It would have been nice if California’s unemployment figures would have dropped given the mass vaccine rollout. But numbers between May and June remained at a static 7.7%, a slight drop from April’s 8% figure. Having said that, 73,500 jobs were created in June but only 24,500 people seem to have gotten them indicating that there are many thousands of open positions.
Governor Gavin Newsom however said that the local economy is “roaring back” given the number of jobs that have been created. But is this actually true? Not according to a recent report conducted by United Ways of California on the cost of living that illustrated just how hard it is for Californians to live with fiscal stability. Indeed, the report found that because housing and childcare costs have increased so much – and this has not been matched by a hike in salaries – a staggering 3.5million households where people are working cannot pay for their most fundamental needs. Thus CEO and President of United Ways of California Peter Manzo, said there is a clear need to broaden eligibility for safety net programs.
What’s perhaps even more concerning is the fact that the report was not just referring to the pandemic but used data from up to five years before it started. And it showed that there is a huge divide between California’s haves and have-nots that is only worsening.
According to a meeting held at the beginning of this month, the economic recovery from COVID-19 is set to be “long and uneven” in the Southern Californian region. This was the conclusion of the annual Southern California Economic Summit held by the Southern California Association of Governments (SCAG).
Still, it’s not all doom and gloom. At the summit, Governor Gavin Newsom said:
“We’re going to be alright. In fact, not only be alright, there’s no state better positioned in the future than this state.”
There is however, work to be done. This involves the importance of home ownership expansion in 2021; investment in people-of-color-owned SMEs; bolstering education, pushing forward the manufacturing industry, etc.
Over in Long Beach, it is hoped that the City Council will approve the proposal for a $5m fund in support of personal care service providers (cosmetic stores, hair salons, tattoo parlors etc.). so far it already has the support of Al Austin, Rex Richardson and Robert Uranga from the Council. The money will come from the next federal stimulus package.
It was a recent article in The New York Times by Tim Arango, Adam Nagourney and Natalie Kitroeff that sung the praises of California’s economic surge. They began their article by describing California as having:
“the highest concentration of billionaires in the country. It exports more computers than any other state. It is the nation’s largest producer of agriculture products by far: More than $6 billion in dairy products alone last year.”
They referred to California as “an economic powerhouse — now the fifth largest economy in the world after surpassing the United Kingdom in total output this year.”
But their concern is of Jerry Brown’s uncontested successor – Gavin Newsom – and how he will “navigate California through challenging fiscal times could be critical to assuring both the state’s continuing economic durability and its outsize contribution to national prosperity.”
Founding Partner of Beacon Economics, Christopher Thornberg believes that California is reflective of the economy as a whole. He said:
“So goes California, so goes the U.S.. It is far and away a dominant source of job growth in the U.S.”
And that’s good because a recent LA Times article noted how employment rates in California are positive too, with an additional 44,80 net jobs and a low of 4.2% in unemployment. There was an increase in wages but that was not “enough to top the increase in consumer prices.”
And as SS Economics President said: “California’s economy continues to sizzle.”