San Francisco Labor Market Picks Up Speed
San Francisco added 6,100 jobs in March, bringing the official unemployment rate to 4.9% compared to a pandemic high of 12.7% in May 2020
The leisure and hospitality sector added new positions, but employment in food service, entertainment and hotels is still down 48% compared to March 2020
California policymakers have introduced "right to rehire" legislation, directing employers to offer jobs first to workers who were let go during COVID
San Francisco's job market appears to be bouncing back, though there's still a ways to go before a full recovery of its pre-COVID employment peak.
The City added 6,100 jobs in March, the largest increase in the Bay Area according to Beacon Economics. The largest gains were in the leisure and hospitality sector, with 5% employment growth month-over-month as COVID cases fell and more businesses opened their doors. The job gains helped to push San Francisco's unemployment rate to 4.9% last month, compared to 5.7% in February and a pandemic high of 12.7% in May 2020.
“Generally, San Francisco’s outlook is very positive, even independent of the latest strong numbers," said Taner Osman, research manager at Beacon Economics and the UCR Center for Forecasting. "We should expect the labor market recovery in San Francisco to pick up speed very quickly as workers return to their offices, the vaccine rollout continues and a semblance of normal life returns in the summer.”
Restaurants, entertainment and hospitality saw the worst job losses of any sector by a wide margin last year, and employment in those positions is still down 48% compared to March 2020. The San Francisco information sector was the only one that grew last month on a year-over-year basis, with 2.2% more employed compared to March 2020. Other large sectors, such as health care, finance and durable goods manufacturing, showed only very modest employment losses.
Compared to prior recessions, COVID had a heavily disproportionate impact on lower-wage jobs, such as food service and retail, as restaurants and storefronts shuttered overnight. What's more, economists posit that the official unemployment rate, which doesn't count people who exited the labor force as opposed to getting laid off, may significantly understate the true scale of unemployment.
Last week, California Governor Gavin Newsom signed a law, SB 93, that requires employers rehiring in hard-hit sectors to offer employment first to workers who were let go during the crisis. Newsom vetoed a prior version of the bill last year, saying the regulations were too onerous for struggling employers.
Earlier this month, the San Francisco Board of Supervisors approved a "right to reemployment" ordinance that mandates many employers to rehire prior employees. As reported by the San Francisco Business Times , the ordinance contains various loopholes pertaining to square footage and other characteristics, and was opposed by local small business groups.
