Job skills critical as California faces employment slowdown

I believe Californians would be wise to develop new job skills before the economy slows further and competition for jobs becomes more acute.

On Friday, July 22, the California Economic Development Department (EDD) released the state’s monthly employment figures. The news release trumpeted a 4.2% unemployment rate. California has now regained 93.6 percent (2,582,900) of the 2,758,900 nonfarm jobs lost during March and April of 2020 due to the COVID-19 pandemic. June 2022 also marked the ninth consecutive month-over-month gain for nonfarm jobs, with 561,300 such jobs gained over that period. A cursory read of the news release suggests that the job market in California is healthy and holding up.

It would seem a job market reckoning may be upon us. If we are smart (and I think we are), Californians should be ready.

Hidden behind the headline are some facts suggesting the state is headed toward a recession-like slowdown in the economy and job market.

First, job growth was not evenly distributed across the state  — roughly 74% of the June job growth was in the Bay Area and Los Angeles unemployment increased by 7,000 claims.

Second, the revised unemployment rate in the state’s most populous city, Los Angeles, was 5.3%, more than a full percentage point above the state average.  Los Angeles County is ranked 47th among California’s 58 counties in unemployment (upstate rival San Francisco came in at No. 2).

Third, year-over-year job growth statewide is weighted to low-wage industries like leisure and hospitality, which has gained 232,900 jobs in the past year (nearly 100,000 more jobs than the next closest industry Trade, Transportation, and Utilities).

It would seem a job market reckoning may be upon us. If we are smart (and I think we are), Californians should be ready. As an economist who has witnessed many ups and downs, I believe the surest way to recession-proof careers is to enhance skills. Here are three ways Californians can enhance their skills to safeguard their jobs now to head off pain down the road:

Build soft skills. According to Monster’s 2022 Future of Work Study, when employers were asked to name the top skills they want in employees, they cited soft skills leading with teamwork/collaboration, communication and problem-solving. At Pepperdine Graziadio we regularly see professionals with highly technical skills enter an MBA environment to learn how to interact more effectively and harmoniously with superiors, peers, and subordinates. This training — online, reading books, in the classroom — can help close gaps and make work roles indispensable.

Enhance technology skills. The Monster survey also found IT skills were the No. 1 hard skills needed by employers.

There are many no-cost and low-cost ways to improve skills. For example, Google offers no-cost training and tools to learn digital skills to grow a career and qualify for in-demand jobs. The Grow with Google platform recently added training in high-growth fields of digital marketing and e-commerce with a professional certificate. MBA programs including Pepperdine Graziadio Business School also offer highly refined accredited technology training in which professionals earn graduate-level technology and business degrees. It is a fact, that people who feel more confident in using technology become faster in finishing tasks, learning new tools, and teaching others.

Leverage transferable skills. Transferable skills are qualities that can shift from one job to another. These skills include those relevant to a specific industry such as accounting or medical fields. Transferable skills also include expertise in organizing and leading a team, being agile, and meeting deadlines. Many current and past members of the armed forces in particular possess these skills that only require translation for civilian employers to understand.

To be certain, a prolonged recession is not a foregone conclusion. The most recent 4.2% statewide unemployment rate is well below the rate of 7.9% a year ago. Los Angeles is adding jobs – nonfarm payrolls were up 9,500 over the month and up 237,300 year over year. What’s more, many of California’s largest industries include workers employed in professions that may be less affected by a recession (for example, healthcare and transportation which are woefully understaffed). Regardless, Californians who learn or refine skills will be better prepared to endure a downturn and enjoy an upturn.

Enhancing skills and other actions to safeguard against a recession like updating resumes, reducing expenses, and paying down debt, is prudent. In the meantime, it is wise not to let procrastination steal away time to prepare. In the words of Pepperdine business school’s benefactor George Graziadio “today, not tomorrow.”
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Editor’s Note: David M. Smith is a professor of economics at Pepperdine Graziadio Business School.