California Has Not Regained All of the Jobs Lost in Pandemic-Caused Recession

As the coronavirus pandemic shows no signs of ending, California is still recovering from the most damaging recession since the Great Depression. By October, California had regained only about two-thirds of the 2.7 million jobs lost in the early months of the pandemic.

The state lags behind the rebound rate in the rest of the U.S., and isn’t likely to see a full recovery until the end of 2023, according to a recent report from the California Center for Jobs & The Economy.

One of the biggest challenges is getting people back to work, especially as new coronavirus variants continue to emerge and cause uncertainty.

Within a couple of hours after health officials confirmed that the first U.S. case of the omicron variant had been detected in San Francisco, CalMatters and the Milken Institute co-hosted a discussion Wednesday, moderated by CalMatters economic reporter Grace Gedye and titled “The Post-COVID Recovery: California’s lagging employment rate.”

Panelists discussed why the lag exists: While California has always had a relatively high unemployment rate, the state was also hit harder by the pandemic, in part because its economy relies on the tourism and entertainment industries.

COVID has changed everything

The threats of COVID-19 have necessitated a lot of adapting — to new safety protocols, as well as new consumer behaviors. Manuel Pastor, director of USC’s Equity Research Institute, noted a few of those structural changes to the economy, including the shift from services to goods as businesses ceased traditional in-person services.

Pastor described what he called an “economy based more on mutuality” — one in which business owners have a heightened sense of the well-being of their employees. And he noted the rise of a “just-in-case” economy, where business owners have become better prepared for supply shortages or workers needing to take time off.

Perhaps the most lasting change: The switch to remote work, which Pastor predicted will continue as companies try to grapple with the fact that many workers do not want to return to the office.

Somjita Mitra, chief economist for California’s Department of Finance, said that the pandemic accelerated trends that were already in place, such as less shopping at brick-and-mortar stores and the decline of manufacturing.

Small business owners also saw those trends take hold, noted Reign Free, owner of The Red Door catering company in Oakland. “People aren’t having large events and coming out to dine, so how can we service our clients where they are, in a responsible way?” Free said.

Free also said the pandemic emphasized the need for business owners to own their own space, instead of being “at the mercy of your landlord.”

Reason to be optimistic

While there’s plenty of reason for concern, there are also some points of optimism.

According to Mitra, while the recession has been the worst to hit the state since the 1930s — and there’s still a long way to go, the economy has snapped back relatively quickly. She also pointed to indications that residents are optimistic about the economy, including another way to look at the “Great Resignation:”

“People don’t quit jobs if they think the economy is going to crash soon,” she said. “The fact that people are quitting and trying to find better employment, or start their own businesses, or move — there’s a lot of optimism that people have in terms of the recovery.”

Pastor said that while there certainly have been hardships, especially among lower-income Californians and the most vulnerable, the billions of dollars in state and federal relief and other actions were “remarkable” in preventing a recession that affected everyone.

Instead, there was more of a micro-recession. In addition to workers in some industries being able to work remotely, rising housing prices and the stock market boom meant “wealthy people cleaned up,” he said.

Small businesses are struggling

Pastor called the pandemic recovery a transformational moment for workers — not so much a “Great Resignation” as a “Great Awakening,” in which people are rethinking the role of work in their lives. Besides unemployment benefits, there are a number of reasons why people may not return to work, including child care needs or health risks, Free said.

But while large companies may be able to stay afloat through this transformation, small business owners need more support.

Julian Cañete, president and CEO of the California Hispanic Chambers Of Commerce, said that grants and loan assistance provided a bridge for many small businesses, but many still had to close their doors.

“It wasn’t just the pandemic that hit,” he said. “When you’re hit with the wildfires in some of the areas of the state, that also has an impact on everything — on employment, on recovery, everything else.”

“I just hope,” Cañete added, “that the legislators and policymakers realize that these small investments have been important to small business, but it’s important to our future economic growth and we need to continue them.”



  1. Someone is drinking too much of the koolaid… more like Jobs Lost in LOCKDOWNs due to Poor Policy Decisions.

    ——-The 2020 Recession: Blame Lockdowns, Not the Virus (AIER Mar2021)——

    “It is a well-established fact that the lockdowns have devastated the economy in a manner unseen since the Great Depression.”
    “Attributing the negative economic reality to the “pandemic” fails to recognize the causal agent of this downturn in employment and production: lockdown policies.”
    “State-enforced lockdowns create uncertainty, which impacts business investment, winnows savings, and destroys consumption at every point along the term structure of production. ”

    “….strange and economically ludicrous idea that forcefully shutting down society will not have a devastating impact,
    especially when Covid-19 has been confirmed to be a relatively mild disease that is mostly dangerous to the elderly and immunocompromised.”

    “States such as New York, California, and Massachusetts issued wide-ranging executive orders shuttering businesses, mandating social distancing, and mask-wearing early on in the pandemic… other states largely abstained from imposing top-down controls on their citizens. ”

    “…Florida has kept in-person K-12 schooling open throughout the pandemic, has enforced no mandatory travel quarantine, and imposed no statewide capacity restrictions on restaurants.”

    “CA and FL have similar Covid cases and deaths per 100,000 population: 119 vs. 135 and 8,621 vs. 8,370, respectively.
    Despite FL having a significantly higher at-risk, elderly (65+ years old) population than CA,
    16.5% vs. 14.8%,
    CA actually experienced more nursing home deaths per 100 residents than FL: 2 vs. 1.”

    “The Major Difference between FL and CA?
    Unemployment: FL’s rate is 6.1% while CA’s is a whopping 9%.”

    “…ten states achieved record low unemployment rates as low as 4%”.. with no restrictive authoritarian control of the population..

    “…six states & Wash, D.C. have historically high unemployment rates greater than 8%”…most with highly restrictive lockdown policies.

    “The Covid-19 pandemic has brought about the greatest economic contraction in modern recorded history …..To suggest that Covid, not the unprecedented halting of societal activity with the force of government is responsible, would be the height of ignorance.
    Lockdowns as they have been applied in 2020 have never been implemented in the history of public health and now we have seen why. The data is clear.
    Lockdowns have caused an unprecedented level of economic damage that has far exceeded any event in modern history be it another pandemic or a financial crisis.”

  2. Wake up. California has always hated and continues to hate small business. Covid is just a convenient flashpoint.

    How many stock options can a bureaucrat get at a small business?

    Are any offering nice cushy CEO or executive director NGO positions?

    How many lobbying dollars can mom and pop conjure up after they pay their employees, stock up on inventory, comply with the byzantine regulations, and raise their kids with what’s left?

    Oh yeah, let’s outlaw leaf blowers to save the planet while we are at it.

    There are two kinds of small businesses in California, those that have gone out of business and those that are about to. In the long run, its better to just be unemployed or a cog in the corporate wheel, or more likely a gig worker in it. Exactly by design.

    Download their app and maybe they will grant a few of you the chance to bid on cleaning someone’s toilet. And instead of negotiating for a better fee, they will just let you shame their “clients” by exposing your meager tips. In mean time, they will profit from distracting yourself with a contrived race war, or some porn… tap here for your dopamine hit!

    You are captive to the puppet masters who run your “leaders” and arbiters of their “truth”.

    Wake up, if not for yourself, for your kids.

  3. SJI is part of the problem. What a bunch of garbage. They know its all a lie. People have lost so much due to work BS decisions and policy. The media is so beyond corrupt!!!

  4. First to shut down, last to reopen California. We’re still wearing masks to walk to our tables in restaurants after which we can take them off again once we’re in close proximity to others. Same logic from the very beginning where childcare was shut down for everyone except “head start” the childcare for people who aren’t employed or going to school. Today masks remain the most important thing we can do unless you’re a politician who wants to have fun. You’re getting exactly what you voted for. Congrats.

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