How California’s job market could change after COVID-19

The Sacramento Bee is exploring the future of work in California as the state recovers from the coronavirus pandemic. The series is supported by the Solutions Journalism Network, a nonprofit organization dedicated to rigorous and compelling reporting about responses to social problems.

A woman in South Lake Tahoe who had worked as a sales and marketing director at a hotel. A Modesto woman who worked selling motor homes and trailers. A woman in Sacramento who lost her three-decade job as a server at the Sacramento International Airport.

Those are just a few of the 1.4 million Californians who have lost their jobs since the coronavirus pandemic reached the state in February. Hundreds of thousands remain out of work.

When they come back to work, they could see a different job market.

Jobs such as restaurant staff may shift away from cities and into suburbs as more people work from home. Younger workers may find themselves competing for a job against people thousands of miles away because of companies’ embrace of virtual offices.

Others could be nudged into the gig economy or low-skilled jobs, where pay may be low and labor protections such as minimum wage for all hours worked aren’t guaranteed.

Some of those changes had been underway for years and they gained Gov. Gavin Newsom’s attention even before he took office. He appointed a future of work commission two years ago to study them. It’s expected to come out with a list of job development recommendations for the state in the coming weeks.

The pandemic accelerated the change he anticipated, leaving the administration with an urgent question: How and how fast will the state act to make sure its workers aren’t left behind?

“If we’re going to learn anything from the past, it’s not to repeat the mistakes of the past and have a sustainable mindset, not just a situational mindset,” Newsom said at a press conference in August talking about the state’s economic recovery. “In terms of how we recover, it is in the how we recover that I think ultimately we will be judged (by) and judge ourselves.”

With the right policies, experts say the recovery could become an opportunity to promote good-quality jobs in growing industries, from technology to green energy.

“You have potential to make those new investments. Where do you make them? Are there opportunities for job training and education?,” said Julien Lafortune, a research fellow at the Public Policy Institute of California. “It offers at least some potential to have sectors look a bit different and provide opportunities for jobs that provide upward mobility.”

It all depends on how the state shapes its labor and workforce development policies, they say.

“It’s public policy that determines what a job is,” said Sylvia Allegretto, a labor economist and co-chair of the Center on Wage and Employment Dynamics at the University of California, Berkeley.

Will some jobs be lost for good?

Lisa Cavanaugh in Sacramento lost her job as a server at the Sacramento International Airport a few weeks ago.

She’s waiting to see if her union can help get her job back. Meanwhile, she worries about other workers in her industry.

“It’s a constant mental torture,” she said in November. “It’s not just me. It’s happening to all my coworkers. People calling me crying, just beside themselves, not knowing what’s going to happen and what are our options, and it’s just been really a dark time.”

Her industry is among those that could look different after the pandemic.

“Restaurants have been experimenting with the way the order taking is done,” said Jerry Nickelsburg, who directs the UCLA Anderson Forecast. “Those technologies can be used to reduce the number of servers they have and change the way table service is done.”

Even before the pandemic, people have been working, shopping and living digitally — upending industries from retail to transportation. The pandemic is accelerating that trend, which means even though many jobs lost in the pandemic will come back, some won’t, Nickelsburg said.

Hotels, for instance, can have customers check in via an app rather than through a front desk.

As more people order groceries online or use self-checkout, cashier positions could be threatened, researchers at the UC Berkeley Labor Center said in their recent report on e-commerce.

“The pandemic may be a huge spur for automation,” said Nicholas Bloom, an economics professor at Stanford University.

The state’s job market could change in other ways.

Bloom said more jobs may move to the suburbs to accommodate people working and living remotely. Downtown coffee shops hiring baristas for the office crowd may be out, but suburban cafes employing staff for those out for lunch while working from home may be in, he said.

And younger people may have harder time finding jobs, because they are now competing with people all over the world who can work from their home, said Suzy Taherian, a lecturer at the UC Davis Graduate School of Management.

Still, hardest hit industries such as retail and hospitality may not shed as many jobs as some fear, said Taner Osman, research manager at Beacon Economics. It’s hard to automate processes like cooking food and cleaning the floor even more than it is now, he said.

“I’m a little bit more skeptical that the consequence of this recession on the labor market will be the same as consequence of other recessions,” he said. “The sectors affected don’t have a lot of room for automation.”

The loss of jobs such as cashiers and waiters can also mean the gain of jobs such as delivery drivers and warehouse workers.

“The U.S. economy for the last 100 years has been amazing at finding jobs for low-income workers,” Bloom said. “We’ve managed to shift out of agriculture and manufacturing. The question is whether it will happen again.”

Working conditions and pay

Stacy Lynn Vasquez of Modesto lost her job selling motor homes and trailers in Manteca.

Instead of working in a minimum wage job, she decided to buy a shuttle bus for a life on the road.

“Can I get a job today? Yes. Absolutely. I have the confidence in myself,” she said in October. “Do I want to work minimum wage? I don’t.”

But Vasquez recognizes not everyone can make that choice. As coronavirus hits some industries hard yet sparks growth in others, some labor experts worry people who have to take those jobs on the rise could get paid less and have fewer benefits than the jobs they had.

“I think people will be forced to look into the warehouse industry, because that’s where one place jobs will be,” said Beth Gutelius, the research director at the Center for Urban Economic Development at the University of Illinois at Chicago who authored the University of California, Berkeley Labor Center’s study on the logistics industry, which is adding jobs such as warehouse workers and truck drivers to ship goods across the country and the world.

Many will jump to work in the sector, Gutelius said, since workers could be trained for their job within weeks or even days. But the quality of those jobs may erode as companies implement technologies aimed at speeding up the pace of the work and reducing the skills required for those jobs, she said.

“Employers may use technology in ways that decrease the skill requirements of jobs in order to reduce training times and turnover costs,” Gutelius wrote in her study. “This could create adverse effects on workers, such as wage stagnation and job insecurity.”

The quality of jobs in the growing e-commerce sector is also a real concern, said Chris Benner, a UC Santa Cruz professor who co-authored the UC Berkeley Labor Center’s report on e-commerce.

Benner noted the growth of Instacart, whose workers are classified as independent contractors under California law, meaning they are not eligible for some basic labor protections such as minimum wage for all hours worked. Those workers are competing directly against grocery store workers, who are classified as employees and are often unionized, he said.

“Improving working conditions in e-commerce jobs will require proactive public policies and stronger systems of worker voice,” Benner and his colleagues wrote in their report.

More equitable California?

But the pandemic and the recovery, however, can also be an opportunity to bring more equity to California.

The state, for instance, can provide stipends for people to be trained for high-quality jobs in growing sectors. Even sectors such as e-commerce have big demand for high-quality jobs such as software developers, Lafortune said. Already, the city of Sacramento and nonprofits have partnered to provide technology training for those affected by the pandemic.

Agencies can also target specific underrepresented populations such as English learners or those formerly incarcerated and provide them with specialized training for them to work in good-quality jobs.

The state’s commission on the future of work will release its recommendations in the coming days, aiming to create enough quality jobs that by 2030, 80{c25493dcd731343503a084f08c3848bd69f9f2f05db01633325a3fd40d9cc7a1} of the state’s workers could have livable pay, benefits and working conditions.

Shifting the workforce isn’t something that can happen overnight. But it’s what’s needed to help the working-class Californians who have been hit the hardest during the pandemic, Lafortune said.

“It seems like we’re going into the direction where the gains are increasingly won by fewer and fewer people,” Lafortune said. “That doesn’t have to be the case.”

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Jeong Park joined The Sacramento Bee’s Capitol Bureau in 2020 as part of the paper’s community-funded Equity Lab. He covers economic inequality, focusing on how the state’s policies affect working people. Before joining the Bee, he worked as a reporter covering cities for the Orange County Register.

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