Hiring Workers Has Become Increasingly Difficult
By Joshua Ohl CoStar Analytics August 23, 2021 | 2:25 P.M.
California’s Employment Development Department released the latest jobs data for the San Diego area for the month ending in mid-July, and San Diego reported a drop of 7,800 in total nonfarm payrolls.
This continues the trend of July job losses that are largely baked into the local labor report. In the process, the unemployment rate ticked down to 6.9% from 7%, according to the Bureau of Labor Statistics. That’s 100 basis points lower than California’s statewide unemployment rate.
Local government and education services drove the monthly drop, with 10,400 fewer on payrolls, part of the government sector which led with month-over-month losses of 14,800. That came as local schools wrapped up their academic year and teachers and administrators headed for summer vacation. That number is expected to improve once schools reopen across the region by Aug. 30.
The leisure and hospitality sector led the region in monthly job gains for the sixth straight month after adding 6,100 to payrolls in July. Accommodation and food services payrolls led the sector with an increase of 5,200.
But restaurants and hotels are still reporting widespread difficulty in finding enough candidates to fill open positions. Dishwashers, for instance, are being hired for $20 per hour, while signing and referral bonuses upwards of $2,000 are now common. There is hope that with schools back in session and the additional $300 per week in unemployment benefits expiring on Sept. 6, that more workers will return from the sidelines to fill openings.
This comes at a time when hotel occupancies rose to 80.5% in San Diego in July, the highest level in two years, according to hospitality data from STR, a CoStar company. Leisure travelers are driving the hospitality recovery, resulting in July revenue per available room — an industry standard metric of hotel performance — nearly reaching pre-pandemic levels in the San Diego hotel market.
Retail is also showing signs of turning the corner after new leasing volume in the second quarter reached the highest level in a year.
The construction sector added 2,800 to payrolls in July, while education and health services, manufacturing and professional and business services all contracted month over month.
Once again, on a year-over-year basis, the San Diego region added 60,800 nonfarm jobs, representing an increase of 4.5%.
However, looking back to February 2020, prior to the onset of pandemic-related restrictions and job losses that would soon follow, the picture isn’t quite so optimistic.
San Diego is still down 115,700 nonfarm payrolls relative to February 2020, or 7.6%. Every sector is down over that period, except for construction which added 3,300 to payrolls for an increase of 3.9% over pre-pandemic levels.
The civilian labor force is also down compared to February 2020 levels by 50,000, adding further difficulty in finding enough workers to fill open positions. Top employers on the hunt including University of California San Diego, Scripps Health, Thermo Fisher Scientific and Qualcomm.
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