Economists suggest California’s reopening on Tuesday will bring an immediate job boost for the state.
The jump in jobs will be especially strong for the restaurant and bar industries, according to UCLA economist Jerry Nickelsberg. But, Nickelesberg also said employers and employees hoping to return to in-person work will face new challenges as the state reopens.
“We are going to have labor supply constraints, and that will ease up with the opening up of daycare and schools.”
In fact, because employers may need to staff up quickly, the power dynamic could shift toward workers. LinkedIn's chief economist Karin Kimbrough says the opportunities are ample for job-seekers right now.
“A lot of factors are creating what I would almost call a friction in the labor market, not a shortage of workers,” said Kimbrough.
“The workers are there and the jobs are there. It's just going to take a little time for everyone to match up at the right wage,”
Economist Sarah Bohn told Cal Matters that the biggest challenge for the state will be trying to keep small businesses alive and increasing hiring while facing the long-term challenges of addressing race and income gaps.
“We can’t just aim at getting back to the unemployment rate before this started,” said Bohn, vice president of research and a senior fellow at the Public Policy Institute of California. “History is kind of against us in an equitable recovery.”
Still, the reopening appears to be good news. State finances remain healthy as Governor Gavin Newsom and lawmakers have shown restraint and not dipped into the “rainy day fund,” according to Nickelsberg. Along with the projected job boost, he believes inflation is not a major concern right now.
“The underlying movement in prices is not such that we should be overly concerned at this point,” he said.
While local businesses are eager to reopen, they are still awaiting new rules from the state’s Occupational Safety and Health Standards Board. Regulators will vote on the latest proposed rules on Thursday, which include whether or not to allow fully vaccinated workers to go mask-free.