Start of school year fuels California job growth in August

Since February, California has gained an eye-popping 110,600 new jobs on average per month, according to the California Employment Development Department. Nationwide, employers added 235,000 jobs in August, meaning 44% of those gains came in California alone.

"We still have more work to do in regaining those jobs lost to the pandemic, but this is promising progress for California's economic recovery," Gov. Gavin Newsom, a Democrat, said.

While California has set records for the number of new jobs added this year, the data shows it has not been enough to regain the jobs that the state lost. California's unemployment rate, which was at a record low before the pandemic, is now the second highest in the nation at 7.5%, trailing only Nevada.

That suggests that while California has added lots of jobs, even more people are still looking.

"Employment gains have not been sufficient to account for the increase in labor force in the state, so I would say we need to create more jobs," said Sung Won Sohn, a professor of finance and economics at Loyola Marymount University who closely monitors California's job market.

California has so many jobs to get back because it lost so many jobs at the start of the pandemic. The state shed more than 2.7 million jobs in March and April 2020, back when Newsom issued the nation's first statewide coronavirus stay-at-home order.

Just over 1.6 million of those jobs have come back since then, representing 62.1% of the losses. That suggests many workers have yet to return to their pre-pandemic jobs, explaining why many employers have reported difficulty finding enough workers.

That problem has been most visible in the leisure and hospitality industry, where some restaurant operators have said they are struggling to keep up with demand.

The evidence is anecdotal, but it suggests some workers without family economic pressures have decided not to return to jobs in the hospitality industry paying less than $20 an hour, said Michael Bernick, an attorney for Duane Morris and a former director of the state Employment Development Department.

"One scenario is that businesses in these fields turn to business models that require fewer workers. We've seen that before in California," Bernick said.

The hotel and restaurant sector has had the largest job gains in California this year, but data from August shows the pace of hiring has slowed. The industry added just over 33,000 jobs in August after averaging more than 61,000 new jobs monthly between February and July.

But people could be more motivated to return to work in September. Extended federal unemployment benefits ended earlier this month, meaning millions of Californians lost their weekly unemployment checks as their eligibility expired.