County Jobless Rate Hits Record Low Mark: 2.9%

Santa Barbara County is experiencing its lowest unemployment rate in history, according to the region’s Workforce Development Board executive director. 

In a June 21 press release regarding the May statistics, board chief Ray McDonald said, “This 2.9 percent unemployment rate is the lowest Santa Barbara County has ever experienced.” It has been widely believed that when someone loses their job in Santa Barbara, they leave town and are not counted among the county’s jobless. 

“(I)t’s important to remember that the state defines unemployment via a calculation of people who are jobless and have actively looked for work in the past four weeks, consistent with the U.S. Bureau of Labor Statistics (BLS) methodology,” McDonald said. “If an individual stops looking for work, the BLS methodology does not count them in the unemployment rate.” 

He said workers may leave the area, go back to school, or some may graduate colleges and joining the work force. This may lower the unemployment rate. 

On the other hand, McDonald said, job seekers re-entering the work force after having a child or caring for aging parents/ill relative. This will increase the unemployment rate along with advances in technology such as robotics or computers that replace employees. Job outsourcing to other states or countries also will increase the jobless rate, he said. 

Low unemployment may affect the economy in several ways, McDonald said. Because businesses have an adequate supply of workers, that may put pressure on employees to perform at peak levels to avoid losing their jobs since there are few “outside” opportunities. 

“Low unemployment may mean that there are few suitable unemployed job seekers,” McDonald said. “As a result, employers may increase investment in their existing workforce, providing training in new skills/technology to accomplish more with fewer employees.” He said this is the ideal workforce situation, and is a win-win for employers and employees alike. “Incumbent worker strategies are something the Workforce Development Board can help businesses accomplish,” McDonald said. 

Lower joblessness may boost consumer spending. “Most economists believe spending increases when people are working and therefore it also benefits the overall local economy, via increased sales and tax revenue,” the work force board chief said. 

Leisure and hospitality, farm, and education and health services had the largest growth since 2010 in Santa Barbara County, and therefore could have contributed to the low unemployment/high employment rates,” McDonald said. 

With the exception of education and health services, the jobs in the other sectors are mainly “low-pay, low-skill” jobs, he said. 

Since the beginning of 2010, the county experienced a steady decline in joblessness. A trend occurred each year with January and February months unemployment peaking; May dips lower, back up slightly in July, back down during the September and October months and the cycle continued. 

Posted June 24, 2019.

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