California Braces For Unemployment Surge As 40 Million Residents Must Stay Home
Tami Abdollah is dot.LA's senior technology reporter. She was previously a national security and cybersecurity reporter for The Associated Press in Washington, D.C. She's been a reporter for the AP in Los Angeles, the Los Angeles Times and for L.A.'s NPR affiliate KPCC. Abdollah spent nearly a year in Iraq as a U.S. government contractor. A native Angeleno, she's traveled the world on $5 a day, taught trad climbing safety classes and is an avid mountaineer. Follow her on Twitter.
Rachel Uranga covers the intersection of business, technology and culture. She is a former Mexico-based market correspondent at Reuters and has worked for several Southern California news outlets, including the Los Angeles Business Journal and the Los Angeles Daily News. She has covered everything from IPOs to immigration. Uranga is a graduate of the Columbia School of Journalism and California State University Northridge. A Los Angeles native, she lives with her husband, son and their felines.
California has seen a major surge in unemployment insurance claims and is bracing for a continued spike as a result of the global spread of COVID-19, which has forced a statewide shelter-in-place order for the Golden State's nearly 40 million residents, state officials said.
As of Thursday, California's Unemployment Development Dept. reported "a huge spike in the number of claims coming in from impacted Californians" with the 58,208 claims processed in the week prior, from Sunday March 8 through Saturday March 14, up from 43,385 claims the week prior, according to EDD spokesman Barry C. White. Those numbers dwarf the roughly 41,000 claims that have the recent average over the last few months.
The numbers do not reflect the number of applications received by unemployed workers in any given week, just those who submit claims, so the numbers may not accurately reflect the totality of the numbers of workers who have lost their jobs. The data also doesn't take into account workers who have had their hours reduced but are not qualified for unemployment insurance.
"The EDD is applying a variety of strategies to direct as many staff resources as possible to keep up with the increased claim load," White said.
University of California, Los Angeles economists recently predicted Monday that the U.S. has entered a recession as a result of an end-to-end disruption in global supply chains that have shocked both the supply and demand side of markets. The U.S. recession is expected to last through September, with California's downturn expected to be more severe due to its larger reliance on tourism and trans-Pacific transportation.
California's specific employment is expected to contract by 0.7% in 2020 with the second and third quarters contracting at the annual rate of 2.6%. The unemployment rate is expected to rise to 6.3% by the end of 2020 and is expected to increase into 2021 at an average of 6.6%. By first quarter 2021, California is expected to lose more than 280,000 payroll jobs with more than one-third in leisure, hospitality, transportation and warehousing.
Peter Pham, co-founder of Science Inc. in Santa Monica, said the economic ramifications of the novel coronavirus are going to be "profound."
"Next week, I think you're gonna see massive layoffs like 20,000, 30,000 people at one company," he told dot.LA on Thursday. "You're going to see furloughs of people...You're going to see a reduction in hours for hourly workers that puts them in a really weird position where they can't file for unemployment. But it saves the company on tax issues.
"There will be a lot of corporate manipulation unfortunately around what's going to happen. We're just seeing the beginning of the economic collapse that we're going to see. It's going to be bad," Pham said.
Blind, an anonymous professional network has been leveraging its 3.2 million users — all verified via their work emails — to ask questions about job security, income issues, and working from home, amid the spread of COVID-19.
Blind's users primarily occupy the tech space, with 60,000 of its employees at Amazon, others on the platform work in finance and telecom.
In its newest survey, Blind found that among 3,000 respondents, more than 57% feared being laid off. That fear broke down to nearly 88% of employees at Expedia, nearly 38% at Facebook, more than 46% at Amazon, and more than 45% at Apple.
Meanwhile, nearly 25% of those surveyed have found new ways to supplement their income, including nearly 53% of eBay employees, nearly 20% of Amazon employees, more than 20% of those at Google, and more than 37% of those at Apple.
A good portion of employees — more than 40% — remain relatively optimistic that life will go "back to normal" in six months to a year. Three percent of employees think it will take 1-3 months while nearly 14% believe it will take more than a year.
The survey opened on Thursday and the company plans to keep it open throughout the weekend.
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Today:
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