Job analysts see positives, but serious concerns

Friday, May 21, 2021

San Diego’s labor market saw some further improvement in April as the region jumped two tiers from the prior month in California’s reopening process. Payroll numbers advanced moderately, but the jobless rate inched slightly higher after adjusting for seasonal trends. In a month when more people sat on the sidelines, companies scrambled to find workers.

Unemployment

San Diego’s unemployment rate edged up to 7.0% in April from the prior month’s 6.8% after adjusting for seasonal volatility. This occurred despite a further shrinkage of the labor force. “This worrisome trend must be reversed for the economy to achieve its full potential,” Lynn Reaser, Chief Economist for Point Loma Nazarene University, emphasized.

Industry Hiring

Nonfarm employers in San Diego County added 5,200 jobs in April after adjusting for the usual hiring that occurs during this time of the year. This was about half the 9,800 advance reported before that allowance. Some of the month’s gain reflected the region’s rapid shift from the most restrictive “red” tier in early March to the second least restrictive “orange” tier in April when the latest numbers were tallied, according to Reaser.

Most businesses added jobs in April, highlighted by the 7,000 (unadjusted) surge in leisure and hospitality hiring. Restaurants and bars alone added 4,500 jobs. Hiring would have been even higher if they could have found the workers, observed Phil Blair, Executive Officer of Manpower West. “Businesses are desperate for employees. They are competing among themselves to fill openings and doing everything they can to pull people off the sidelines.” Employment services companies, like Blair’s firm, Manpower, are now exempt. Payrolls for employment services businesses dropped by 1,300 in April.

Blair noted, “For the San Diego economy to rebound we need people to accept job offers and go back to work. The time for career advancement or career change has never been better. Now is when businesses need workers to open, and the workers will be offered the best pay, shifts, and promotions. Vaccinations are available for walk-ups, and most schools are back in session for at least four days. For the good of your career and the San Diego economy now is the time to accept a job offer.”

San Diego Workforce Partnership’s Senior Economist, Daniel Enemark, observed, “Service-sector employers continue to recruit heavily in their efforts to return to pre-pandemic employment levels, which will require hiring at least 40,000 workers. The Workforce Partnership is collaborating with Cohn Restaurant Group and the San Diego Housing Commission on a pilot program to provide parent-friendly schedules for single parents. We’re also working with the International Rescue Committee to help English language succeed in hospitality roles.” The Workforce Partnership will be hosting recruitment events over Zoom next Wednesday and Thursday—if you’re interested, contact Stephanie Murphy at the Housing Commission.

San Diego’s job market still has a lot of ground to recover. As of April, the region’s employment was still 123,000 or 8.1% short of the pre-pandemic high reached in February 2020. This was similar to the State’s 8.0% shortfall but significantly more than the 5.4% nationwide gap.

Underscoring the uneven pace of recovery across industries, construction and utility jobs are above their pre-pandemic levels, but leisure and hospitality employment is only at 73% of that level. E-commerce has helped offset some of the losses in retail, but hotels and restaurants are still struggling to get back on their feet.

Outlook

“Everyone is now waiting for June 15 when the Governor will release the brakes on most of the economy. If San Diego can find the workers, it will be ready to speed ahead”, said Reaser. “Our workforce will be holding the keys to our recovery.”


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