Economic UpdateLMID Advisory Group Meeting

May 5, 2016

Brandon T. Hooker

Employment Development Department

Labor Market Information Division

Unemployment Rates: U.S. and California

2

Start of California's Economic Expansion

February 201012.2%

March 20165.4%

U.S.February 2010

9.8%

March 20165.0%

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

Jan 2010 Jan 2011 Jan 2012 Jan 2013 Jan 2014 Jan 2015 Jan 2016

Une

mploy

men

t Rate

U.S. and California Unemployment RatesSource: EDD

California

U.S.

Unemployment Rates: State-to-State and National Comparisons

3

Labor Force Participation Rates: U.S. and California

4

Start of California's Economic Expansion

February 201064.7%

March 201662.0%

U.S. February 2010

64.9%

March 201663.0%

60.0

61.0

62.0

63.0

64.0

65.0

66.0

Jan 2010 Jan 2011 Jan 2012 Jan 2013 Jan 2014 Jan 2015 Jan 2016

Labo

r Force Participation Ra

te

U.S. and California Labor Force Participation RatesSource: EDD

California

U.S.

California’s Long-Term Unemployed

5

U.S. and California: Nonfarm Employment Trends

6

California: Industry Sector Trends

7

Nonfarm Employment by Industry SectorProfessional and Business Services

8

5.6

8.97.6 7.9

7.0

‐7.4

‐10

‐8

‐6

‐4

‐2

0

2

4

6

8

10

2011 2012 2013 2014 2015 2016‐to‐date

Thou

sand

s of Job

s

Average Monthly Change in California Professional and Business Services Jobs

March 2016; Seasonally Adjusted Data

9.1 3.2

6.8

5.2

22.5

2.9

0.2 15

.3

10.7

18.2

‐22.5

0.8

‐0.4

‐30

‐20

‐10

0

10

20

30

Mar 15

Apr 1

5

May 15

Jun 15

Jul 15

Aug 15

Sep 15

Oct 15

Nov 15

Dec 15

Jan 16

Feb 16

Mar 16

Thou

sand

s of Job

s

Month‐Over Changes in CaliforniaProfessional and Business Services Jobs

March 2016; Seasonally Adjusted Data

Nonfarm Employment by Industry SectorEducational and Health Services

9

6.65.7 6.0

8.6

7.4

0

2

4

6

8

10

2012 2013 2014 2015 2016‐to‐date

Thou

sand

s of Job

s

Average Monthly Change in California Educational and Health Services JobsMarch 2016; Seasonally Adjusted Data

3.9

9.4

10.5

5.3

32.5

4.2

3.8

3.1

8.0

5.7

6.2

10.4

5.6

0

5

10

15

20

25

30

35

Mar 15

Apr 1

5

May 15

Jun 15

Jul 15

Aug 15

Sep 15

Oct 15

Nov 15

Dec 15

Jan 16

Feb 16

Mar 16

Thou

sand

s of Job

s

Month‐Over Changes in CaliforniaEducational and Health Services JobsMarch 2016; Seasonally Adjusted Data

Nonfarm Employment by Industry SectorTrade, Transportation, and Utilities

10

10.3

2.2

7.0

0.0

23.1

7.2

5.9

‐1.0

4.7

4.2

13.3

‐7.5

11.1

‐10

‐5

0

5

10

15

20

25

 Mar 15

 Apr 15

 May 15

 Jun 15

 Jul 15

 Aug

 15

 Sep

 15

 Oct 15

 Nov 15

 Dec 15

 Jan 16

 Feb

 16

 Mar 16

Thou

sand

s of Job

s

Month‐Over Changes in CaliforniaTrade, Transportation, and Utilities Jobs

March 2016; Seasonally Adjusted Data

4.6

5.9 5.76.0

5.6

0

1

2

3

4

5

6

7

8

2012 2013 2014 2015 2016‐to‐date

Thou

sand

s of Job

s

Average Monthly Change in                          California Trade, Transportation, and 

Utilities JobsMarch 2016; Seasonally Adjusted Data

Nonfarm Employment by Industry SectorLeisure and Hospitality

11

6.0

7.6

5.86.3

5.9

0

2

4

6

8

10

2012 2013 2014 2015 2016‐to‐date

Thou

sand

s of Job

s

Average Monthly Change in California Leisure and Hospitality Jobs

March 2016; Seasonally Adjusted Data

4.0

6.1

4.2 0.6

11.8

4.0

6.0

12.4

5.1 6.

9

2.5

18.3

‐3.2

‐4

0

4

8

12

16

20

Mar 15

Apr 1

5

May 15

Jun 15

Jul 15

Aug 15

Sep 15

Oct 15

Nov 15

Dec 15

Jan 16

Feb 16

Mar 16

Thou

sand

s of Job

s

Month‐Over Changes in CaliforniaLeisure and Hospitality Jobs

March 2016; Seasonally Adjusted Data

Fair Wage Act of 2016

Overview

• Signed into law by Governor Brown on April 4, 2016. 

• Increase the minimum wage by $1 per hour each January 1 until it reaches $15 per hour in 2022. In each year thereafter the minimum wage will be adjusted to keep pace with the cost of living in California.

12

City and County Minimum Wage Ordinances

• In advance of the Fair Wage Act, more than 20 California cities and counties had increased their minimum wage. 

• Cities and counties include: Berkeley, Emeryville, Marin County, Richmond, Santa Monica, etc.                                          Source: UC Berkeley Labor Center

Fair Wage Act of 2016

• The Industry Sectors and Subsectors with the Largest Shares of Hourly Workers ‐ Retail Trade (340,000 workers)

‐ Food Services and Drinking Places (231,000)

‐ Health care services, except hospitals (166,000)

‐ Source: Current Population Survey of Households, 12‐month moving average

• Occupations that Typically Start at the Minimum Wage Level

‐ Amusement and Recreation Attendants

‐ Cashiers

‐ Cooks, Fast Food

‐ Dishwashers

‐ Gaming Dealers

‐ Source: EDD‐LMID, Occupational Employment Statistics Program (OES)

13

Before the Fair Wage Act of 2016Industry Trends at the City Level

City of Oakland

• Minimum Wage in 2014: $9.00/hr.

• Minimum Wage in March 2015: $12.25/hr.

Establishment Analysis (2014:Q2 ‐ 2015:Q2)*

• Accommodation and Food Services

‐ 318 Firms Added Jobs (Range 1 ‐ 93 jobs)

‐ 186 Firms Had Same Number of Jobs

‐ 304 Firms Lost Jobs (Range 1 ‐ 62 jobs)

• Retail Trade

‐ 255 Firms Added Jobs (Range 1 ‐ 263 jobs)

‐ 329 Firms Had Same Number of Jobs

‐ 275 Firms Lost Jobs (Range 1 – 71 jobs)14

City of San Jose

• Minimum Wage in 2014: $10.15/hr. 

• Minimum Wage in 2015: $10.30/hr. 

Establishment Analysis (2014:Q2 ‐ 2015:Q2)*

• Accommodation and Food Services

‐ 566 Firms Added Jobs (Range 1 ‐ 136 jobs)

‐ 398 Firms Had Same Number of Jobs

‐ 592 Firms Loss of Jobs (Range 1 ‐ 49 jobs)

• Retail Trade

‐ 595 Firms Added Jobs (Range 1 ‐ 93 jobs)

‐ 615 Firms Had Same Number of Jobs

‐ 591 Firms Lost Jobs (Range 1 ‐ 573)* Source: EDD‐LMID, Quarterly Census of Employment and Wages