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Unemployment rate continues to drop, labor force falls short 

SLO County's unemployment rate dipped below 4 percent for the first time since the pandemic started, a milestone for economic recovery. But experts say the labor force may be forever changed by the events of the last nearly two years.

click to enlarge STAFFING STRUGGLES SLO County's unemployment rate hit an all-time pandemic low, but the economy is still struggling in other ways. Plenty of downtown SLO businesses have "now hiring" signs, like this one at Shin's Sushi on Monterey Street, in their windows. - PHOTO BY MALEA MARTIN
  • Photo By Malea Martin
  • STAFFING STRUGGLES SLO County's unemployment rate hit an all-time pandemic low, but the economy is still struggling in other ways. Plenty of downtown SLO businesses have "now hiring" signs, like this one at Shin's Sushi on Monterey Street, in their windows.

According to data released on Dec. 17, SLO County's unemployment rate was 3.6 percent in November. The last time the county's rate was below 4 percent was in March 2020, right before it spiked to more than 14 percent a month later.

"It's very close to the pre-pandemic level, and it's definitely heading in that direction," said Andriy Moskalyk, the Central Coast's labor market consultant from the Employment Development Division. "But there's still a few percentage points that we could go down."

The unemployment rate typically fluctuates throughout the year due to different industries being in or out of season, such as agriculture. In 2019, on average, it was around 2.5 to 3 percent in SLO County.

Looking at the month of November, the rate was 3.2 percent in 2017, 2.8 in 2018, and 2.7 in 2019. Then in 2020, due to the pandemic, it was 5.4 percent, compared to 3.6 percent this year.

"It's almost there [at pre-pandemic levels], and definitely much lower than what we saw last year," Moskalyk said.

That being said, this metric alone doesn't tell the full story.

"Because the unemployment rate is a calculation of the unemployed divided by the labor force, it's worth mentioning that even though the unemployment rate is down significantly, we still have people who have not rejoined the labor force," Moskalyk explained.

In SLO County, the labor force is still short 6,200 people right now compared to this time in 2019, Moskalyk said.

SLO Chamber of Commerce President and CEO Jim Dantona said the labor force may never look quite the same as it did in pre-pandemic times.

"The pandemic changed a lot of people's idea of work, and how they do work," Dantona said. "All you have to do is look around town and see how many 'help wanted' signs there are. There's still room for economic growth, certainly, but I think the pandemic changed a lot."

While the struggle to find employees is hard on business owners right now, Dantona said it's not all bad.

"People are employed who want to be employed: they're getting jobs, their wages are increasing because there's a lot of demand and a short supply of labor, so people can spend money in the economy," he said. "So from that perspective, that's good news."

For businesses though, it means increasing wages to entice people to come and work, and in turn, raising prices to compensate for that, Dantona said.

"But because those two things are happening, I think it's healthy," he said. "People are earning more so they can spend more, you have to pay more and you have to raise your prices, but all those things are in the right way to drive an economy forward." Δ

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