jelena Jezdimirovic, a UC Davis graduate student.

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Other things worth your time

Will Democrats add seats to the Supreme Court? They’ll need Dianne Feinstein’s support. // Sacramento Bee

California schools launch anti-racism plans, flouting Trump’s threats. // Politico

California’s deadliest spring in 20 years could suggest a COVID undercount. // California Healthline

Californians moved to Oregon for affordable housing. Wildfires left them homeless. // Los Angeles Times

California bill gives hope of employment to formerly incarcerated firefighters, but will it work? // San Diego Union-Tribune

Can California recover from wildfires without leaving the most vulnerable behind? // Mother Jones

Ignoring fire evacuation orders is rampant in California. // San Francisco Chronicle

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See you tomorrow.

Tips, insight or feedback? Email emily@calmatters.org.

Follow me on Twitter: @emily_hoeven

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