L.A. County employers added nearly 28,000 jobs to their payrolls in February in a typical seasonal rebound after January’s plunge, according to state figures released March 22.
Meanwhile, the California Employment Development Department figures showed the county’s unemployment rate was stuck at 5.4% in February, the same as in January, but at a higher level than the 4.9% reading from February of last year.
Returning to the payroll jobs figures, the net gain of nearly 28,000 brought the county’s total tally to 4,549,500. That gain was a sharp reversal from January’s plunge of about 70,000 jobs.
The job gains were spread across a number of industries, led by private education with an increase of 7,200 jobs. That was followed by motion picture/sound recording (up 6,800), health care/social assistance (up 6,300) and accommodation/food service (up 4,200).
These gains were offset by a drop of 3,300 jobs at retail establishments and a decline of 2,100 jobs in transportation/warehousing and utilities.
Several of these industry gains and losses were seasonal, particularly the gain in private education. The state Employment Development Department also releases a seasonally-adjusted payroll jobs figure. When compared to January, the seasonally-adjusted total for February showed a drop of 3,600 jobs.
For the 12-month period ending in February, the county gained a net 9,400 jobs for a growth rate of 0.2%. This year-over-year job growth rate is much lower than the 1% to 2% range the county experienced over the last couple of years, and likely signals the end of the pandemic recovery period.
One factor impacting the growth rate was the sharp downward revision in 2023 payroll jobs in the county that was released earlier this month with the January figures. The revision showed the county had 110,000 fewer payroll jobs than previously estimated.
Looking at the performance of industries over the past 12 months, the health care/social assistance sector posted the biggest net gain of 32,600 payroll jobs. That was followed by private education (up 12,500 jobs) and government (up 11,000 jobs).
Not surprisingly given the strikes that rocked the entertainment world last year, the motion picture/sound recording industry showed the biggest year-over-year decline, shedding a net 33,500 payroll jobs. The professional/business services was next with a drop of 16,000 jobs. The manufacturing sector shed nearly 5,000 jobs over the 12 months ending in February, continuing a decades-long decline.
Unemployment rate unchanged
On L.A. County’s 5.4% February unemployment rate, both the number of people employed and the number of people in the labor force went down, with the labor force dropping by 8,000 to just under 5 million. As a result, the unemployment percentage remained the same.
The county’s rate was slightly higher than the 5.3% statewide average for February, but way higher than the 3.9% national average. California now has the highest unemployment rate in the nation.
The unemployment figures come from a survey of households in Los Angeles County, while the payroll jobs figures come from a sampling of employer payroll data submitted to the state.
The state agency also breaks down the unemployment figures by city. The county’s two largest cities, Los Angeles and Long Beach, reported December unemployment rates of 5.2% and 5.0% respectively in February.
Among cities with more than 10,000 residents in their labor force, Lomita had the lowest unemployment rate at 2.1%, while Lancaster had the highest rate at 7.4%.
Among the cities in the San Fernando, Conejo, Santa Clarita and Antelope valleys, after Lancaster, the city with the highest unemployment rate in February was Calabasas at 7.1% followed by Palmdale at 6.9%. Burbank’s rate was 6.3%.
In the middle of the pack were the cities of Los Angeles at 5.2%, and Glendale and Santa Clarita, both at 4.9%.
San Fernando, with its 3.9% February unemployment rate, stood alone at the low end for cities in the quad-valley area with labor forces exceeding 10,000.
Opinion: Minimum Wage Chaos
Alright. Let’s talk about the rising minimum wage and its profound, devastating implications for the cost of living in California.
I recently tried to enroll my child in a summer camp through the Los Angeles Department of Recreation and Parks, and guess what? We were met with fewer spots and a whopping 33% price hike. Why? The department is struggling to find enough counselors who are willing to work for $18 an hour.
Sure, it’s more than the city’s current minimum wage, but here’s the real kicker: In April, the statewide minimum wage for fast-food workers is going to hit $20 an hour. If that wasn’t bad enough, we can bet that these kinds of wage increases won’t be limited to fast-food workers, and L.A. won’t stop at just $20 an hour.
Of course, recent wage increases throughout California haven’t been confined to seasonal temporary jobs like summer camps. Hospitals across the state are also being forced to raise their wages for their lowest-wage employees to an astronomical $25 an hour. Great news for the employees, right? Well, not quite. The reality is that doing so will set off a domino effect of rising costs for patients and, ultimately, a mass worker exodus from Los Angeles and California.
Consider the impending $20 hourly minimum wage for fast-food workers in the Golden State, set to take effect in April. The implications are dire, especially in cities like Los Angeles, where the cost of living is already skyrocketing.
As we witness these wage hikes, everyone – from the business community and government officials to affected employees themselves – must recognize that increased labor costs will inevitably be passed down the supply chain, affecting everything from goods and services to the overall cost of living. And no one is prepared to pay $15 for a Big Mac.
Now, if a worker can pull in $52,000 a year in cities like Turlock, where one-bedroom apartments are being rented out for a little over $1,000 a month, why should anyone stick around in L.A.? Especially when our elected officials are turning the screws on landlords and developers, making prices spiral even more out of control.
So, what’s the bottom line? Expect changes. Big ones. Although unions and social justice warriors might throw a fit, astronomical labor costs will force countless businesses to cut their staff and shift to automation, because doing so will be the difference between surviving and shutting their doors.
This alarming scenario raises important questions about the sustainability of California’s economic model. While the state’s $16 hourly minimum wage might sound like a leap forward for economic justice to some, it falls short when coupled with the increased costs that are the result. The state’s Legislative Analyst’s Office even crunched the numbers for us, and, surprise, surprise, they’re not adding up.
Wage hikes will cause other changes
Also, in case you missed it, a recent report by the Hoover Institution revealed that hundreds of businesses decided to wave goodbye to California between 2018 and 2022. And that doesn’t even include the businesses that just closed their doors. Why? High rent, high taxes and high employee living costs, not to mention enough red tape to strangle plenty of business owners. That doesn’t quite sound like a love letter to hard-working Californians, does it?
As the state grapples with many economic challenges, it is paramount that we balance pursuits for fair wages with economic sustainability; otherwise, our state will be ravaged by increased costs and job losses that disproportionately harm small businesses and underserved communities. So, policymakers need to engage in meaningful dialogue with stakeholders to ensure fair compensation that doesn’t damage California’s prosperity.
Although higher wages are a noble idea, let’s not kid ourselves: There’s no such thing as a free lunch. As the minimum wage climbs, costs do, too, and someone’s going to be picking up the tab. So, before throwing a party when everyday workers start raking in $20 or more an hour, let’s take a step back to make sure that our leaders aren’t marching the state into financial ruin. California’s economic future is on the line, and it’s about time that we put a stop to counterproductive, pie-in-the-sky proposals.
Stuart Waldman is president of the Valley Industry and Commerce Association, a business advocacy organization based in Van Nuys that represents employers in the San Fernando Valley area at the local, state and federal levels of government.