Addressing California’s Highest-in-the-Nation Unemployment Rate

January 13, 2022

California’s workforce is struggling to recover from the pandemic’s devastating impact. In November 2021—the most recent month for which state-level numbers are available—California had the highest unemployment rate in the nation at 6.9 percent, compared to a nationwide rate of 4.2 percent.

The state’s high unemployment rate can be attributed to a range of factors. We are dependent on tourism—a sector hit particularly hard during the pandemic. Low-wage workers are experiencing high rates of burnout. There is a mismatch between the jobs that are available and the skill sets of unemployed workers.

In our February 2021 report, First Steps toward Recovery: Job Training and Reskilling, the Little Hoover Commission highlighted the role that job training and reskilling can play in helping pandemic-impacted workers return to work and have access to quality jobs.

But, as the Commission learned, the path to finding a better job is not always clear. Workers looking to reskill often face a confusing and complex maze of choices and have few tools to help them identify what training is right for them.

Furthermore, workforce training programs are often not well aligned with regional needs. Frequently, there is also limited coordination between training providers and employers to move trainees into identified jobs.

This is not to say that California has not made considerable strides toward improving career education and strengthening workforce development. In the 2021-22 budget alone, the Governor and Legislature committed over a billion dollars toward job training and reskilling programs, including:

  • $600 million for a new grant program for communities and regional groups to develop and implement regional plans to create jobs in sustainable industries including, climate resilience and zero-emission vehicle infrastructure.
  • Nearly $500 million to provide grants to displaced workers looking to reskill and up-skill, through the Golden State Education and Training Grant Program.
  • $42 million to enable community college districts to support work-based learning opportunities, such as paid internships.
  • Funding for workforce development programs targeted towards at-risk populations, including $20 million to strengthen pathways for justice-involved individuals to the labor force.

The Commission commends these investments. However, our report also observed that helping workers move into quality jobs requires high levels of coordination between employers and training providers and ensuring that trainees learn the skills that local employers seek.

Job training can be a valuable tool for enabling upward mobility—but it is not very useful if participants do not learn the skills that employers are looking for and are unable to get a job when they finish their program.

To help put workers on the pathway to good jobs, the Commission called on the state to create a plan for providing high-quality training for displaced workers. As outlined in First Steps toward Recovery, the plan should:

  • Use state- and regionally-specific data to guide investments in training and direct workers toward in-demand jobs and skills.
  • Set regional and equity-minded targets for training and reskilling that take into consideration place-based conditions and the pandemic’s uneven economic impact.
  • Identify opportunities for training programs to increase coordination with each other and employers.
  • Develop a strategy to raise awareness of training opportunities among impacted communities and help workers identify the programs that best meet their needs. The state should also establish evaluation metrics to determine how successful these outreach programs are.

To keep the state on track, the Commission recommended that the Governor present a follow-up report to the Legislature, indicating what progress has been made toward meeting established goals.

Along with a call to develop a worker training plan, the Commission offered several additional recommendations to help the state address the jobs crisis and provide workers with pathways to employment and to good jobs:

  • Increase funding for the community college Strong Workforce Program and direct this additional funding towards creating and supporting training intermediaries, organizations that can help address barriers to training and provide coordination between colleges and employers.
  • Incentivize innovative regional training programs through “race-to-the-top” grant competitions.
  • Partner with companies to gather analytics on in-demand skills, competencies, and occupations, and provide this data to training providers, workforce groups, and their partners.
  • Establish a working group of senior agency representatives to facilitate interagency collaboration in providing reskilling opportunities to workers impacted by COVID.

The Commission’s recommendations for supporting reskilling and training opportunities for pandemic-impacted workers will help the state move Californians into new and higher quality jobs.

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