California’s Unemployment Is On The Rise And No One Is Surprised

California’s unemployment has increased in the past week after changes were made to the state’s workforce. New government data has shown that the state has seen a notable uptick in individuals filing for unemployment benefits, a trend that could continue to go up. While California isn’t unique in seeing more people unemployed recently, the state’s stance after passing new legislation for the minimum wage for fast food workers has made many allege that unemployment will only keep rising throughout the Golden State.

Unemployment Goes Up In California

Based on data from the Department of Labor, California has seen a surge in unemployment benefits in the week ending on March 30. This data revealed that jobless claims increased by 2,147.

Compared to other states in the U.S California’s increase in jobless claims is the highest in the country.

Unstable Labor Market

In comparison to other states in the U.S. California’s labor market continues to be unstable. Despite the fact that it has recovered since the COVID-19 pandemic, it still has yet to return completely from pre-pandemic levels.

Because of this, California has the highest unemployment rate in the country at 5.3%. It is worth noting that this is lower than the 16% that it used to be during the pandemic, it is still a ways away from the pre-pandemic rate of 4.4%.

Job Losses

There are multiple reasons why more people may have filed for unemployment benefits in these past few weeks in California, especially because the state has had huge changes occur within its workforce.

Data shows that job loss has been seen most significantly in the construction industry, approximately 9,600 jobs were cut in that sector.

Fast-Food Establishments

Even prior to this new law going into effect in April of 2024, many fast-food establishments were saying they would need to cut jobs in an effort to mitigate the increase of their employees’ pay.

Pizzerias like Pizza Hut were among the first to lay off workers, specifically delivery drivers. These eateries claimed that they had to do this because of the new law.

Minimum Wage Law

In light of the new minimum wage law for fast-food employees, multiple analysts cautioned that California’s unemployment will likely rise in the near future.

According to this new law, fast food workers throughout the state will now earn $20 an hour, at the minimum.

Continued Surge In Unemployment

Analysts remain concerned that more job cuts in the fast-food industry could transpire as restaurants struggle to find ways to work under this new law.

If fast food layoffs start to occur at a larger number, then the weekly jobless claims in California may only continue to go up.

Critics

The new law has earned criticism from many people throughout the state, both from conservatives and small business circles. Despite this many also support the new law.

A lot of people who work in the fast food industry welcome the increase in pay with open arms. While analysts see the law harming the restaurant industry as a whole.

Fast Food Workers Support

This new minimum wage law was implemented by the California government as a way to help fast food employees across the state, many of which hadn’t seen a wage increase in years.

California Governor Gavin Newsom explained, “Today, we take one step closer to fairer wages, safer and healthier working conditions, and better training by giving hardworking fast-food workers a stronger voice and seat at the table.”

Benefits

Though critics have alleged that the new legislation will cause more job loss, supporters have stated this law is mutually beneficial for employers and employees.

Newsom spokesperson said, “Higher wages and better workplaces benefit both workers and employers. In recent years, corporate profits in the fast-food industry have soared while wages have stayed the same,” a “This new law will ensure that over 500,000 California workers get access to the fairer wages and safer, healthier working conditions that they deserve.”

Unemployment In Other States

California definitely isn’t flying solo in the increase of unemployment claims. According to this latest Department of Labor report, Pennsylvania also saw an increase with a rise of 1,913 new claim