California is facing the challenge of high unemployment and is witnessing a very slow economic recovery. The Coronavirus is not fading away and the new variant has posed another challenge for the pandemic hit economy.
Slow Economic Recovery
California is in the process of recovering from the pandemic recession. Economists believe that this the most damaging recession since the Great Depression. The state is struggling to regain the jobs which it lost during the early months of pandemic. However, California had managed to regain only about the two-third of the 2.7 million lost jobs. The state is lagging behind in economic recovery compared to other states. The economists do not see a full recovery until the end of 2023.
Great Resignation Phenomena
One of the biggest challenges is to bring the workers back to work. Almost all the states in United States are facing this problem which is also termed as “Great Resignation”. Workers are not willing to come back to work. Many low wage industries like hospitality and retail are badly affected by this. Their workers are leaving for better jobs. Another reason is that the skills of the people do not match with the job openings. Therefore, it is difficult to find resources to fill up the jobs. Hospitality industry has 17% fewer jobs than before the pandemic in March 2020. In contrast, large businesses have managed to sustain better.
“Much of the ups and downs are coming from Southern California where tourism and services are disproportionately high,” said Sung Won Sohn, president of SS Economics, an economic consulting firm in Los Angeles.
Decreasing Trend of Unemployment Claims
California workers filed 47,900 jobless claims during the week which ended 27th November 2021. This has reduced by 4,600 jobless claims compared to last week. The unemployment claims have dropped to the lowest level since advent of COVID-19 in spring last year. Unemployment claims are dropping for last 4-5 weeks and economists are considering it a positive sign.
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