Merced unemployment improved in July, but COVID and drought mean more uncertainty
Despite the pandemic still impacting many facets of the economy, more Merced County residents had jobs this summer compared to last year, when the region was gearing up for one of its worst COVID-19 spikes to date.
The California Employment Development Department’s latest job numbers released Friday showed that while Merced County’s unemployment fell slightly from 10.8% in June to 10.2% in July, the region’s year-over decrease improved from 13.9% one year ago. At that time, about 15,000 residents were out of work.
Merced County residents faced the region’s highest rate of joblessness during the pandemic in April 2020, when unemployment leaped to 18.5%.
July brought about 600 additional jobs to Merced County, increasing the overall workforce to about 118,000 people.
The state’s unemployment rate remained stable at 7.6% throughout June and July — down from nearly double that at 13.2% last July. Of the 2.7 million jobs lost during March and April 2020 due to the pandemic, California has regained 58.3%.
Nationally, joblessness stands at 5.7%, according to the EDD.
“These number reflect an improvement in the economy as more businesses are more open,” said EDD Labor Market Analyst Steven Gutierrez, who works with the department’s Fresno office.
Local economy is stabilizing — but slowly
Growth is likely to continue, Gutierrez said, but likely in “fits and spurts” as the economy moves through bouts of growing and stalling.
“Hopefully, we are inching in the right direction,” he said.
For example, July’s 10.2% unemployment rate wasn’t the lowest seen in Merced County since the pandemic began. November 2020’s roughly 9% joblessness marked the most notable dip before unemployment rose again throughout the winter months, largely due to seasonal jobs ending.
The increased number of people out of work during June of this year was also typical, as people working in the education sector were laid off while school was out of session, Gutierrez said. Normal trends would show a subsequent rise in employment as those workers are hired back in September or October.
“It seems like everything is trending in the way it normally would for the most part,” Gutierrez said.
Also returning to normal is Merced County’s standing compared to unemployment in jurisdictions throughout the state. Last August, Merced County stood out when local employment fared slightly better than the statewide average. The county’s unemployment has often been double California’s.
Although local joblessness is still closer to the statewide average than it has historically been, Merced County’s unemployment is now the fifth highest out of California’s 58 counties as of July, according to EDD data. That ranking is fairly typical for Merced County, Gutierrez said.
“Unfortunately, the San Joaquin Valley counties all have higher unemployment rates,” he said. Fresno, Tulare, Kings, and Kern counties also rank within the top 10, EDD numbers show.
Agriculture an economic boon to Merced region, but drought means uncertainty
Merced County appears to have weathered the pandemic’s economic devastation relatively better than its neighboring jurisdictions — a fact that local officials and labor experts have credited to the nature of its local economy.
The Merced region’s robust agricultural industry and the many jobs it provides remained strong throughout the pandemic, allowing many local workers’ jobs to remain stable.
The success of the agricultural sector also trickles down into maintaining manufacturing jobs, as well as trade and transportation, as food is packaged and delivered, Gutierrez said.
As is typical for this time of year, Gutierrez said, manufacturing jobs showed a notable increase. The manufacturing industry accounted for Merced’s largest month-over job growth in July, adding 1,100 jobs — mostly for manufacturing of non-durable goods, which includes food.
But a growing source of uncertainty is how California’s drought may — or may not — impact Merced County’s agriculture industry.
A recent decision by the California State Water Resources Control Board could incur consequences for Merced County water users next year due to “emergency curtailment” orders for the rivers of the Sacramento-San Joaquin Delta watershed. The order severs Central Valley farmers from their main irrigation supply as the drought worsens.
Thousands of Valley farmers would be among the first to feel the impacts of being cut off from California’s main rivers and streams, including the more than 2,000 local growers within the Merced Irrigation District. It is uncertain how employment will be effected if farmers are forced to fallow their fields.
If the drought worsens and farmers fallow their fields, that could lead to a decrease in farm jobs, spurring fewer manufacturing, trade and transportation jobs, Gutierrez said. And that in turn could impact the leisure and hospitality industry, as workers within affected sectors tighten their belts and spend frugally.
“You just have to wait and see,” Gutierrez said.
