Pasadena’s unemployment rate in May reached 16.8 percent as the COVID-19 pandemic continued to hammer local, regional and national economies, marking an increase of more than four times the local rate over the same time period last year, officials said.
The statistic represents 11,800 people out of work in Pasadena, according to California Employment Development Department data. Data from the private investment firm YCharts put Pasaena’s unemployment figure slightly higher at 17.1 percent.
The unemployment rate was 3.6 percent this time last year, representing 2,800 people out of work, according to the EDD.
“It’s terrible, but it’s not surprising,” Mayor Terry Tornek said. “Pasadena has a lot of employment in activities that are hospitality and tourist-related. So that industry is among those hardest hit: The restaurants, the hotels and the related businesses that serve them. These are our bread and butter,” Tornek said. “And so I’m not shocked by the numbers. They’re appalling, but they’re not surprising.
“The problem is that we don’t control the virus. The virus seems to control us. And so every time we think we’re sort of moving ahead, it sort of laughs at us and pushes us back,” Tornek said.
The unpredictable nature of COVID-19, and the safety measures an outbreak mandates, makes it tough to know when and how much the economy will bounce back, he said.
“It’s sort of symptomatic of the challenge that we have,” Tornek said. “It’s a little difficult to speculate about the future when it’s really not clear what the rates of infections are and how we’re going to be able to reopen.”
Los Angeles County’s unemployment rate hit 20.6% in May, representing 970,100 people out of work, EDD data shows. The statewide figures for May, show a 16.3 percent unemployment rate, while federal statistics reflected a national rate of 13.3 percent.
Figures released at both the state and federal levels show steadily declining unemployment up until the onset of the COVID-19 pandemic, followed by steep spikes.
As a Los Angeles County Labor Market Consultant for the EDD, Juan Millan said he’s never seen such high numbers.
“When we look at the County level unemployment and local area unemployment numbers, it’s extraordinary to see how many people were affected, how such a large segment of the labor force was forced to stop working,” he said. “If you compare the unemployment rate at the county level during this pandemic to the great recession of 2008, we’re looking at almost twice the unemployment rate.”
L.A. County unemployment topped out at about 12% during 2008, Millan said.
“Right now, as a result of this pandemic in 2020, we’re looking at an unemployment rate up above 20% for Los Angeles County. That’s unheard of. We lost over 680,000 jobs on a month-over-basis,” he said.
“Understandably, this is due to the extraordinary and unexpected pandemic. No one has control over this,” Millan added.
The economic pain has hit some businesses harder than others.
“Some of the industries took a harder hit due to the pandemic, for example, restaurants and hotels,” according to Millan. “But there’s some other industries that were affected by the pandemic that people don’t really are not really aware of. For example, automobile repair services, dry cleaners, barber shops and beauty salons.”
At least two popular Pasadena restaurants — Cafe 86 and the Lincoln Cafe — closed down this month.
Government employment has gone down as well, Millan said. “And of course, the school closures had a lot to do with it.”
Millan said federal aid prescribed under the CARES Act is likely preventing a far worse scenario.
“Although we’re looking at a looming number of unemployed people, a good percentage of them are receiving federal relief,” he said. “So that’s really keeping the public in check so to speak, but if the assistance runs out, then the situation will have the potential to get to Great Depression level… a period in which we’ll be seeing things that we did in the Great Depression.”
“You will see people suffering a lot more than what we’re seeing now if this pandemic assistance is not extended,” Millan said.
Economic uncertainty is likely to continue until concrete progress against the novel coronavirus has been made, such as “some kind of comprehensive recovery plan or vaccine,” allowing workers to safely return to work and consumers to get out into the community with confidence, he said.
“It’s dismal, but it’s not unexpected,” Pasadena Chamber of Commerce President Paul Little said of the unemployment figures.
He said he also could not recall seeing unemployment climb so high, so fast, and that federal assistance was likely making a major difference for many of those without jobs.
“Everyone can appreciate the extra $600 a week that the federal government put into unemployment benefits, because a lot of those people in Pasadena who are out of work are in pretty well-paying jobs,” Little said. “…folks who without the $600 couldn’t make the mortgage payment.”
He said while he was confident the local economy will eventually recover, he believes it could take some time.
“I think it’s going to be a very slow process. I don’t think we’re going to see the unemployment numbers drop at the same rate that they rose. I think we’re looking at at least a couple of years until things get back to the 2019 levels.”
Many employers are likely to be mindful of the possibility of another wave of coronavirus, Little said. And until revenues return to pre-pandemic levels, employment may not, either.
“Some employers are going to be making some difficult choices about their workforces,” he said.