Calif. unemployment remains unchanged




The California Labor Market Information Division recently released its March 2019 report, showing no month to month change in the unemployment rate, holding steady at 4.0%.

Ventura County remains ahead of California’s unadjusted rate, at 4.6%, but have fallen just behind the U.S. at 3.9%.

We’re now seeing what may emerge as a troubling trend, with a quarter’s unemployment rate running higher than the prior year.

We have that now—4.1% on the current quarter vs. 4.0% a year ago—for what may be the first time since 2010.

The following are comments on labor force and industry sector changes.

Labor Force: Counterbalancing the satisfaction over a still strong and competitive 4.0% unemployment rate, concerns remain over the weak labor force participation. Labor force participation is a measure of the total human capital participating in the economy, employed and unemployed, contributing to production and earning incomes, or at least seeking to.

What’s concerning is that the current level of 429,000 is actually down from a decade ago, at 432,200 in 2009. For a bit more context, the labor force was considerably higher five years ago, in March 2014, at 436,100. The labor force topped out, early in the recovery from recession, in 2012, with fully 10,000 more workers in the economy, at 439,300.

The long-standing decline in labor force is tied to another concern, that is, the flat or nearly flat growth in GDP over the last four or five years. Even though, in theory, we secure more productivity from each worker through advances in technology and efficiency, it’s difficult for an economy to grow at the same time as its labor force is stagnant or shrinking.

What are the causes for the decline? While not easy to define precisely, the causes include: weakness in job creation and retention, especially for high wage occupations, creating little motivation for marginal workers to get off the sidelines, seek employment; working age individuals and families leaving the region, owing to the high cost of housing and shortage of high wage jobs; an aging population, with fewer young workers available to replace retirees; and a cultural and political climate hostile to immigration, so fewer new workers arriving to replace the retirees and out-migration of workers.

None of these factors are unique to Ventura County, but the high prevalence of each places us at a particularly high risk for continued economic stagnation.

Industry Sector Growth and Decline: On the surface, March looks like a fairly strong month for industry sector employment, up by 3,200 jobs, but a closer looks shows that just about all of it, 2,900 jobs, was in the farm sector. Even with that enormous growth, it’s apparently mostly seasonal, as we’re up only 1,000 jobs in farm, year-over-year.

The remaining net gain of only 300 non-farm jobs in March is comprised of a mix. For good news, construction was up 300 jobs in March, 1,000 year-over-year, for a total of 17,000; on the downside, retail shed another 200 jobs, now down 700 year-over-year; and the only other notable gain was 200 government jobs, an even mix between state and local employment.

Unemployment Rate in the Statewide Context: Ventura improved its ranking among California’s 58 counties, now in 14th place, just ahead of 15th position in February.

The top performing counties remain primarily in the Bay Area, with San Mateo continuing in first at 2.4%, San Francisco in second at 2.6%, Marin third at 2.7% and Santa Clara fourth at 2.9%.

In summary, Ventura County continues to hold a relatively strong position in the region, with a low 4.0% unemployment rate, though concerns remain over the weak labor force participation and productivity.

For current data on labor force and industry sector changes, go to labormarketinfo.edd.ca.gov.

Stenslie is the president/CEO of Economic Development Collaborative Ventura County. For information or questions, call (805) 384-1800, ext. 24, or email bruce. stenslie@edc-vc.com.