More people were working last month in Merced County than at any time in almost 30 years, and the number of people out of work was at its second-lowest point in September – a combination that drove the county’s unemployment rate to its lowest point in decades.
Estimates released Friday by the state Employment Development Department indicated Merced County’s unemployment rate was 5.5%. That’s the lowest it’s been since current tracking methods began in 1990. The previous low-water mark was a year ago, when the county’s unemployment rate was estimated at 6.0%.
Across the central San Joaquin Valley, “August and September are historically the months reflecting the lowest rates each year because of seasonal swings in agricultural employment and because schools have teachers and staff returning to work after the summer,” said Steven Gutierrez, an EDD labor market consultant.
The state estimated the number of people with jobs in the county at nearly 112,000, the highest number for any month going back to 1990. About 6,500 people were estimated to be out of work; that’s the lowest number since 1990. The county’s current population is estimated at almost 283,000 by the state Department of Finance.
The statewide unemployment rate in California dipped to 3.5%, the lowest since 1990, and down from 3.9% a year earlier. The federal Bureau of Labor Statistics reported that the national jobless rate was 3.5%, down from 3.7% in September 2018.
September also represented new record low unemployment rates in Fresno, Kings and Madera counties. In Tulare County, the unemployment rate was 7.6%, well above other central San Joaquin Valley counties and short of the record of pre-recession lows of 7.1% in May and September of 2006.
The numbers released Friday are unprecedented for most of the Valley, said employment analyst Michael Bernick, a San Francisco attorney who served as director of the state EDD from 1999 to 2004.
“For most of the past 40 years, it’s been a double-digit unemployment rate, and in the Great Recession it was up above 15 percent,” Bernick said Friday. “The growth of health care and education (in the Valley) have led to a more diverse economy, and that’s one of the main factors statewide, too. Out of 11 or so major industry sectors, nearly all have shown job gains over the past year.”
Sectors with largest gains
Government jobs with local, state and federal agencies saw the biggest employment gains in Merced County over the past year, together adding about 1,300 jobs. Private-sector education and health services also grew by a combined 700 jobs. .
Bernick said concerns that he and other analysts had that international trade tariffs might harm industries of importance to the state, including agriculture in the Valley, have largely not been realized.
Instead, he said, California has experienced a long-term period of post-recession job growth that has already lasted for 9 1/2 years, dating to the early years of the Obama administration, “well beyond previous employment expansions.”
But, he cautioned, external factors including the national economy and potential effects of longer-lasting tariffs on international trade partners could derail the expansion.
Blake Konczal, executive director of the Fresno Regional Workforce Development Board, said he’s excited about the continued job growth in the region and the health of the local economy in a region that has historically had higher unemployment rates and lower average wages than most of the rest of the state.
“The old adage is that a rising tide lifts all boats,” Konczal said. “And although our boat is coming up less quickly than other parts of the state, it’s still coming up.”
Konczal said one particular bright spot in the Valley is the construction industry, which was hit hard when the house-building boom in the region collapsed in the mid-2000s, helping to spark the Great Recession from 2007 to 2009. “Housing is one of the areas now that is booming over and above the continuing high-speed rail project, and there’s a lot of stuff that’s funded for next year,” he said. “School districts are talking about more facilities construction, and we’re getting people prepped for those construction jobs.”
“We also have a small but important manufacturing sector that is starved for qualified workers,” Konczal added, referring to the stability of jobs producing durable goods rather than food processing businesses that typically see more turnover among employees.
Both Bernick and Konczal tempered their enthusiasm by pointing out what’s not included in Friday’s employment numbers.
“We don’t have a good handle on what we would call the ‘underemployment rate,’ or people working in multiple part-time jobs or multiple jobs in which the wages are not at the level where those workers have been before,” Konczal said. “There are lot of service-sector jobs where people are holding multiple part-time positions and trying to make ends meet.”
Bernick noted that in addition to making no distinction between part-time and full-time positions, the employment figures say nothing about how much the jobs pay.
“When you look at those numbers, they’re sobering,” Bernick said. “Of the 10 job areas that are projected to have the greatest number of job openings in the next decade, eight of the 10 are lower-wage positions such as home care aides, retail, food service, janitorial or maintenance.
“That’s why there is such a push (statewide) to focus on mid-level jobs, tech positions that don’t require college degrees,” he added. “Here in San Francisco, better jobs here are attracting hundreds, if not thousands, of candidates. At the same time, when you talk to people at Starbucks or retail places where the wages are more modest, and they’re having difficulty finding workers.”
Still, he added, wages are growing faster in the lowest-paying positions than in higher-wage jobs – a combination of a rising statewide minimum wage in California that is currently $12 per hour and will rise to $13 in January – and that employers with modest-wage jobs are having to pay more to attract workers.
Unemployment in the Valley is likely to begin creeping upward again when the October figures are released next month, Gutierrez said. “The normal seasonal trend is that we’ll see an uptick next month due to the agricultural season slowing down,” he said. At the same time, retailers in the region will likely begin ramping up for the winter shopping season.