San Mateo County labor market stabilizes

In addition to a generally more diverse economy, Jeff Bellisario, executive director of the Bay Area Council Economic Institute, said the county fared well in relation to its neighbors because Peninsula-based firms added offices in San Francisco leading up to the pandemic and during 2021, which ultimately ended up as the lowest-hanging fruit when companies downsized last year.

“San Mateo County is the headquarters of a lot of major companies, so when they’ve downsized or gotten rid of spaces that they had across the region and consolidated a bit within their home office locations, I think that has led to San Mateo outperforming places like San Francisco and the East Bay,” Bellisario said.

But preliminary data shows a similar number of initial unemployment claims last month compared to January 2023, signaling a labor market that is not completely out of the woods from the 2023 downturn, which saw high inflation and record-high interest rates. Mass layoffs last month were lower than the previous January, but spanned across more companies this year, including Pfizer, Cruise and Allakos.

Bellisario said that while some key economic indicators have demonstrated improvements, companies are accepting elevated interest rates and inflation may be the norm longer than anticipated.

“The term recession is no longer being thrown out there. It’s now a question of how quickly are we going to grow in the next year,” he said. “What we’re not really forecasting is a wave of new companies and new startups and new campuses and thousands of more people taking jobs. But what we are seeing is that more companies are feeling confident in their own internal forecast and their external economic forecast where they can begin to plan for longer-term hiring.”

Though cuts to job roles such as project management and human resources have been particularly affected since last year, hiring for technical roles at life science and technology firms has been reinvigorated. That presents different challenges, however, as some of the open roles require a particular background that does not necessarily pair up with the skills of those who have dropped out of the labor force or are unemployed. On top of that, Bellisario said, both those income groups will continue having difficulty with housing costs, as the county is often ranked as the most expensive in the Bay Area, particularly in terms of housing prices.

“There is an education mismatch, but we also have a mismatch in how we bring people into our region in terms of the price points that people are able to access. You need an ultra-high income role to really afford to take the median home here, so the idea of population growth and labor force growth is going to be a key one to watch this year,” he said. “I think you’re going to see some pressure on the overall employment situation just because companies won’t be able to find people to fill the roles that they have.”

alyse@smdailyjournal.com

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