The California labor market collapsed in late March and early April due to the coronavirus disease 2019 (COVID-19) pandemic. In response to COVID-19, state and local officials took steps to limit the spread of the disease. The Governor issued a statewide stay-at-home order on March 19. Since that time, public health officials have issued various directives limiting daily activities. These efforts, as well as health concerns, depressed economic activity across the state. As a result, many employers cut jobs. In this post, we take a closer look at how the pandemic has affected different industries and different types of workers in California.

Job Losses Due to COVID-19 Steeper and Faster Than the Great Recession

Between February and September, the California economy lost a total of 1.6 million jobs. COVID-19 job losses occurred more rapidly than during earlier downturns. As shown in the figure below, the state lost 2.6 million jobs in March and April, whereas job losses during the Great Recession accumulated over a period of more than 30 months. In May and June, spread of the virus slowed somewhat and public health officials allowed some activities to resume, leading many businesses to resume operations and hire or rehire employees. By September, employers had hired or rehired about 1 million workers.

Recent Job Losses Erase Gains Made During Long Expansion

The state enjoyed 11 years of job growth before the pandemic. As shown in the figure below, however, recent job losses have offset all job growth in the state since mid-2015.

Which Industries Have Been Hardest Hit by the Pandemic?

Close-Contact Service Industries Hardest Hit, but Few Industries Spared. As shown in the figure below, COVID-19 job losses have been most dramatic in close-contact jobs and industries related to tourism and travel. Almost all other industries have suffered smaller percentage declines in employment, ranging from 3 percent to 12 percent. Only one industry category—finance and insurance—has not lost jobs.

Which Workers Have Been Hardest Hit by the Pandemic?

According to the federal Current Population Survey (CPS), about 1.6 million fewer Californians were employed in September than in February. The figure below compares the share of the workforce represented by different groups and the share of job losses since February represented by those same groups. (In this analysis, job losses differs from the unemployment rate in that it includes workers who are unemployed and looking for work as well as workers who have dropped out of the labor force.) In cases where the share of job losses exceeds the share of the workforce, these groups have experienced disproportionate job losses during the pandemic. Below, we highlight a few key findings from this data.

Women Have Experienced Disproportionate Share of Job Losses. As of February 2020, women made up 45 percent of the workforce. Since then, however, women have accounted for 53 percent of overall job losses, higher than their representation in the workforce. Men, on the other hand, represent a lower share of job losses than their share of the workforce. 

Job Losses Rates Highest Among Youngest Workers. Workers under 25 years old represent 11 percent of the statewide workforce but account for 24 percent of statewide job losses. The next older group of workers—those between 25 and 34 years old—experienced fewer job losses relative to their share of the workforce. Mid-career workers—those between 35 and 54 years old—experienced job losses between February and September that roughly correspond to their share of the workforce. Late career workers have fared somewhat better, overall, representing 22 percent of the workforce but only 15 percent of job losses.

Less Educated Workers Account for Nearly All Job Losses. Almost all job losses have been among workers with less than a Bachelor’s degree. Specifically, while workers with no high school degree, a high school degree, or some college (including associate’s degree holders) make up a total of 60 percent of the workforce, these workers account for 97 percent of net job losses since February. 

Latino Workers Experienced Disproportionate Share of All Job Losses. Latino workers represent 38 percent of workers in the state but account for 50 percent of job losses since February. White workers experienced proportionally fewer job losses relative to their share of the workforce. White workers represent 39 percent of the workforce but account for 25 percent of job losses since February.

Why Have Some Groups of Workers Been Harder Hit Than Others?

Groups Most Affected by Pandemic Overrepresented in Close-Contact Industries. As discussed above, job losses since February generally have been concentrated among women, younger workers, less educated workers, and Latino workers. Job losses are concentrated among these groups, in part, because these workers make up a disproportionately large share of the workforce in close-contact industries that have been hardest hit by the pandemic. These industries include personal care services, which includes hairstylists, barbers, nail salon workers, and massage therapists; accommodations and food services, which includes restaurant and hotel workers; and entertainment and recreation, which includes staff at gyms, amusement parks, and golf courses. In these three industries, for example, workers with less than a Bachelor’s degree make up 80 percent of the workforce, compared to 60 percent across the state’s entire workforce. Similarly, workers under 25 years old are more than twice as likely to work in close-contact industries than older workers. Finally, women are 30 percent more likely than men to work in close-contact industries.

Latino Workers Make Up Disproportionate Share of Workers With Lower Education Levels. As discussed above, differences in education levels dictate large differences in job losses since February. Latino workers are overrepresented among groups of workers with less education. Specifically, 53 percent of workers with less than a Bachelor’s degree are Latino, whereas Latino workers represent a much smaller share, 38 percent, of the state's workforce. As a result, due to (1) the concentration of job losses among workers with lower education levels and (2) the concentration of Latino workers in these groups, job losses during the pandemic have disproportionately affected Latino workers. Specifically, as mentioned above, while Latino workers make up 38 percent of the workforce, they account for 50 percent of job losses since February.

Even Among Less Educated Workers, Rates of Job Losses Slightly Higher Among Latino Worker. Among the state’s workers with less than a Bachelor’s degree, Latino workers experienced disproportionate job losses. Latino workers make up 53 percent of workers with less than a Bachelor's degree, but account for 58 percent of job losses among these workers. White workers, on the other hand, make up 33 percent of workers with less than a Bachelor’s degree and account for 26 percent of job losses. 

Gender Disparities Most Pronounced Among Less Educated Workers. Overall, women have experienced a disproportionate share of job losses since the pandemic began, as discussed above. This disparity between women and men is more pronounced among less educated workers. As shown in the figure below, about one in five women with less than a Bachelor's degree has lost work since the pandemic began (19 percent), about double the rate among men with less than a Bachelor's degree (10 percent). One reason less educated women may have experienced a greater share of job losses than their male counterparts is that a larger share of less educated women work in close-contact industries. While about one in six less educated men work in close-contact industries, nearly one in four less educated women work in close-contact industries.

Significant Overlap Among Hardest Hit Groups. The four groups most impacted by job losses—that is, women, younger workers, less educated workers, and Latino workers—are not mutually exclusive. Instead, many workers fall into more than one group. As an illustration, statewide, there are about 2.5 million Latina workers with less than a Bachelor’s degree. Overlap among groups means that workers who are reflected in more than one disproportionately impacted group tend to have higher rates of job loss. As a result, for example, Latina workers with less than a Bachelor's degree have been three times more likely to lose work since February than the average worker. Specifically, nearly one in four (550,000) Latina workers with less than a Bachelor’s degree has lost their job since February, compared to just 1 in 12 workers statewide.

Methodology

Industry data is from the Bureau of Labor Statistics’ (BLS) monthly Current Employment Statistics survey. This survey includes about 145,000 businesses and public-sector organizations each month. Data on individual employment is from the CPS, overseen by the BLS and the U.S. Census Bureau. The CPS is the federal government’s primary source for employment rates and other labor market information. We downloaded the CPS microdata from IPUMS, hosted by the University of Minnesota.