The City of the Long Term Unemployed in California

Michael Bernick
Counsel with the international law firm of Duane Morris LLP, a Milken Institute Fellow and former Director of the California Employment Development Department

Not only have the rates of unemployment and underemployment (particularly involuntary part-time work) increased dramatically in California since 2007, but so also has the average duration of unemployment. In fact, as the chart below illustrates, long term unemployment (employment for 27 weeks or over), has increased more rapidly than other unemployment measures both in total numbers of Californians and percent of the unemployed .

Unemployment by Duration: California,  March 2006-March 2010

 March 06  March 07
 March 08 
 March 09  March 10
 Less than 5 weeks  344,000
 5 to 14 weeks   
 15 to 26 weeks
 27 weeks and over  176,000


These duration of unemployment data come earlier this week from Ms. Bonnie Graybill and EDD’s Labor Market Information Division. In March 2007, prior to the Recession, total unemployment stood at 865,000 Californians, of whom 16.8% had been unemployed 27 weeks or more. By March 2009, the number of unemployed had increased to 1,534,000, of whom 24.1% qualified as long term unemployed. Over the next year, the number of unemployed not only grew to 2,152,000, but also the number of long term unemployed shot up to 843,000.

Stated another way, by March 2010, the number of Californians unemployed 27 weeks or longer had reached 843,000, roughly the size of the City of San Francisco.    

Who are the long term unemployed in California? Although EDD does not maintain track this group by, say, occupation or skill level, discussions with local Workforce Investment Board (WIB) directors highlight the presence of older workers and higher skilled workers. These are workers with backgrounds in financial services, computer operations, commercial and residential real estate, human resources. Each of these jobs usually  brings tens, hundreds of applicants when openings are announced.

Jeff Ruster, veteran director of the Silicon Valley WIB (Work2Future), notes that prior to this Recession, his One-Stop Career Centers saw mainly the lower income unemployed, or workers with barriers to employment. The Recession changed this, and workers with college degrees and years of experience appeared in numbers.

These college-educated workers, like all workers who come to the Centers are offered an assessment, followed by either job placement assistance, and/or forms of training. With so many sectors as well as firms downsizing, there is an emphasis by staff on identifying transferable skills.

The Centers do not have jobs to give out, and nobody is guaranteed a job. So as the duration of unemployment grows, so often does the frustration, anger and desperation. Ruster  recalls, "In July 2009, we had a job fair with Safeway, which was opening a new store with a need for cashiers, stockers, store operations. Though we only gave short notice, over 1000 people applied, and over 50% had college degrees." Ruster’s story, of course, is not unusual in California today. Every WIB director in the state I know has a similar story of the surplus of job seekers, including the college educated, pursuing a limited number of jobs.

Ruster points to survey data of Silicon Valley employers indicating more intend to hire this year than the previous two years. But he acknowledges that the increased pace of hiring has yet to materialize.

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