Merced County employment creeps up in July, but education, leisure, hospitality hit hard
Continuing a streak of gradually declining unemployment, Merced County joblessness inched downward for the third period in a row between June and July, according to California Employment Development Department numbers released Friday.
Merced County unemployment in July modestly fell to 14.5% from 15.6% in June.
The news was received with guarded enthusiasm by some economic analysts, who expressed concern in July that the second round of economic shutdowns ordered by Gov. Gavin Newsom in response to soaring COVID-19 cases could lead to another dramatic rise in job losses.
The first wave of economic restrictions resulted in the hemorrhaging of jobs for more than 87,000 workers in the Valley in March and April.
Still, the number of people employed in July across the Valley is still about 67,300 lower than it was in pre-pandemic February.
With the exception of government jobs, each of Merced County’s industry sectors saw small gains or no change in employment between June and July.
“Overall, I think it’s better than what most people expected to be,” said EDD Labor Market Analyst Steven Gutierrez.
But compared to July of 2019, all but one sector is in the red, aggregating a net loss of 4,800 jobs. The exception was mining, logging and construction, which saw neither improvement nor loss.
The leisure and hospitality industry was hit hardest by the pandemic, as pleasure travel was curtailed and many bars, dine-in restaurants and retailers were closed. The industry saw the largest year-over-year decrease on record in Merced County, with 1,300 fewer jobs compared to July of last year.
The leisure and hospitality industry grew slightly since June by 100 jobs, but the increase fell short of recent growth. May to June gains came to 44%, while June to July was 2.2%.
“Pandemic restrictions likely dampened job growth in leisure and hospitality in July,” Gutierrez said.
July’s unemployment rate maintained Merced County just above the (not seasonally adjusted) statewide rate of 13.7%. California has regained almost a third of jobs lost during the height of the COVID-19 pandemic’s economic toll between March and April.
Coming impact still uncertain
Since the coronavirus pandemic’s negative economic impact began to take striking effect nationally, Merced County’s unemployment rate has hovered closer to the statewide average than typical. Historically, the county tends to double California’s overall joblessness.
Saving Merced County from doubling California’s record job loss is largely due to its strong agricultural economy, Gutierrez has emphasized.
Agriculture jobs trickle down to other sectors like manufacturing, including food manufacturing, he said. Farm jobs again rose by 100 jobs between June and July, and manufacturing increased by 200.
“Agriculture hasn’t really been disrupted like the other industries have,” Gutierrez said, noting that some counties with larger tourism and hospitality-dependent economies have suffered more severe impacts during the pandemic. Los Angeles County’s July unemployment rate came to 18.2% in July.
However, Gutierrez expressed concerns that farm jobs may not buoy the local economy through the year’s end. As the autumn and winter seasons approach, farm-related employment typically falls.
Compounding Gutierrez’s concerns is the question of the future of education-related jobs.
Seasonal education employment loss is expected during summer months. Merced County’s most significant area of job loss in July was government jobs, which fell by 2,400 on account of normal seasonal patterns, Gutierrez said.
Much of the decrease is attributed to an 18.9% decrease in local government jobs, which includes education.
But the transition of most schools to remote online learning for the 2020 school year’s start means employment prospects for educational support staff, like teacher’s aids and cafeteria workers, is uncertain.
“With the virtual online (school) that’s going on, a lot of that support staff may not be coming back,” Gutierrez said.
The cutoff for monthly EDD unemployment data occurs in the middle of each month, meaning the education job landscape may not be clear until at least September’s EDD report.
The lag also means that concerns expressed by economic experts in July over the new wave of statewide shut downs could still come to fruition in August’s data, Gutierrez said.
“If (other industries) don’t rebound, that’s just adding more fuel to the fire,” he said, adding, “We could be seeing double digit unemployment for the whole year.”
Merced County unemployment has not dipped below double digits this year since January, when it came to 9.8%.
“With the reimposed economic shutdown going on, Merced County’s job growth is expected to move slowly in the coming months,” Gutierrez said. “I think you’ll see a lot of businesses sputtering along and trying to make it.”
This story was originally published August 21, 2020 at 3:46 PM.
