San Diego’s labor market sent mixed signals in June as the economy started to fully reopen only to find businesses desperate to find workers. The region could regain its leadership role relative to California and the nation if more people accept the job opportunities that companies are now offering.
Unemployment
San Diego’s unemployment rate held steady at 6.8% after adjusting for seasonal volatility. Job gains offset a modest rise in the labor force. Unadjusted jobless rate numbers showed a big jump from 6.3% to 7.0%, reflecting the seasonal noise.
The jobless rate seems to have stalled, at least temporarily, at somewhat below 7.0%. Although dramatically below its pandemic 16% high, it remains well above its pre-pandemic low of around 3.0%.
Industry Hiring
Nonfarm employers in San Diego County added 3,700 jobs in June after adjusting for the typical seasonal hiring that occurs in early summer. Without that correction, the region added a much larger 5,700 jobs, with most of the gains in leisure and hospitality. The numbers represent conditions in early June as many businesses prepared for the ending of nearly all Covid-19 restrictions on June 15.
Phil Blair, executive officer of Manpower West, was pleased to see the further hiring gains. “Many San Diegans are ready to go back to work. We could use even more! This trend of people going back to work will grow the San Diego economy and open even more opportunities for others to find jobs,” he said.
June’s report showed that San Diego is still lagging the rest of California and the nation. As of midyear, San Diego’s employment trailed both the State and the U.S. in terms of its recovery. San Diego jobs were at about 92% of their pre-pandemic February 2020 high. In comparison, California’s recovery was at about 93% and the U.S. was about 95.5% complete.
“San Diego’s third position behind California and the nation is a concern,” according to Lynn Reaser of Point Loma Nazarene University. “Given our strengths supported by the military, biotech, tourism, electronics and professional services, we should be doing better. The problem is not on the demand side, as consumers have money they want to spend. It is on the supply side, with companies struggling to find parts and, even more importantly, workers.”
Blair describes the desperate situation he is helping companies work through. “Employers are raising wages, offering hiring incentives, and offering training to applicants with no experience. This could be one of the greatest opportunities in a lifetime for individuals to gain a place in the job market and make steady gains.”
San Diego Workforce Partnership’s senior economist, Daniel Enemark, discussed the opportunities in leisure and hospitality, where employment remains about 40,000 below the pre-pandemic high. “Restaurant and hotel employers across the country have struggled to recruit workers and they’ve faced some tough obstacles, including workers’ lingering COVID concerns and the potential disincentive of enhanced unemployment benefits,” he said. “But job seekers should know that many of these roles pay well (especially with tips). And in addition to advancement opportunities within the sector, many give the scheduling flexibility workers need to pursue education or training for their dream job.” The Workforce Partnership’s business services team can connect job seekers with these roles, and the career centers can help pay for education and training to further advance clients’ careers.
San Diego’s major sectors continue to recover at different rates. As of June, construction and utility jobs have returned to their pre-pandemic highs, but leisure and hospitality employment is only at 79% of that level.
Outlook: Waiting Until Fall
California has recently restored its requirement that people must look for work in order to qualify for unemployment benefits. “Companies face further struggles through the summer, but fall could bring some relief. The opening of schools and day care centers, along with the ending of extra federal jobless benefits, could coax more people back to the workforce. The return of teenage workers to school and immigration restrictions will continue to weigh on the potential labor pool,” according to Reaser.
Blair emphasized the region’s potential. “San Diego’s businesses are now offering San Diegans a wide array of opportunities. This is a window not to be missed.”