California's Rebounding Economy Threatened by Worker Shortage

California's economy is picking up steam but a new jobs report shows that much of the state's economy is still sputtering. Len Ramirez reports. (4-8-21)

Video Transcript

- We're going to begin with a disconnect in the State's employment picture. California jobless claims are the highest they've been in three months, more than 145,000 filings last week.

- But some industries say they are struggling to find workers. So what gives? Now, at 6:00, KPIX 5's Len Ramirez is live in San Jose with why things don't seem to be lining up. Len.

LEN RAMIREZ: Well, this is a very unusual situation right now in California. Unemployment is spiking, but you could walk into practically any of the restaurants behind me here and get a job right now. Now, it may be that people don't want the kind of jobs that are being offered right now, and there could be a variety of reasons for that. But the bottom line is, until this job picture straightens out, California's economy may continue to sputter along.

Restaurant server, Marina Manzano, has been laid off twice, once in the first shutdown, then again in the December surge.

MARINA MANZANO: It was very hard because, before I never been out of work, and then all of a sudden, you have to start to learn how to survive.

LEN RAMIREZ: Recurring layoffs like hers or what's behind the latest spike in California unemployment. 145,000 jobless claims were filed last week, up 16,000 from the week before, the highest number since the first week of January.

MICHAEL BERNICK: California's numbers are going up.

LEN RAMIREZ: And labor attorney and former head of the EDD, Michael Bernick, found 75% of California's jobless claims were from workers' second or third layoff.

MICHAEL BERNICK: What it suggests is the large number of continued layoffs and volatility, businesses bringing back people, but then laying them off again.

LEN RAMIREZ: Business owners say has been all but impossible to keep a stable workforce.

DAVID MULVIHILL: Well, you would hire people back, and then you would have a shutdown, and then you'd have to lay them off again.

LEN RAMIREZ: Now, hospitality workers are back in demand as restaurants are free to move up to 50% capacity.

ERIN MURPHY: In front of the house, back of the house, servers, hosts.

LEN RAMIREZ: She's HR director for a South Bay restaurant group that has hundreds of openings, but no one is applying.

ERIN MURPHY: Well, you know, we're kind of wondering where everyone went.

LEN RAMIREZ: One factor could be the jobs just don't pay enough. Workers have found that four jobs paying less than $25,000 a year, they can actually bank more money by staying on unemployment. One manager says it's threatening the economic rebound.

- Even when things are opened up 100%, I think a lot of businesses are not being able to open up as much as they want, because of the hiring issues right now.

LEN RAMIREZ: Now, businesses are having to get more creative to try and get employees in the door. Some are offering incentives to their own employees, the existing employees, to try and bring in other employees. They're giving them bonuses if they can bring in friends or family. But I'm sure these restaurants, especially were not banking on this, as the California economy tries to reopen. Who would have thought they would have trouble finding workers?

Reporting live in San Jose, Len Ramirez, KPIX 5.