Exciting news to celebrate this Labor Day: Sacramento, Fresno and Stanislaus counties have seen some of the most robust job growth in the nation.
Now, the not-so-celebratory news: These same places have seen some of the most minimal pay raises in the country.
Sacramento County ranked 67th in job growth in the year ending March, according to the federal Bureau of Labor Statistics in a new report.
But it ranked 225th in percentage increase in average weekly earnings for the first three months of the year compared to the same period last year.
One of the main reasons for the gap in the Central Valley is that jobs in the service sector and hospitality are growing rapidly, in many cases faster than higher-paying jobs in technology and professional services.
“The high-paying technology sector, which was once the workhorse of the state’s economy, has slowed or reduced employment, while low-paying service sectors, including bars, restaurants and accommodation, increased employment,” said Sung Won Sohn, chairman. of SS Economics in Los Angeles.
He noted that the greatest employment growth relative to wage growth differentials has occurred in the Bay Area. Employment rose 10.1% in San Francisco, but wages fell 9.1%. In San Mateo County, there were 7% more jobs, but the average weekly wage fell 9%.
where are the jobs
Commerce, transportation, and utilities were the state’s top employer category in July, followed by education and health services, business and professional services, and government. Leisure and hospitality were next, but showed the strongest year-over-year growth in employment numbers.
Last month, the state’s unemployment rate was 3.9%, matching the rate reported in February 2020, just before the COVID-19 pandemic sent job losses skyrocketing.
As of last month, “California’s private sector has fully recovered from pandemic-related losses,” the state’s Department of Economic Development said.
But not the leisure and hospitality sector. It had 2.05 million jobs in February 2020, the month before the COVID-19 pandemic. Jobs have become scarce during the COVID-19 pandemic as tourism declined and independent restaurateurs often struggled to survive.
They often had difficulty finding workers. At the height of the COVID-19 pandemic, a skilled unemployed worker could receive up to $1,050 per week. The extra COVID money ended last year and the current maximum benefit is $450 per week. The federal government also provided three economic stimulus payments to those who qualified in 2020 and 2021.
The leisure and hospitality sector is still trying to recover. By July 2022, it had still not returned to its pre-COVID level in California.
The sector employed 1.9 million people in the state in July, though its job growth has easily outpaced other employment categories over the past year. A total of 172,000 jobs were added in leisure and hospitality, well above professional and business services at 138,700.
Compensation and jobs
The federal bureau collected data from 355 of the nation’s largest counties. The job growth figures measure from March 2021 to March 2022. The wage growth data compares the first three months of 2021 to the same period this year. The figures:
▪ Fresno County, 24th in job growth, 263rd in wage growth.
▪ Stanislaus County, 65th in job growth, 292nd in wage growth.
▪ Merced County: 20th in job growth, 333rd in wage growth.
▪ Placer County, 32nd in job growth, 297th in wage growth.
▪ San Luis Obispo County: 82nd in job growth, 308th in wage growth.
The future for wage growth – as it struggles to keep up with inflation – may not be bright, experts noted.
“The most positive aspect of California’s labor shortage throughout 2020 and 2021 has been wage gains, and the greatest gains were in the lowest-paying jobs.” said Michael Bernick, former director of California’s Department of Employment Development and now an employment law attorney at Duane Morris LLP. “Those gains have slowed this year, and with inflation far out of control, many workers in this state find themselves falling back,”
This story was originally published September 5, 2022 5:00 a.m.