Can Merced County return its unemployment to pre-pandemic lows? Leaders have a plan
The beginning of the pandemic marked a chaotic time for economies across the globe, including Merced County’s, as joblessness abruptly shot up and many businesses shut down.
Almost two years later, the economy has stabilized and adapted, compared to the unpredictable shifts that distinguished 2020. Merced County officials say they see an opportunity to coax local unemployment back down to pre-COVID-19 levels.
The local labor force is 2,400 workers away from returning to the “best economy we’ve had in a generation,” Merced County Department of Workforce Investment Director Erick Serrato explained during Tuesday’s Board of Supervisors meeting.
That strong economy was seen in September 2019, just months before COVID-19 struck. Merced County was on an upswing at the time with a 6% unemployment rate, meaning more people were employed than in nearly 30 years.
By April 2020, the pandemic transformed those record lows into the highest monthly figure in years — nearly 19%. Local unemployment dipped to about half that goliath height in 2021, averaging about 9.8%, according to the latest California Employment Development Department numbers.
The year finished out with a 8.2% joblessness rate in December. In other words, 2,400 workers short of the strong 6% unemployment recorded in September 2019.
“That actually gives me a lot of optimism, because that is our opportunity space,” Serrato said.
That is, if residents want to return to the labor force.
California workers leave jobs
Like many employers throughout California, those in Merced County are reporting difficulties retaining and recruiting workers, local officials said Tuesday.
“I continue to hear from our employers here in the county, in my district and county-wide, that they cannot find people to work. So it seems like that 2,400 should be easy to achieve,” Supervisor Daron McDaniel said.
The phenomenon, christened the “great resignation,” has led to more workers quitting their jobs than at any point in the last two decades, according to the Public Policy Institute of California.
Statewide, the so-called great resignation is largely concentrated in low-wage sectors like leisure and hospitality and middle managers in white-collar jobs.
“That is not happening here,” Serrato said. “What is happening is a phenomenon around young people and young workers.“
Merced College enrollment consistently dropped throughout the fall 2020 and spring 2021 semesters, Serrato noted. Nationwide, community college enrollment dropped 13% since fall 2019, according to the National Student Clearinghouse Research Center.
While some labor experts have speculated that the would-be students have traded the classroom for entry-level jobs, other labor economists, Serrato said, have reported many young people are “idle.”
“When you have the pipeline that is supposed to supply new workers suddenly sort of disintegrate, you face sort of a labor crisis,” he said.
Also at play is competitive pay offered in nearby counties like Stanislaus and the Bay Area.
“It’s easy to drive 20 minutes up the road and earn maybe $1, $1.15 more than an employer is able to pay here,” Serrato said. “We’re competing with that.”
How the Merced County plans to help workers
Despite the hurdles, county Workforce Investment officials say plans for Worknet Merced County in 2022 will help boost local employment.
Worknet helps residents develop skills, training and education to become more employable, while helping employers hire and retain employees. Programs also include those specializing in aiding inmates, homeless residents and English-language learners.
Merced County youth will get extra help from Worknet this year with new programs that focus on work experience in rural communities, as well as getting young people connected to jobs that provide wage increases and career pathways.
Plus, the City of Merced committed $1 million in American Rescue Plan Act dollars to a two-year partnership with Worknet Merced County. The funds will kick off new workforce development training programs, with the hope of bolstering economic success for young adults.
Merced County’s track record of helping youth through Worknet looked good last year. Out of 253 youth assisted in finding a job or going back to school, 75% earned credentials and almost 72% were employed after six months. Both metrics are above the state goal, Serrato said.
Another nascent program in 2022 will be support for underemployed residents, meaning the “working poor” whose earnings are less than they want or need. The county is looking to start a wage replacement initiative that would pay workers while they train for higher paying jobs, Serrato said.
Merced County’s childcare shortage is expected to see relief this year, too. With fewer than 200 home-based childcare locations in the county when an estimated 2,100 are needed, the county is facing a childcare crisis, Serrato said. County Workforce Investment will focus on bridging the 1900-individual gap.
Workforce Investment is also deploying Worknet pods at public spaces throughout the county so that county-wide, any resident is within a 15-minute drive of career counseling.
“I think the message you can take away from this is if you’re unemployed or underemployed, we have resources available,” County Supervisor Scott Silveira said.
