The San Luis Obispo County unemployment rate in November fell to its lowest point since 2000, but experts say it actually puts the area in a tight spot.
The November rate of 2.9 percent tied for the second lowest in SLO County history — the record is 2.7 percent in October 1999; May 1999 also had an adjusted 2.9 percent rate — according to data released by the California Employment Development Department.
This is down from 3.9 percent in the same month last year and well below the California and U.S. rates of 4 percent and 3.9 percent, respectively, for November 2017.
These historically low rates will make it more difficult for employers to find workers, said economist Robert Kleinhenz of Beacon Economics.
“At first, one might say, that’s good, but economists would say that there is not enough slack in the labor market to enable employers to fill jobs in a timely fashion,” Kleinhenz said. “By the way, at the national level, we have data on job openings, layoffs and separations ... that shows record-high rates of job openings across virtually all types of positions from skilled to unskilled jobs.”
The reason for the tight market? The labor force.
In November, about 137,000 people were counted as employed in the county in a civilian labor force of 141,100. The labor force includes everyone working and looking for work.
The labor force itself grew only 0.1 percent (just 210 people) year over year, Kleinhenz said.
“So the problem right now is that economic growth in the county is constrained by slow labor-force growth,” he said.
In SLO County, the labor force is likely being held in check by high home prices and comparatively low wages, Kleinhenz said. Those act as hindrances for adding new people to the area.
He did note that the county can keep adding jobs if it continues to attract workers who live in adjacent areas, like Santa Barbara County, but work in SLO County. This is already to some effect happening, he said, as demonstrated by data that civilian (or resident) employment in SLO grew by 1,100 in the first 11 months of 2017, but nonfarm jobs employment (essentially total employment, not counting private farms) grew by 2,100. That 1,000 difference is most likely nonresidents, he said.
So as long as those other counties are growing in terms of labor force, SLO County can keep adding jobs as well, Kleinhenz said.
Back to the EDD data, excluding those who are self-employed, companies and agencies in the county reported 1,200 more jobs in November than in the same month last year — about a 1 percent increase.
The biggest gains were made in manufacturing, which added 600 jobs.
The biggest losses were in government, specifically local government, which lost about 600 jobs this year compared with November 2016.
Submit news and notes items for Biz Buzz. Email: firstname.lastname@example.org; on Twitter @SLOBizBuzz; phone: 805-781-7902; fax: 805-781-7905; mail: Biz Buzz, The Tribune, P.O. Box 112, San Luis Obispo, CA 93406-0112.
Tell us your best business advice
What’s the best piece of business advice you’ve ever received? And how has it helped make you more successful in your business/professional life? Tell us in 100 words or fewer, and send it to email@example.com. We will publish them in future Biz Buzz columns.